Edmonton Mortgage Brokers-The Ultimate Guide
Getting the lowest mortgage rate in Edmonton can be a mystery for some people. There are over 55 banks and financial institutions that offer mortgages in Canada and it can be very confusing to navigate. Each bank has its own rules and regulations, so you may be declined with one only to be approved by another!
This is where we have really been able to help a lot of people. As mortgage brokers, we work with most of the banks and lenders and are able to help to fit your unique situation.
If you were shopping for a mortgage yourself (without a good mortgage broker), every lender would be pulling your credit bureau. This would lower your credit score and could prevent you from getting the best rates on the market. We pull your credit bureau once and shop your scenario around to all of the lenders using that one credit bureau! This ensures you will get the best rate.
Because of the volume of business we do with the banks, they give us a discount on the mortgage rates. Thereby getting you the lowest possible rate in Canada! And the best part about the entire process is that we do not charge a fee in most cases, so your cost is the same as it would be going into a bank.
We know that going into the bank, you are usually dealing with individuals that are not as experienced doing mortgages. This could hurt you in the long run, as they may not understand the banks programs to the full extent and may not be able to fit you into the banks square box.
We have combined experience of over 35 years doing mortgages with many lenders at high volumes, so we know the products that will help to get you approved fast and for more money!
I truly believe that it in everyones best interest to get the highest level of service and deal with the most professional people if they wish to succeed. That is what you will be getting working with our team. The most competent service, fast response times, higher approval rates and lower interest. Not all mortgage brokers are the same, there are many inexperienced brokers out there. We will work harder than the next broker to get you approved and fight for the lowest mortgage rate every time we deal with you. This is why our clients are loyal to us and recommend us to their family and friends. Keep reading below the ultimate guide to mortgage brokers in Edmonton.
What is an Edmonton Mortgage Broker?
A mortgage broker is a middle man who brings mortgage borrowers and mortgage lenders together, but who does not use their own funds to originate mortgages. A mortgage broker helps borrowers connect with lenders and seeks out the best fit in terms of the borrower’s financial situation and interest-rate needs. The mortgage broker also gathers paperwork from the borrower and passes that paperwork along to a mortgage lender for underwriting and approval purposes. The broker earns a commission from either the borrower, the lender, or both at closing. A mortgage broker should not be confused with a mortgage banker, which closes and funds a mortgage with its own funds.
What does an Edmonton Mortgage Broker do?
Edmonton mortgage brokers work as middle men between yourself and the banks. They will shop the entire mortgage market for the best rates and terms for their client. A good mortgage broker will fit you into a product that suits your individual needs with no consideration to the compensation they receive.
The best mortgage brokers in Edmonton will also offer suggestions on the state of the market and educate their client to make the best decision.
Often a client may not be able to get approved with one bank and a mortgage broker will guide them to a bank that they will fit into. Or alternatively a mortgage broker may coach a client on how to get approved for a mortgage over a specified time frame. Not all Edmonton mortgage brokers do this, if you would like that high level of customer service, please call us anytime.
We are not short thinkers, we have grown our business by coaching and guiding our clients. If you are not ready today, we will help you where we can.
How do mortgage brokers get paid?
Mortgage brokers are usually paid directly from the banks. However in some cases (private mortgages and high risk mortgage situations) a mortgage broker would have to charge a fee for service. The reason for this is that the private lender do not pay the mortgage broker directly. Many of the private lenders will try to hide a mortgage brokers fee in their fee or interest rate.
We choose to disclose all of this upfront to our clients. This builds a higher level of trust and understanding.
In most cases we do not charge any fee to our clients, and we do all of the work! We shop the market for you and guide you through the complicated mortgage world explaining every detail.
Who Is the best mortgage broker in Edmonton?
We believe strongly that Sean Rampersaud mortgage team are the absolute best mortgage brokers in Edmonton for many reasons.
- We have the highest level of customer service
- Multiple eyes on every application gives us more approvals
- Better relationships with lenders. They will sometimes make exceptions for us
- A workflow that keeps all parties of a transaction informed
- Faster turnaround times
- More experience than your average broker
- Access to private lenders
- Access to B lenders
- Divorce and separation specialists
- New to Canada Specialists
- Business for self specialist
- Highest approval rates in the industry
- Best rates in the industry due to higher volumes with the banks!
- Mortgage Renewals and Switches to different lenders for better rates
- Foreclosure saving
And the list can go on. The fact is that the best realtors in Edmonton choose to partner with us, because they know their client will have the absolute best chance of getting approved.
This does many things for the realtor. For one their clients are happy as heck that they are approved, and they will receive more referrals from their clients because of this.
We claim to be the best mortgage brokers in Edmonton, because we understand the frustration and pain that financing things can cause. Our goal is to make the process seamless and positive for the applicant. The more people we get into their dream homes, the more referrals we receive. And that is how a strong business grows, from the foundation up.
What is the difference between a realtor and a mortgage broker?
A realtor will take you around showing you homes, or they may assist you in the sale of your home. It is a huge job, and it is literally impossible to do both jobs.
A mortgage broker will assist you in getting approved for the financing on a property. In other words they set you up with a bank to finance the balance between what you have for a downpayment and the purchase price. A mortgage broker with the best service like our team will also explain the ins and outs of the process to you and make sure you do not get into a mortgage product that sucks! For example, many people do not realize that some banks put a charge on your title, higher than the purchase price of the property. This is called a collateral charge and many banks do so. The employees at the bank might not even understand what this is. We make sure our clients understand this in detail, and most of our client opt not to get this.
A good mortgage broker will also explain how interest is compounded as this can affect how much interest you are actually paying. Don’t always just look at the interest rate at face value! We help you navigate what the actual effective interest rate is.
Every bank uses different marketing tactics, we take the guess work out of the equation and simplify the process for our clients.
How do I get the lowest mortgage rates?
As I mentioned above, the interest rates you will find online when you google things like “best mortgage interest rate in Canada” etc, can be very deceiving. Some financial institutions offer these crazy low rates, but with a lot of conditions.
For example: A company may offer a 5 yr fixed rate that is discounted by 1%. Often times these interest rates are stripped down and the product you are getting is dangerous for a person. They come with large penalties, fees and other issues. We call this bait and switch. So they will advertise this so that you call them, then tell you the negatives about the product and try to switch you to another mortgage product.
This is absolutely not then best way to get the lowest interest rate in Canada.
To successfully get the lowest mortgage interest rate, you are best to call a high volume broker like myself. Not all mortgage brokers get the same discounts at the banks, it is dependant on the volume of mortgage business that is sent annually to a bank.
We are high volume and get the lowest rates at the banks! Most of the time I can get you a lower rate at your own bank than you can get. And the best part is we do not charge you a fee for this service! So to get the lowest mortgage rate, call me today and get pre approved.
I will provide you the 3 lowest quotes I can get you from the bank. Saves you driving around and shopping everywhere
What happens when multiple banks pull my credit?
I always pre warn my clients that going to multiple banks to get a quote, does not actually help them…..it harms them.
What does that mean? Well it is simple. When you go to every bank shopping for the lowest rate, they will all pull your credit bureau. Every time your credit bureau is pulled, it will go down in overall credit score. The banks with the lowest interest rates want to deal with the customers with the best interest rate. So by allowing your credit to be pulled all over the place, you really could be preventing yourself from getting the best rates!
Should I take the mortgage with the best interest rate?
Sometimes the rates between lenders are very close and the lowest rate is coming from a bank that has poor service or support for their clients. I have clients that have told me that they did this and regretted it.
I have been in the mortgage business a long time and when a bank has bad service, this will prevent you from trying to call them to increase your payments or putting a lump sum down on your mortgage. In other words, this will most likely stop you from paying your mortgage off faster.
Please contact our team any time and ask if a certain lender has good service or not. Many mortgage brokers and bankers will not discuss this, they will just give the client what they ask for (usually the lowest rate). We make sure our client understand which lenders have good service and which have bad service and let you make the decision.
How to choose the best mortgage broker in Edmonton?
To choose the best mortgage broker in Edmonton, it is important to do your research. For one, you can google best mortgage broker in Edmonton, or Edmonton mortgage broker. From there, usually a few names will show up, many of those people may be good mortgage brokers. However you should dive deeper, I would go to their website and see if they know what they are talking about. Look for articles and an online application, check their about us and see what they are all about.
You can continue to go deeper by snooping their social media. Do they have a business page? Have they won any awards? This is usually an indication that they know what they are doing.
Ask your realtor! Most realtors know some good mortgage brokers. However some will just refer you to one of their friends….I would do some of your own research before choosing who to go with. As I stated above, if the mortgage broker does not do higher volumes, you may not get the best rate, so it is essential that you find a broker that gets the best rates.
Most realtors in Edmonton know that if you are dealing with our team, you have the best chance of getting approved for you mortgage.
Tenure! This means how long they have been in business. The longer the tenure, usually means the deeper the understanding. However if they are not receiving awards they still could be very low volume and you don’t want a broker like that. Remember, it is all about you and what kind of service you will receive.
Another solid way to choose the best mortgage broker in Edmonton is to call 3 of them and see which person you have the best rapport with. A person may be nice on the phone, but you need a shark to go to bat for you and hunt for the best rates! P.S. Im a shark lol.
Should I choose a bank mortgage broker?
If you are choosing to work with a mortgage broker at a specific bank, you are limiting yourself big time. I would say this is one of the most common mistakes people make when shopping for a mortgage.
The reason bank mortgage brokers are not the best for you is simple, they are limited to that banks products.
Here are a few reasons why the bank mortgage broker is not the best
- Limited to that banks products
- You may be declined at that bank and give up. I may be able to get approved at a different bank
- You are stuck with the rates that bank offers
- They may not have certain products that could help you. For example some banks have lines of credit and mortgage all in one. As you pay down the mortgage more line of credit opens up for you. There are many other cool products out there and we have them all!
- Most bank broker leave the bank and become independent mortgage brokers once they get good at it. This will leave you with in branch points of contact that will always change. You work with us, you have us until retirement!
There are many other negatives about using a bank mortgage broker. Please call me anytime to discuss this.
Should I get pre approved with my bank before I shop for real estate?
Absolutely you should get pre approved before you shop for real estate. However you would be doing yourself a service by getting pre approved by a good mortgage broker rather than your bank. The mortgage broker can do many things for the client compared to what a bank can do.
For example the best mortgage brokers in Edmonton may be able to get you pre approved for a larger amount than the bank can. This can help you get into your dream home rather than a temporary stop!
A mortgage broker will also be able to get you pre approved easier than a bank can. The reason for this is every bank has their own rules and it is very black and white. A mortgage broker will have access to many of the banks and if they understand the products well of every bank then they will be able to get you that coveted pre approval much easier.
The best mortgage brokers will have access to more lenders. Many lenders have high minimum volume commitments a broker must meet in order for them to work together. Our team has access to more lenders than most of the brokers out there! This makes it much easier to get pre approved through our team.
What is a pre approval?
A pre approval is when a mortgage broker has you fill out an application form and gives you a price range that you can shop within.
THIS IS NOT A SOLID APPROVAL!! Sorry for the caps, but many people take pre approvals for solid approvals. It is one of my pet peeves.
Banks and many other brokers out there will give pre approvals without a full understanding of a client scenario. So a person may go shopping, confidently thinking they are pre approved, only to find out they are declined.
I hate seeing this as it causes major negativity. We choose to do things differently. When we pre approve a client, we look at their documentation and fully underwrite a deal. Them and their realtors can feel confident that they are going to be able to complete the transaction.
Pre approvals from a bank is never solid, they do not underwrite a deal. They just punch minimal info into their system and tell you that you are pre approved.
If you have questions about pre approvals, please call me. I will be able to tell you if your pre approval is real or not.
What is the minimum downpayment for a mortgage?
The minimum downpayment for a mortgage in Canada is 5% down. There are some special program out there that will allow borrowed downpayment.
The way this works is a person will get a line of credit and use that for the 5% downpayment.
This is called flex down, not every bank will allow this.
Can you get a mortgage with 0% or zero down?
There is no such thing as zero down mortgages in Canada. They had this many years ago, however it is no longer available. Many people call us about this, and we have to tell them the facts. The closest thing you can get to a zero down mortgage is the flex down, where you use a line of credit for the downpayment.
Many realtors advertise these zero down mortgages in order to try to get people to call them. This is a bait and switch technique. We tell you the facts, if there was a 0 down mortgage, we would be offering it.
Things do change and if this becomes available in Canada, we will update this article.
Do you have cash back mortgages?
Yes we do offer cash back mortgages. The cash back can be up to 5% depending on how much you are putting down. In a cash back mortgage, the interest rate is slightly elevated with the more cash back you want. For example a 1% cash back has a little higher interest rate than a regular 5yr fixed term, whereas a 5% cash back will have a much higher interest rate.
Minimum credit score for mortgage approval?
The minimum credit score for a mortgage approval is no credit score.
Depending on how much you are putting down, and your individual scenario you may not need to have a credit score to get approved.
There are special programs for every situation, and we have them all. As an example we can look at someone new to Canada. They do not have a credit score yet, but they have a cell phone bill and rent coming out of their accounts. In this case I would use the new to Canada program to get them approved.
Another scenario is a person with a 500 credit score. They are newly self employed and have a large 20% downpayment to put down. In this case I would use the stated income program for self employed!
There really is no limit. Please call me to run your personal scenario by me to see if you fit into any of these programs.
What is the first time home buyer incentive?
The first time home buyer incentive is a special program offered by the government of Canada. In this program the government will give you up to 5% of your downpayment on used property, or up to 10% on brand new property.
You still require a downpayment to be eligible for this. Minimum downpayment in the program is 5%.
To qualify your household income cannot exceed $150, 000
The total loan amount cannot exceed 4 times your annual income.
And you cannot have owned property in the past.
Please note this is a repayable loan. If you accept the 5% down or 10%, you will have to repay either 10% or 5% of the property value when you sell or after 25 years.
In other words you could end up paying more back or less depending on the value of the property at that time,
The program will share in your loss or share in your gain.
You can get more details on the first time home buyer incentive here https://www.placetocallhome.ca/fthbi/first-time-homebuyer-incentive
What programs are available for first time home buyers?
There are 2 main programs available to first time home buyers and a few sub programs.
First is the first time home buyer incentive, that gives you 5% down on used property and up to 10% down on new property.
Second is the RRSP home buyers plan. You are allowed to take out up to $35, 000 out of your rrsp towards the downpayment for yourself or someone with a disability. In this program, you have 15 years to pay back your RRSP.
And third there are native bands that assist their members in the home buying process. One such process is the Metis home buyer plan. They will give you your entire downpayment if you qualify!
Do you offer the Metis first time home buyer program?
Yes we offer and specialize in the Metis home buyer program. There are very few brokers out there that actually know about this and how to navigate the program. We are in touch regularly with the plans council and understand the plan in great detail.
What is mortgage life insurance?
Mortgage life insurance is a type of life insurance that covers the balance on your mortgage if you die. Most clients choose to get the mortgage life insurance to cover their families because of the cost. It is one of the cheapest forms of life insurance you can buy!
We offer mortgage life insurance through our lenders (the banks) as well as offer you coverage through Canada life.
If both partners on a mortgage get mortgage life insurance, then if either of them die, the property will be paid off by the insurance company. It is a pretty slick tool for protecting your family.
Over and above mortgage life insurance, we also offer disability insurance and critical illness insurance.
Disability insurance is insurance if you become disabled either temporarily or permanently. If this is the case the insurance company will make your payments for you! This protects you from potentially loosing your property due to lack of income because of a disability!
Critical illness insurance covers you if you become critically ill. For example if you were to happen to get cancer and are terminal the house would be paid off for you. No more stress from the mortgage end.
Overall mortgage insurance is a very important part of the mortgage process and we walk you through every step of the way, ensuring you get the coverage you need and no more than that!
How do I get the best mortgage rate in Edmonton?
To get the best mortgage rates, you will have to make the important decision of hiring the best mortgage brokers that suit your needs.
Make sure they are a high volume experienced broker like ourselves. The reason for this is because the lenders will give special treatment and rates to brokers that are doing higher volumes. You will benefit from your broker being successful!
As I stated before, you should avoid having your credit pulled multiple time as this will prevent you from getting the lowest rates. Every time you pull your credit, your score will drop.
To get the absolute lowest rate, ask about stripped down mortgages or low rate basic mortgages and find out if they would be right for you. They are discounted mortgages that are advertised by many companies, and are often used to bait and switch. However this product may suit your needs. Get all of the details before you choose this type of mortgage.
The absolute easiest way to get the best mortgage rate in Edmonton would be to contact us directly. We are high volume, we get the discounted rates and we are highly experienced!
What is the difference between a pre approval and an approval?
A pre approval is a type of approval banks and some brokers give a person without seeing documentation up front. This type of approval is often declined after the broker or bank see’s the clients documentation. It is false and misleading. Pre approvals are my pet peeve.
I do not give a person a pre approval until I get the correct details up front. The reason for this is that I absolutely hate our clients being disappointed. When we give a pre approval, you cans hop with confidence that you will be approved.
An approval is once you have chosen a property, the bank will send a commitment letter to sign. This type of approval is conditional on the bank receiving the documentation/evidence that you put in the initial application. There is an address attached to an approval.
What documents do mortgage brokers ask for?
This is a complicated question, it really depends on a persons situation. Below I will list the common documents required for certain types of mortgages.
In every situation the following documents will be required.
- Void check or pre authorized payment form
- Photo ID
- 3 months bank statements for every account the downpayment will be coming from (all bank statements must have name and account number on it). This could include investment statements or RRSP statements
- Offer to Purchase
- MLS listing Sheet
If the downpayment is a gift you will require a gift letter and a corresponding bank statement to prove the gift has been deposited.
Common employee: Most people are employees at a company and earn a full time salary.
If this is the case the following documents will be required
- Employment letter
- Recent Pay stub
- Employment letter
- 2. Recent pay stub
- If hours are variable (not guaranteed 40 hrs per week) then you would need the following
- Last 2 years T4
- Employment letter
- Recent Pay stub
- Last 2 years notice of assessment
- Last 2 years T4
Self employed Incorporated
- Incorporation documents
- Last 2 year t1 Generals
- Last 2 years notice of assessments
- Last 2 year business financials
- If you cannot prove income, then you will need to show 6 months of business bank statements
Self Employed not incorporated
- Business license
- Last 2 years of t1 generals including statement of business activities
- Last 2 years notice of assessments
Union Employee/ Trades
- Union employment letter
- Employment letter from whatever company you are currently working at
- Recent pay stub
- Last 2 years t4’s
- Last 2 years notice of assessment
New to Canada
- Proof of 2 sources of alternative credit
- International credit bureau
- Letter from landlord
These are just some of the potential scenarios, there are of course many more. I can let you know within a few minutes exactly what documents we will need to get you approved.
Do mortgage brokers pull my credit?
Yes a mortgage broker will pull your credit as long as you have given consent to do so. They pull your credit once and then use that to shop you at all of the banks!
Will my credit score drop when the mortgage broker pulls credit?
Yes your credit score will drop a few points every time you pull your credit. This will repair very fast. so in most cases it is nothing to worry about. Just don’t have multiple brokers pull your credit.
I have seen disasters in the car industry where a car financier will have your credit pulled 10-20 times. I add this as a warning to anyone that is shooting for a car. This happens in that industry and can hurt a potential mortgage application.
Can a mortgage broker renew my mortgage?
Yes a mortgage broker can help you renew your mortgage, often at a much better rate than you are being offered. When your mortgage is up for renewal, the bank will send you a renewal notice in the mail. Most people just sign off on this and renew their mortgage. This is a mistake.. I realize this is the easiest thing to do with no resistance. The banks do not come with their best foot forward, they alway give inflated interest rates. Lets face it banks are into mortgages for one reason…to make money!
If your mortgage is up for renewal you should contact an aggressive mortgage broker that will fight for you to get the lowest rate from the bank you are with, or switch you to a bank that is offering a better rate. This is how the most intelligent savvy investors are saving loads of money!
If you want us to represent you on a mortgage renewal, please call anytime. We are sharks and don’t care about the banks. We care about our customers. This is why our clients refer us to their family and friends!
Do mortgage brokers charge a fee?
Some mortgage broker do charge fees. We do not charge fees in most cases. The only times we charge a fee is when we have to go to the private market for funds. The only reason we have to do this is for client with really bad credit or when they do not have a job.
So to answer the question fully, no we do not charge fees. You get to benefit from our ultra low rates and high levels of service at no cost to you.
How long can a mortgage broker lock in a rate?
Most mortgage brokers can lock in rates for up to 120 days. Because of our relationships and volumes, we are able to lock rates in for as long as 12 months.
This comes in handy when a client is building a home (self build) or building through a builder.
Builder love working with us because we have access to this type of product.
Does my spouse have to be on a mortgage application if they have bad credit?
No you do not need your spouse on an application if they have bad credit. If I were in that situation, I may put all of our debt in the spouses name so that my debt is minimal. This way you would qualify for the highest amount. In some cases the spouses credit may just be bruised in which case there are some lenders that may consider using their income. I have a bunch of tricks up my sleeve on how we can use your spouse with bad credit on a mortgage.
I like to pull both of the credit bureaus on clients like this and use whichever credit bureau is the best!
What is a co signor?
A co- signor is someone that comes on a mortgage with you to strengthen your application. There are many reasons for getting a cosigner including bad credit, no credit, income is too low to qualify and more.
A cosigner is essentially a second applicant on a mortgage, they are just as responsible for making the payments as the initial applicant. Many people out their do not realize that when they cosign, they are a mortgagee.
How long does a cosigner need to be on the mortgage?
A co-signor needs to be on a mortgage for as long as it takes for the main applicant to get their credit or income where it needs to be to qualify on their own. At this point you would contact us and we would work with the lender to remove the co-signor from the mortgage.
Lawyers still need to be involved in this process due to removing a person from ownership of the property. I have seen consignors being removed from a mortgage in as little as 6 months!
Who can co-sign for my mortgage?
Anyone can cosign a mortgage for you as long as they meet the requirement of the bank. When you add a cosigner to an application you are adding another owner of the property to the title.
Can I receive a gift as a downpayment?
Yes you can receive a gift as a downpayment. Many people do this when they are purchasing their first home and in many other circumstances. When you receive a gift as downpayment, the banks look for a gift letter on the banks paperwork, as well as a bank statement showing the corresponding deposit into your bank account.
Who can gift me a downpayment?
The banks require the gift to come from an arms reach family member. This means you can receive a gift for a mortgage from you mother, father, grandmother, grandfather or siblings. (brother or sister).
The reason they want it coming from this type of family member is so that no one can come back to you and say you owe them. The gift letters always state on them that it is a non repayable gift.
Is it easier to get a mortgage through a mortgage broker or a bank?
It is way easier to get a mortgage through a broker! The reason for this is a broker has access to way more products than a bank, and access to more lenders. Every bank has its own rules and regulations and some are easier to navigate than others. The big banks are often the hardest bank to get approved through. They are looking for AAA clientel. We shop you at every bank and get you the best rates on the market!
What is a spousal buyout?
A spousal buyout happens when a couple is separating or having a divorce. It is one party buying the other party out of a property and using the equity in that property to help settle a separation or divorce agreement. We specialize in spousal buyouts. In a spousal buyout, you are allowed to finance up to 95% of the value of a property. This helps both parties achieve their goals, without having to sell the matrimonial property.
Can I get a mortgage in Edmonton if I am on a work visa?
Yes you can get a mortgage if you are on a work visa! You are allowed to get financed up to 95% of a property value, meaning you have to put 5% down. The downpayment in this case cannot be gifted. It must be sitting in your bank account for a minimum of 3 months.
Can I get a mortgage if I am a Permanent resident?
Yes you can get a mortgage if you are a permanent resident. You are allowed to finance a property up to 95% of the value, so 5% down. The downpayment cannot be gifted and must be in your bank account for a minimum of 3 months.
Mortgages for doctors and dentists.
We have special programs available for doctors and dentist! These special programs include preferred rates, and some special terms. We have programs for doctors and dentist that are still in residency! I can project their income! In other words they may not be making a whole lot in the beginning, so I will project their income to a high amount and the bank will accept this. This allows a doctor or dentist in residency to purchase a home for a greater amount than they qualify for!
We have special programs for many other types of professions, please call us to find out if your profession qualifies for a special program like this.
Why do mortgage rates go up?
Mortgage rates go up as the bond yield increases, or when the government of Canada makes a change to the prime rate. These changes are made for the betterment (usually) of the overall economy in Canada.
The variable rate is directly associated with the prime rate. So usually when you get a mortgage on a variable rate your rate will be prime minus a number or plus a number. Currently the prime rate is 2.45% (as of when this was written) and you can get minus 1.1%. So this would mean that the overall rate is 1.35% right now.
What is the best time of year to get a mortgage?
There is no best time of year to get a mortgage. There are always banks running promotions to take market share. It all depends on how aggressively a bank needs to hit their quota’s.
What type of mortgage should I get if I am flipping a house?
In my opinion, if you are flipping a house with 5-19% down the best mortgage to get would be a variable rate. The reason for this is the variable rate mortgages are very flexible and the other reason is they have a very low payout penalty. The payout penalty for a variable rate mortgage is 3 mths of interest. This is arguable as there are mortgages available called open mortgages that have no payout penalties. However those mortgages have very high interest rates.
The variable mortgage is portable to another property with no penalty! I find that once a person starts flipping houses, they usually want to buy another property as the first is being sold. The variable mortgage will allow you to do so very easily.
If you are flipping a house and you have over 20% down, you would want to choose a conventional insurable mortgage for a short term, or a variable rate.
First you need to estimate your timeframe to completion and how long it will take to sell. Your realtor should be able to help you with this. Then you should call me to discuss this. I have flipped over 70 homes in my career and can help you navigate the financing easily. We will choose a mortgage that will suit your needs.
What is a spousal buyout mortgage?
A spousal buyout is when there are 2 partners associated with a property and they decide to divide the asset after a breakup. Normally in a spousal buyout, there would be a divorce agreement or separation agreement in place outlining the division of the assets and all payouts. Then the equity in the property would be used to split it all up.
Only in a spousal buyout a person is allowed to finance their property up to 95% of the value of the property. Essentially it is one partner buying the other partners shares in the property.
Spousal buyouts are a complicated process and we specialize in this area. Most brokers and bankers out there will have a hard time assisting you with this, so please reach out. We have gone as far as writing outlines of separation agreements for the lawyers in order to save our clients money. I also have lawyers that give our clients discount on the separation and divorce agreements.
A person should use a good mortgage broker anytime they are getting a mortgage or when they want to finance any large purchases. The reason I say this is because a mortgage is the lowest interest rate loan you can find and you can sometimes get a better rate by incorporating that car purchase or RV purchase into your mortgage. This way you would have only 1 payment at a very low rate!
The other reason I say that you should always use a mortgage broker when you are purchasing a home is because of the options that are available through a mortgage broker. A good broker will have access to many banks and products and will be able to give you more options along with better interest rates.
Not all brokers are the same! Keep this in mind when you are choosing your mortgage broker. Some brokers get better rates (like me) and products than other brokers can due to their volume of overall mortgage business in a given year.
One example of why you should use a mortgage broker with every house purchase would be this. A person is new to Canada with no established credit, their bank does not have a new to Canada program. Their bank would decline them whereas I would approve them.
Another example is a person is self employed, they do not claim much personally. Their bank does not have a program for self employed and declines them. I have a special program for this and may approve them.
There are hundred of different scenarios on why you should use a mortgage broker every time you finance a property. Mortgage brokers have only been around in Canada for the last 25 years or so, whereas in the U.S brokers have been around for a long time. Every year more and more people choose brokers over the bank. It gets a person to work for you, instead of the best interest of the bank.
We have an online application that literally takes 5 minutes to fill out. Once this is done, we send you a list of documents we require (like an employment letter). Once we receive this, you may be pre approved!. Our online application is easy to fill out and very straight forward.
Mortgage Calculator Canada.
Our site has a mortgage calculator built into it so that you can do your own calculations anytime. If you are out shopping and want a quick idea of a payment, you can use the mortgage calculator, or call us and we can get you the payment amount based on the numbers you are working with.
What is Mortgage insurance?
Mortgage insurance is a mandatory insurance product if you are purchasing a property with less than 20% down. Mortgage insurance would come from one of three companies in Canada, CMHC, Sagen or Canada Guarantee. These insurance companies essentially insure the bank that you will be making your payments. If you default on payments, the insurer takes over and pays the bank out. Mortgage insurance protects the bank, not you.
To avoid mortgage insurance the only thing you can do is to put 20% down or more on a property. The banks offer special rates for insured mortgage, because this is the safest type of mortgage for the bank.
When you get a mortgage that is insured, the insurer makes the rules! If you are getting a mortgage with less than 20% down, the insurers guidelines is what you have to fit within. Usually if an insurer will insure it, the bank will approve it!
What is a B lender?
A B lender is an alternative bank for people under certain circumstances. Sometimes a person will have a low credit score, but have a large downpayment. This is the type of person the B lenders look for. Their security for the mortgage is not based on credit score, it is based more on equity. They know that if you do not make your payments, there is enough equity in it, that you would not want to lose. B lenders are also great for self employed people that do not claim a lot, in these cases the B lenders have programs such as the stated income program for self employed. In this program you can just tell them what you personal income is, as long as it is reasonable for your industry they will accept it.
There are approximately 10 B lenders in Canada and the rates vary between each lender. Currently the rates are around 1% higher than the regular banks. The B lenders will also charge a small fee, around 1% to secure the mortgage for you.
I highly recommend only using a broker that knows about B lending (like us) when you are getting financed through a B lender. The reason for this is that you want to make sure you are getting the best rates and because B lenders ask to see only very specific documentation. If you send them too much or too little they will decline you.
What mortgage brokers do high risk lending?
Our team has one dedicated underwriter specifically for high risk lending and private lending. The reason for this is because that type of mortgage can be very complicated, and if it not done right a person can get taken advantage of. We ensure that our clients are dealing with the best, most respected private lenders.
There are some private lenders that have outrageously high fees along with high rates and even worse terms and conditions. Many people loose their homes after dealing with a bad private lender. Please call us anytime to navigate this area.
Private lenders will finance a property with 20% down or more. They prefer major municipalities and will require larger downpayment based on the area. Usually the rate with private lender will range from 3% more than a bank all the way to 9% more than a bank. Be very careful when you are looking for a private lender.
What is equity lending?
Equity lending is mortgage lending based solely on the equity you have in a home. You could have poor credit and still get financing under equity lending. Equity lenders can be B lenders or private lenders. Some A lenders (banks) will also allow extended ratios when a client has a lot of equity,
What banks do mortgage brokers work with?
Mortgage brokers deal with almost every bank on the market and only have to pull your credit once! That is one of the huge benefits of working with an Edmonton mortgage broker.
Some of the lenders we work with are ATB (Alberta treasury branch), Scotia Bank, Toronto Dominion bank (TD), Canadian Western Bank (CWB), Servus credit union, First National, CMLS Financial, Merix, RMG, MCAP, Equitable Bank, RFA, Marathon Mortgage, B2B Bank, Bridgewatter Bank, Haventree Bank, ICICI, Manulife and many more!
We have the largest source of funds in comparison to any singular lender in the country.
Is there such thing as no downpayment mortgages?
No This no longer exists in Canada. There are mortgage options where you can used borrowed funds for the downpayment called flex down. We also have programs where cash back is offered. So essentially you can put as little as 2% down on a propert