We can assist you with all of your new mortgage or refinance mortgage needs.
Arranging a Mortgage Yourself vs. using a Mortgage Broker
If you need a mortgage to finance your purchase, you can arrange your mortgage yourself or you can contact a Mortgage Broker. Many people think that if they deal with a Mortgage Broker, they will have to pay the Mortgage Broker a fee. In most cases a Mortgage Broker will arrange a Mortgage for you and not charge you a fee. If your mortgage is difficult to place (you have had some credit problems, you are building a house or there is something unusual about your purchase) and your Mortgage Broker is not able to place your mortgage with a ‘conventional’ Lender, you may have to pay a fee. Your Mortgage Broker will discuss this with you in detail.
If you receive a Mortgage approval from one Bank and then go to other banks in the hopes of securing better terms for yourself, you may run into a problem. Each of the banks will do a Credit Search on you. A Credit search shows all prior recent Credit Inquiries. Subsequent lenders may think that you have been turned down by the previous lender for some reason that you are not disclosing to the subsequent lenders and turn you down. A Mortgage Broker does a single Credit Search and uses that search to approach different Lenders in order to secure the best mortgage terms for you.
How much financing are you eligible for?
There are rules that most Lenders use in order to figure out how much money you can borrow for your mortgage. As this will dictate how much you can pay for your house, it is important to know how much financing you can obtain. You can use a Mortgage Calculator to figure this out.
If your mortgage exceeds 75% of your purchase price, it must be insured pursuant to Federal Legislation. This is not life or disability insurance. This is insurance for the financial institution in case the borrower does not pay the mortgage.
One of the companies which offers this insurance is Canada Mortgage and Housing Corporation (CMHC). The CMHC insurance fee is a percentage, which increases with the percentage of your financing.
The amount of the CMHC insurance fee is added on to your mortgage. There is sales tax (HST) that is charged on the CMHC insurance fee. This amount is not added onto the mortgage, and it is generally subtracted from the mortgage advance made by the lender. There is also a CMHC application fee. This is also not added onto the mortgage. As a result you will need to budget for the amount of the HST and the Application fee and bring it with you to our offices when you come to sign your closing documents shortly before your closing date.
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Feel free to contact us at any point for assistance or advice with respect to Real Estate law. We may be reached at 705.435.4339 or contact us via email .