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Walker Real Estate Mortgage Package
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Dear Client, We are Cindy and Amanda Walker, Licensed Mortgage Professionals with Dominion Lending Centres Leading Edge located at #201 15955 Fraser Hwy, Surrey, B.C. V4N 0Y3. We have access to a multiple mortgage products and services to meet your unique needs when it comes time to renew your mortgage, refinance to consolidate debt, take equity out of your home for renovation purposes, or even lease business-related equipment.
With have access to more than 90 lending institutions, including big banks, credit unions and trust companies. We are familiar with a vast array of available mortgage products – ranging from financing for the self-employed to financing for those with credit blemishes.
And, best of all, We work for you – not the lenders – ensuring you always receive the best mortgage product and rate to serve your specific needs. Based on the high volume of business we fund, lenders offer us better discounts on mortgages that we can further pass on to our clientele. With interest rates continuing to fall to historic lows, refinancing your existing mortgage and switching to a lower rate may save you a lot of money – possibly thousands of dollars per year. Imagine what you could do with the savings – anything from renovating or investing to going on a much-needed vacation or putting money towards your children’s education. By refinancing now and paying off high-interest debt, such as credit cards, you can put yourself and your family in a better financial position. If your current mortgage is up for renewal, you’re thinking of refinancing your mortgage or you’d like to discuss your options, please give us a call.
About Dominion Lending Centres
Dominion Lending Centres is Canada’s fastest-growing national mortgage brokerage and leasing company with more than 1,600 Mortgage Professionals spanning the country. Launched in January 2006, the company was named Best Newcomer (Mortgage Brokerage Firm) at the prestigious CMP Canadian Mortgage Awards 2008. And at the 2009 CMAs, the company received the Best Branding Award. Dominion Lending Centres was also ranked 23rd on the PROFIT HOT 50 list of emerging growth companies that appeared in the October 2009 issue of Profit Magazine. For more information, visit: www.dominionlending.ca Sincerely, Cindy Walker, AMP Amanda Walker, Licensed Assistant Dominion Lending Centres Leading Edge Tel: 604-889-5004; Fax: 604-541-0897 Email: [email protected] Website: www.whiterockwalker.com
Products & Services
Monthly Income (Net)
Salary -
Salary -
Rental
Other
Other
MONTHLY EXPENSES
Maintaining Your Home Maintaing Your Lifestyle
Mortgage/Rent Eating Out/Coffee
Property Taxes Concerts/Clubs/Movies/Plays
Strata Fees Magazines/Newspapers
Light/Water/Heating Religious/Charitable Donations
Home Insurance Sports/Gym/Club Membership
Cell Phone Gifts/Holiday Presents & Decorations
Cable/Internet/Home Phone Vacations/Travel
Computer Lease Clothing/Shoes
Home Repairs/Home Improvements Hair/Mani-Pedi/Spa/Massages
Home Security Music/Books
Other Other
Maintaining Your Family Maintaining Your Future
Groceries Disability Insurance
Dry Cleaning Critical Illness Insurance
Auto Repairs Long Term Care Insurance
Auto Insurance Life Insurance
Auto Lease/Payments Short Term Savings (Emergencies)
Auto Parking/Parking Tickets Major Purchase Savings (Eg. Home)
Auto Gas RRSP Contributions
Public Transportation/Taxi's Education/RESP Savings
Child Care/Nanny Credit Card Payments
Child Support/Alimony Investment Loan
House Cleaning Loan/Line of Credit Payments
Education (Tuition,Books,Other) Student Loans
Health and Dental Insurance (Private) Other
MSP Other
Drugs/Vision Care (Not Covered) Other
Animal Care Other
Other Other
Other Other
Other Other
Balance Sheet
Total Monthly Income 0
Total Monthly Expenses 0
Cash Flow Surplus/(Deficit) 0
MORTGAGE APPLICATION
Referral: ___________________________
Applicant Information: Full Name S.I.N. Date of Birth Dependants Marital Status
Present Address Postal Code Rent/Own No. Of Years
$
Previous Address: (if less than 3 years at current) Rent/Own No. Of Years
$
Home Phone: Home Fax: Cellular:
Bus Phone: Bus Fax: Email:
Current Employer Years Gross Annual Income Occupation
Previous Employer: (if less than 3 years at current) Years Gross Annual Income Occupation
1
2 Other Income: Source Years Income Occupation
Smoker? ____ Yes ____ No First Time Buyer? _____ Yes ____ No
Co-Applicant Information:
Full Name S.I.N. Date of Birth Marital Status
Address Postal Code Yrs
Home Phone: Home Fax: Cellular:
Business Phone: Bus Fax: Email:
Current Employer Years Gross Annual Income Occupation
Previous Employer: (if less than 3 years at current) Years Gross Annual Income Occupation
1
2
Other Income Years Gross Annual Income Occupation
Smoker? ____ Yes ____ No First Time Buyer? _____ Yes ____ No
Assets: Bank: Location: Type: Balance: $
Bank: Location: Type: Balance: $
RRSP: Value: $
Stocks/Bonds/GIC: Value: $
Automobile: Value: $
Automobile: Value: $
Other Assets: Value: $
Other Assets: Value: $
Other Assets: Value: $
Household Goods: Value: $
Liabilities: Bank Loan/LOC Balance: $ Payment: $
Bank Loan/LOC Balance: $ Payment: $
Bank Loan/LOC Balance: $ Payment: $
Credit Card Type: Balance: $ Payment: $
Credit Card Type: Balance: $ Payment: $
Credit Card Type: Balance: $ Payment: $
Credit Card Type: Balance: $ Payment: $
Other Debt: Balance: $
Other Debt: Balance: $
Current Mortgages/Properties Owned: Address: Property Value: $
Existing Mortgage Bank/Lender: First: Second:
Mortgage Rate: % Monthly Payments: $ Rental Income: $ Mortgage Balance: $
Address: Property Value: $
Existing Mortgage Bank/Lender: First: Second:
Mortgage Rate: % Monthly Payments: $ Rental Income: $ Mortgage Balance: $
Address: Property Value: $
Existing Mortgage Bank/Lender: First: Second:
Mortgage Rate: % Monthly Payments: $ Rental Income: $ Mortgage Balance: $
Signature: Date:
Signature: Date:
Verbal Consent - By Broker Date:
Notes:
Inco
me
Typ
e
Det
aile
d R
equ
irem
ents
Sa
lary
/Ho
url
y W
e w
ill
req
uir
e a
lett
er f
rom
yo
ur
emp
loy
er o
n c
om
pan
y l
ette
rhea
d s
tati
ng
yo
ur
star
t d
ate,
po
siti
on
an
d m
inim
um
sal
ary
. W
e a
lso
re
qu
ire
a cu
rren
t p
ay s
tub
.
If y
ou
r d
eal w
as a
pp
rov
ed o
n t
he
bas
is o
f y
ou
pro
vid
ing
min
imal
inco
me
con
firm
atio
n (
Sta
ted
In
com
e P
rog
ram
), y
ou
nee
d t
o p
rov
ide
a le
tter
of
emp
loy
men
t co
nfi
rmin
g y
ou
r st
art
dat
e a
nd
po
siti
on
alo
ng
wit
h y
ou
r m
ost
rec
ent
No
tice
of
Ass
essm
ent
that
co
nfi
rms
no
in
com
e ta
x ar
rear
s.
Co
mm
issi
on
W
e w
ill
req
uir
e a
lett
er f
rom
yo
ur
emp
loy
er o
n c
om
pan
y l
ette
rhea
d s
tati
ng
yo
ur
star
t d
ate
and
po
siti
on
alo
ng
wit
h y
ou
r N
oti
ce o
f A
s-se
ssm
ent
for
the
last
tw
o y
ears
th
at c
on
firm
s y
ou
r in
com
e.
Bu
sin
ess
fo
r Se
lf
We
wil
l re
qu
ire
Per
son
al T
ax A
sses
smen
t N
oti
ces
for
the
last
tw
o y
ears
co
nfi
rmin
g y
ou
r in
com
e as
wel
l as
fin
an
cial
sta
tem
ents
fro
m
the
bu
sin
ess
for
tho
se s
ame
two
yea
rs.
If y
ou
r m
ort
gag
e is
an
in
sure
d d
eal
wit
h G
enw
ort
h o
r C
MH
C (
see
yo
ur
com
mit
men
t to
co
nfi
rm),
we
wil
l req
uir
e 2
yea
rs N
oti
ce o
f A
s-se
ssm
ent
con
firm
ing
yo
ur
inco
me
as w
ell a
s o
ne
of
the
foll
ow
ing:
Bu
sin
ess
Cre
dit
Rep
ort
, tw
o y
ears
GS
T r
etu
rns,
co
nfi
rmat
ion
of
acti
ve
bu
sin
ess
ban
k a
cco
un
ts in
dic
atin
g tw
o y
ears
sat
isfa
cto
ry o
per
atio
ns
or
two
yea
rs a
ud
ited
or
acco
un
tan
t p
rep
ared
fin
anc
ial
stat
emen
ts.
If y
ou
r d
eal w
as a
pp
rov
ed o
n t
he
bas
is o
f y
ou
pro
vid
ing
min
imal
inco
me
con
firm
atio
n (
Sta
ted
In
com
e P
rog
ram
), y
ou
wil
l b
e re
qu
ired
to
pro
vid
e o
ne
of
the
foll
ow
ing
to c
on
firm
a m
inim
um
of
two
yea
rs b
usi
nes
s fo
r se
lf:
Bu
sin
ess
Cre
dit
Rep
ort
, Bu
sin
ess
Lic
ense
, GST
re
turn
, Art
icle
s o
f In
corp
ora
tio
n, A
cco
un
tan
t p
rep
ared
T1
Gen
eral
s al
on
g w
ith
Sta
tem
ent
of
Bu
sin
ess
Act
ivit
ies.
In
ad
dit
ion
to
on
e o
f th
e ab
ov
e, w
e w
ill a
lso
req
uir
e y
ou
r la
st y
ears
No
tice
of
Ass
essm
ent
that
co
nfi
rms
no
in
com
e ta
x ar
rear
s
Pen
sio
n
We
wil
l re
qu
ire
yo
ur
T4
A f
or
the
mo
st r
ecen
t ta
x y
ear
or
3 m
on
ths
ban
k s
tate
men
ts c
on
firm
ing
auto
mat
ic d
epo
sits
.
Ca
r A
llow
an
ce
We
wil
l re
qu
ire
a le
tter
fro
m y
ou
r em
plo
yer
co
nfi
rmin
g th
at t
he
car
allo
wan
ce i
s a
taxa
ble
in
com
e as
wel
l as
yo
ur
T4
fro
m la
st y
ear
to
con
firm
No
n-T
axab
le
We
wil
l re
qu
ire
on
e o
f th
e fo
llo
win
g co
nfi
rmin
g y
ou
r an
nu
al in
com
e is
no
n-t
axab
le i
nco
me:
a c
urr
ent
pay
stu
b, y
ou
r m
ost
rec
ent
No
-ti
ce O
f A
sses
smen
t, a
lett
er f
rom
th
e so
urc
e o
f y
ou
r in
com
e o
r y
ou
r m
ost
rec
ent
T5
00
7
Bo
nu
s/O
verti
me
W
e w
ill
req
uir
e y
ou
r jo
b le
tter
an
d T
4s
for
the
last
tw
o y
ears
or
No
tice
of
Ass
essm
ent
for
the
pas
t tw
o y
ears
co
nfi
rmin
g y
ou
r av
erag
e n
et in
com
e.
Oth
er In
com
e
We
wil
l re
qu
ire
a le
tter
fro
m y
ou
r em
plo
yer
sta
tin
g y
ou
r st
art
dat
e an
d p
osi
tio
n a
s w
ell a
s y
ou
r N
oti
ce o
f A
sses
smen
t fo
r th
e la
st t
wo
y
ears
co
nfi
rmin
g an
av
erag
e in
com
e.
Inve
stm
ent
We
wil
l re
qu
ire
yo
ur
No
tice
of
Ass
essm
ent
for
the
last
tw
o y
ears
co
nfi
rmin
g a
n a
ver
age
in
com
e
Rel
oca
tio
n
We
wil
l re
qu
ire
a co
py
of
yo
ur
relo
cati
on
lett
er o
r cu
rren
t p
ay s
tub
co
nfi
rmin
g y
ou
r an
nu
al s
alar
y.
If b
on
us
or
com
mis
sio
n i
nco
me
is
incl
ud
ed, a
co
py
of
yo
ur
last
tw
o y
ears
No
tice
of
Ass
essm
ent
or
T4
s to
dem
on
stra
te a
tw
o-y
ear
aver
age
wil
l als
o b
e re
qu
ired
.
Do
wn
Pay
me
nt
Typ
e
Det
aile
d R
equ
irem
ents
Sa
vin
gs a
nd
inve
st-
me
nts
C
on
firm
atio
n o
f n
on
-bo
rro
we
d f
un
ds
sho
win
g ac
cum
ula
tio
n o
f 3
mo
nth
s vi
a b
ank
stat
em
ents
/bo
ok,
GIC
dep
osi
ts, R
RSP
, Can
ada
savi
ngs
B
on
d.
Pro
ceed
s -
Sale
of
an
Exi
stin
g P
rop
erty
Yo
ur
solic
ito
r m
ust
pro
vid
e a
cop
y o
f st
atem
ent
of
adju
stm
ents
/dir
ecti
on
to
pay
, or
tru
st s
tate
men
t co
nfi
rmin
g th
e n
et p
roce
ed
s th
at y
ou
ar
e en
titl
ed t
o.
Gif
ted
Gift
mu
st b
e fr
om
an
imm
edia
te f
amily
me
mb
er a
nd
we
hav
e co
nfi
rmati
on
th
at t
he
fun
ds
hav
e b
een
dep
osi
ted
into
th
e b
orr
ow
er’s
ban
k ac
cou
nt.
Gift
ed d
ow
n p
aym
ent
will
no
t b
e ac
cep
ted
fo
r St
ated
inco
me
dea
ls.
Gift
ed d
ow
n p
aym
ent
is n
ot
acce
pta
ble
if p
urc
has
ing
a re
nta
l pro
per
ty.
Inco
me
Ver
ific
atio
n (
Co
nd
itio
ns
sub
ject
to
ch
ang
e w
ith
ou
t n
oti
ce)
Do
wn
Pay
men
t (C
on
dit
ion
s su
bje
ct t
o c
han
ge
wit
ho
ut
no
tice
)
10 Most Commonly Asked
Mortgage Questions
1. What’s the best rate I can get? Your credit score plays a big part in the interest rate for which you will qualify, as the riskier you appear as a borrower, the higher your rate will be. Rate is definitely not the most important aspect of a mortgage, however, as many rock-bottom rates often come from no frills mortgage products. In other words, even if you qualify for the lowest rate, you often have to give up other things such as prepayments and porting privileges when opting for the lowest-rate product. 2. What’s the maximum mortgage amount for which I can qualify? To determine the amount for which you will qualify, there are two calculations you’ll need to complete. The first is your Gross Debt Service (GDS) ratio. GDS looks at your proposed new housing costs (mortgage payments, taxes, heating costs and 50% of strata/condo fees, if applicable). Generally speaking, this amount should be no more than 32% of your gross monthly income. For example, if your gross monthly income is $4,000, you should not be spending more than $1,280 in monthly housing expenses. Second, you will need to calculate your Total Debt Service (TDS) ratio. The TDS ratio measures your total debt obli-gations (including housing costs, loans, car payments and credit card bills). Generally speaking, your TDS ratio should be no more than 40% of your gross monthly income. Keep in mind that these numbers are prescribed maximums and that you should strive for lower ratios for a more affordable lifestyle. Before falling in love with a potential new home, you may want to obtain a pre-approved mortgage. This will help you stay within your price range and spend your time looking at homes you can reasonably afford. 3. How much money do I need for a down payment? The minimum down payment required is 5% of the purchase price of the home. And in order to avoid paying mortgage default insurance, you need to have at least a 20% down payment. 4. What happens if I don’t have the full down payment amount? There are programs available that enable you to use other forms of down payment, such as from your
RRSPs, a cash-back product, or a gift.
10 Most Commonly Asked
Mortgage Questions
5. What will a lender look at when qualifying me for a mortgage? Most lenders look at five factors when determining whether you qualify for a mortgage: 1. Income; 2. Debts; 3. Employment History; 4. Credit history; and 5. Value of the Property you wish to purchase. One of the first things a lender will consider is how much of your total income you’ll be spending on housing. This helps the lender decide whether you can comfortably afford a house. A lender will then look at your debts, which generally include monthly house payments as well as payments on all loans, credit cards, child support, etc. A history of steady employment, usually within the same job for several years, helps you qualify. But a short history in your current job shouldn’t prevent you from getting a mortgage, as long as there have been no gaps in income over the past two years. Good credit is also very important in qualify-ing for a mortgage. The lender will also want to know that the house is worth the price you plan to pay. 6. Should I go with a fixed- or variable-rate mortgage? The answer to this question depends on your personal risk tolerance. If, for instance, you’re a first-time homebuyer and/or you have a set budget that you can comfortably spend on your mortgage, it’s smart to lock into a fixed mortgage with predictable payments over a specific period of time. If, however, your financial situation can handle the fluctuations of a variable-rate mortgage, this may save you some money over the long run. Another option is to opt for a variable rate, but make payments based on what you would have paid if you selected a fixed rate. Finally, there are also 50/50 mortgage options that enable you to split your mortgage into both fixed and variable portions. 7. What credit score do I need to qualify? Generally speaking, you’re a prime candidate for a mortgage if your credit score is 680 and above. The
higher you can get above 700 the better, as you will qualify for the lowest rates. These days almost anyone
can obtain a mortgage, but the key for those with lower credit scores is the size of the down payment. If you
have a sufficient down payment, you can reduce the risk to the lender providing you with the mortgage.
Statistics show that default rates on mortgages decline as the down payment increases.
10 Most Commonly Asked
Mortgage Questions
8. What happens if my credit score isn’t great? There are several things you can do to boost your credit fairly quickly. Following are five steps you can use to help attain a speedy credit score boost: 1) Pay down credit cards. The number one way to increase your credit score is to pay down your credit cards so they’re below 70% of your limits. Revolving credit like cred-it cards seems to have a more significant impact on credit scores than car loans, lines of credit, and so on. 2) Limit the use of credit cards. Racking up a large amount and then paying it off in monthly instalments can hurt your credit score. If there is a balance at the end of the month, this affects your score – credit for-mulas don’t take into account the fact that you may have paid the balance off the next month. 3) Check credit limits. If your lender is slower at reporting monthly transactions, this can have a significant impact on how other lenders view your file. Ensure everything’s up to date as old bills that have been paid can come back to haunt you. Some financial institutions don’t even report your maximum limits. As such, the credit bureau is left to only use the balance that’s on hand. The problem is, if you consistently charge the same amount each month – say $1,000 to $1,500 – it may appear to the credit-scoring agencies that you’re regularly maxing out your cards. The best bet is to pay your balances down or off before your statement periods close. 4) Keep old cards. Older credit is better credit. If you stop using older credit cards, the issuers may stop updating your accounts. As such, the cards can lose their weight in the credit formula and, therefore, may not be as valuable – even though you have had the cards for a long time. Use these cards periodically and then pay them off. 5) Don’t let mistakes build up. Always dispute any mistakes or situations that may harm your score. If, for instance, a cell phone bill is incorrect and the company will not amend it, you can dispute this by making the credit bureau aware of the situation.
10 Most Commonly Asked
Mortgage Questions
9. How much will I have to pay for closing costs? As a general rule of thumb, it’s recommended that you put aside at least 1.5% of the purchase price (in addition to the down payment) strictly to cover closing costs. There are several items you should budget for when it comes to closing costs. Property Transfer Tax is charged whenever a property is purchased. The tax will vary from jurisdiction to jurisdiction, but I can help with the calculation. GST/HST is only charged on new homes, and does not affect homes priced at less than $400,000. Even homes that exceed the price threshold are only taxed on the portion that exceeds $400,000. Certain conditions may apply. Please contact you lawyer/notary for more detailed information. Your lawyer/notary will charge you a fee for drawing up the mortgage and conveyance of title. The amount of the fee will depend on the individual that you use. The typical cost is $900. If you’re purchasing a single-family home, you’ll need to give your lender a survey certificate showing where the property sits within the property lines. Some exceptions are made, however, on low loan-to-value deals and acreage properties. A survey will cost approximately $300-$350, but the lender will often accept a copy of an existing survey. Other costs include such things as an appraisal fee (approximately $200), title insurance and a home inspection (approximately $350).
10. How much will my mortgage payments be? Monthly mortgage payments vary based on several factors, including: the size of your mortgage; whether you’re paying mortgage default insurance; your mortgage amortization; your interest rate; and your frequency of making mortgage payments. You can view some useful calculators to find out your specific mortgage payments: www.dominionlending.ca/mortgage-calculators
10 Questions Mortgage Brokers
Should Ask But Often Don’t
1. If I have mortgage default insurance do I also need mortgage life insurance? Yes. Mortgage life insurance is a life insurance policy on a homeowner, which will allow your family or dependents to pay off the mortgage on the home should something tragic happen to you. Mortgage default insurance is something lenders require you to purchase to cover their own assets if you have less than a 20% down payment. Mortgage life insurance is meant to protect the family of a homeowner and not the mortgage lender itself. 2. What steps can I take to maximize my mortgage payments and own my home sooner? There are many ways to pay down your mortgage sooner that could save you thousands of dollars in interest payments throughout the term of your mortgage. Most mortgage products, for instance, include prepayment privileges that enable you to pay up to 20% of the principal (the true value of your mortgage minus the interest payments) per calendar year. This will also help reduce your amortization period (the length of your mortgage). Another way to reduce the time it takes to pay off your mortgage involves changing the way you make your payments by opting for accelerated bi-weekly mortgage payments. Not to be confused with semi-monthly mortgage payments (24 payments per year), accelerated bi-weekly mortgage payments (26 payments per year) will not only pay your mortgage off quicker, but it’s guaranteed to save you a significant amount of money over the term of your mortgage. With accelerated bi-weekly mortgage payments, you’re making one additional monthly payment per year. In addition to increased payment options, most lenders offer the opportunity to make lump-sum payments on your mortgage (as much as 20% of the original borrowed amount each year). Please note, however, that some lenders will only let you make these lump-sum payments on the anniversary date of your mortgage while others will allow you to spread out the lump-sum payments to the maximum allowable yearly amount. 3. Can I make lump-sum or other prepayments on my mortgage, or will I be penalized? Most lenders enable lump-sum payments and increased mortgage payments to a maximum amount per
year. But, since each lender and product is different, it’s important to check stipulations on prepayments
prior to signing your mortgage papers. Most “no frills” mortgage products offering the lowest rates often
do not allow for prepayments.
10 Questions Mortgage Brokers
Should Ask But Often Don’t
4. How do I ensure my credit score enables me to qualify for the best possible rate? There are several things you can do to ensure your credit remains in good standing. Following are five steps you can follow: 1) Pay down credit cards. The number one way to increase your credit score is to pay down your credit cards so they’re below 70% of your limits. Revolving credit like credit cards seems to have a more significant impact on credit scores than car loans, lines of credit, and so on. 2) Limit the use of credit cards. Racking up a large amount and then paying it off in monthly instalments can hurt your credit score. If there’s a balance at the end of the month, this affects your score – credit formulas don’t take into account the fact that you may have paid the balance off the next month. 3) Check credit limits. If your lender is slower at reporting monthly transactions, this can have a significant impact on how other lenders view your file. Ensure everything’s up to date as old bills that have been paid can come back to haunt you. Some financial institutions don’t even report your maximum limits. As such, the credit bureau is left to only use the balance that’s on hand. The problem is, if you consistently charge the same amount each month – say $1,000 to $1,500 – it may appear to the credit-scoring agencies that you’re regularly maxing out your cards. The best bet is to pay your balances down or off before your statement periods close. 4) Keep old cards. Older credit is better credit. If you stop using older credit cards, the issuers may stop updating your accounts. As such, the cards can lose their weight in the credit formula and, therefore, may not be as valuable – even though you have had the cards for a long time. Use these cards periodically and then pay them off. 5) Don’t let mistakes build up. Always dispute any mistakes or situations that may harm your score. If, for instance, a cell phone bill is incorrect and the company will not amend it, you can dispute this by making the credit bureau aware of the situation. 5. What amortization will work best for me? While the lending industry’s benchmark amortization period is 25 years, and this is the standard that is
used by lenders when discussing mortgage offers, and usually the basis for mortgage calculators and
payment tables, shorter or longer timeframes are available – to a maximum of 30 years. The main reason
to opt for a shorter amortization period is that you’ll become mortgage-free sooner. And since you’re
agreeing to pay off your mortgage in a shorter period of time, the interest you pay over the life of the
mortgage is, therefore, greatly reduced. A shorter amortization also affords you the luxury of building up
equity in your home sooner. Equity is the difference between any outstanding mortgage on your home and
its market value. While it pays to opt for a shorter amortization period, other considerations must be made
before selecting your amortization. Because you’re reducing the actual number of mortgage payments you
make to pay off your mortgage, your regular payments will be higher. So if your income is irregular because
you’re paid commission or if you’re buying a home for the first time and will be carrying a large mortgage,
a shorter amortization period that increases your regular payment amount and ties up your cash flow may
not be the best option for you.
10 Questions Mortgage Brokers
Should Ask But Often Don’t
6. What mortgage term is best for me? Selecting the mortgage term that’s right for you can be a challenging proposition for even the savviest of homebuyers, as terms typically range from six months up to 10 years. The first consideration when comparing various mortgage terms is to understand that a longer term generally means a higher corresponding interest rate. And, a shorter term generally means a lower corresponding interest rate. While this generalization may lead you to believe that a shorter term is always the preferred option, this isn’t always the case. Sometimes there are other factors – either in the financial markets or in your own life – that you’ll also have to take into consideration when selecting the length of your mortgage term. If paying your mortgage each month places you close to the financial edge of your comfort zone, you may want to opt for a longer mortgage term, such as five or 10 years, so that you can ensure that you’ll be able to afford your mortgage payments should interest rates increase. By the end of a five- or 10-year mortgage term, most buyers are in a better financial situation, have a lower outstanding principal balance and, should interest rates have risen throughout the course of your term, you’ll be able to afford higher mortgage payments. 7. Is my mortgage portable? Fixed-rate products usually have a portability option. Lenders often use a “blended” system where your
current mortgage rate stays the same on the mortgage amount ported over to the new property and the
new balance is calculated using the current rate. With variable-rate mortgages, however, porting is usually
not available. This means that when breaking your existing mortgage, a three-month interest penalty will
be charged. This charge may or may not be reimbursed with your new mortgage. While porting typically
ensures no penalty will be charged when you sell your existing property and buy a new one, it’s best to
check with your mortgage broker for specific conditions. Some lenders allow you to port your mortgage,
but your sale and purchase have to happen on the same day, while others offer extended periods.
8. If I want to move before my mortgage term is up, what are my options? The answer to this question often depends on your specific lender and what type of mortgage you have.
While fixed mortgages are often portable, variable are not. Some lenders allow you to port your mortgage,
but your sale and purchase have to happen on the same day, while others offer extended periods. As long
as there’s not too much time between the sale of your existing home and the purchase of the new home,
as a rule of thumb most lenders will allow you to port the mortgage. In other words, you keep your existing
mortgage and add the extra funds you need to buy the new house on top. The interest rate is a blend
between your existing mortgage rate and the current rate at the time you require the extra money.
10 Questions Mortgage Brokers
Should Ask But Often Don’t
9. What steps can I take to help ensure I don’t become a victim of title or mortgage fraud? The best way to prevent fraud is to be aware of how it’s committed. Following are some red flags for
mortgage fraud: someone offers you money to use your name and credit information to obtain a mortgage;
you’re encouraged to include false information on a mortgage application; you’re asked to leave signature
lines or other important areas of your mortgage application blank; the seller or investment advisor
discourages you from seeing or inspecting the property you will be purchasing; or the seller or developer
rebates you money on closing, and you don’t disclose this to your lending institution. Sadly, the only red
flag for title fraud occurs when your mortgage mysteriously goes into default and the lender begins
foreclosure proceedings. Even worse, as the homeowner, you’re the one hurt by title fraud, rather than the
lender, as is often the case with mortgage fraud. Unlike with mortgage fraud, during title fraud, you haven’t
been approached or offered anything – this is a form of identity theft. Following are ways you can protect
yourself from title fraud: always view the property you’re purchasing in person; check listings in the
community where the property is located – compare features, size and location to establish if the asking
price seems reasonable; make sure your representative is a licensed real estate agent; beware of a real
estate agent or mortgage broker who has a financial interest in the transaction; ask for a copy of the land
title or go to a registry office and request a historical title search; in the offer to purchase, include the
option to have the property appraised by a designated or accredited appraiser; insist on a home inspection
to guard against buying a home that has been cosmetically renovated or formerly used as a grow house or
meth lab; ask to see receipts for recent renovations; when you make a deposit, ensure your money is
protected by being held “in trust”; and consider the purchase of title insurance.
10. How do I ensure I get the best mortgage product and rate upon renewal at the end of my term? The best way to ensure you receive the best mortgage product and rate at renewal is to enlist your
mortgage broker once again to get the lenders competing for your business just like they did when you
negotiated your last mortgage. A lot can change over a single mortgage term, and you can miss out on a lot
of savings and options if you simply sign a renewal with your existing lender without consulting your
mortgage broker.
Tips To Keep In Mind Between Your
Mortgage Approval and Funding Dates
In light of the new market realities and tightening of credit underwriting standards by both lenders and
mortgage default insurers as of late, keep in mind that now – more than ever – it’s important to be careful
what you do between the time your mortgage is approved and when it funds.
A few mortgage lenders and insurers have been doing something lately that they have not done in a long time
– pulling new credit bureaus prior to funding, especially if there is a long period between the time of your
approval and when the mortgage actually funds.
Following are eight tips to keep in mind between your mortgage approval and funding dates:
1. Don’t buy a new car or trade-up to a more expensive lease.
2. Don’t quit your job or change jobs. Even if it’s a better-paying job, you still are likely to be on a
probationary period. If in doubt, call your mortgage professional and they can let you know if this may
jeopardize your approval.
3. Don’t change industries, decide to become self-employed or accept a contract position even if it’s
within the same industry. Delay the start of your new job, self-employment or contract status until after the
funding date of your mortgage.
4. Don’t transfer large sums of money between bank accounts. Lenders get especially skittish about this
one because it looks like you’re borrowing money. Be ready to document cash transactions or money
movements.
5. Don’t forget to pay your bills, even ones that you’re disputing. This can be a real deal-breaker. If the
lender pulls your credit bureau prior to closing and sees a collection or a delinquent account, the best you can
hope for is that they make you pay off the account before they will fund. You don’t want to have to scramble
to pay off a debt at the last minute!
6. Don’t open new credit cards. Again, just wait until after your funding date.
7. Don’t accept a cash gift without properly documenting it – even if this is from proceeds of a wedding.
If you have a bunch of cash to deposit before your funding date, give your mortgage professional a call
before you deposit it.
Don’t buy furniture on the “Do not pay for XX years plan” until after funding. Even though you don’t
have to pay now, it will still be reported on your credit bureau, and will become an issue – especially if your
approval was tight to begin with.
While you may not risk losing your mortgage approval because you have broken one of these rules, it’s
always best to talk to your mortgage professional before doing any of the above just to make sure!
