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Is there a cost to a Mortgage Broker?

Our services are paid for by the lender and there is no cost to you as a client. There are a few specialty qualifying lending situations that a fee may be charged however if that is the case, we will always have that conversation upfront and ensure you know the costs.

Why work with a Broker directly instead of the bank?

Your bank is only able to offer you products that they carry.  As a Mortgage Broker we have access to 50+ lenders and are able to choose a mortgage product that is best suited to you and your needs.  In addition to having access to many more lenders we are going to provide exceptional customer service.  We will return your phone call, respond to your emails and do so in a timely manner.  When working with a Mortgage Broker you have direct access to us and we will be available to continue to assist with your mortgage needs through the years.

If we're thinking of buying a home in 6 months-1 year, when should we start an application or contact you?

We recommend you reach out to us as soon as you start thinking about home ownership or changing your current mortgage/living situation. We can help you create a plan that will put you in the best possible position to achieve your goals. 

What is a pre-approval and how long is it good for?

A pre-approval requires a mortgage expert to do a full underwriting of your file including documentation/credit review. Again, a pre-approval isn’t a full guarantee of financing, which is why we recommend subject to financing, however, if you’re working with an expert broker who spends the time to do this in depth analysis, you can have much more confidence in moving forward with offers on properties than if you just use the basic online “qualifying” templates for calculating your purchasing power. Most banks say you are “pre-approved” even though they more likely just giving you a best guess/estimate. We actually spend the time to do a full review of a client’s situation to ensure that our pre-approvals are filled with confident answers and information that realtors and clients can trust. 

Once we have collected your information and have determined that a certain lender might work with your financial needs/goals, we can ask them for a rate hold that is good for 90-120 days. It’s important to note that a pre-approval is not a “guarantee” of approval when you get an accepted offer on a property. Lenders still need to approve the property you purchase as well as the file details in combination with that property at time of an accepted offer. This is why subject to financing is always recommend. Additionally, should any of your file details change before the completion date of your purchase, this could affect the results of your qualification from the pre-approval stage.

What is your best rate?

We will work hard to get you the best rate possible, but it is important to remember that there is so much more to take into consideration, than just the rate alone. As your Mortgage Broker, we will advise you on other important things to consider, such as pre-payment penalties, the ability to pay down your principal faster, home equity Line eligibility and much more.

What is the difference between a variable and fixed rate mortgage?

A fixed rate means you are locked in for a term and the interest rate will remain the same. A variable rate means that the rate will fluctuate, along with the Bank of Canada Rate. There are two types of variable rate mortgages. One of them is an adjustable rate, which means payments will change as the interest rate changes. Another one is a static payment, which means that while the rate may change, your payment will stay the same for the entire term.

What is the stress test?

The Government of Canada introduced the stress test in 2016 to ensure that Canadians were able to afford their mortgage payments in the event that rates changed. Since then, borrowers now need to qualify at a higher interest rate than what the actual interest rate is.

How much money do I have to earn to qualify?

While each application is different and we need to assess several different things including income, credit, down payment, and property details, however, as a very rough estimate, for every $20,000 of income, you may qualify for approximately $90,000 of mortgage money (give or take).

How much do I have to put down if I am a first-time homebuyer?

Down payment actually doesn’t have anything to do with being a first time home buyer. Down payment rules are the same across BC regardless of whether you are a first time home buyer. That said, all buyers will need to produce 5% for the first $500,000. Anything over $500,000 will require 10% of that additional portion up to $1,000,000. And anything $1,000,000+ needs at least 20% down for the entire amount.

What if I have bad credit and how can I increase my score?

We work with many different financial institutions that have products to help individuals with credit challenges. If you are in a situation where there is no lender willing to say “yes” we will work with you to educate and create a plan. We continue along the mortgage journey with you to get a “yes” from a lender. Paying your bills on time is always best way to increase your score, if any collections owing - ensure to pay them off as soon as you can. After this, keeping the balance of your credit well below the limit (try for 50% as the maximum usage of credit) will help increase your score. We can review credit with any client to give a plan specific for them. 

Can I pay off my mortgage early and are there penalties?

Yes, you can absolutely pay your mortgage off faster than the original amortization without any penalty as well. Every lender has what are called "prepayment options": the ability to put a certain percentage of lump-sum payments towards the original principal or increase your mortgage payments to speed things up

Can I get a mortgage if I have declared bankruptcy recently?

Yes, with a recent bankruptcy or a recent consumer proposal we can obtain approvals on both purchases and refinances. Purchases may require a minimum down payment of 25% and refinancing similarly we can seek up to 75% of the home value in some circumstances. Obviously every situation is unique, but again there are solutions through good mortgage brokers.

I work for myself and I don't claim a lot. Will I still qualify?

We have access to several stated income lenders and will look at all your information to determine the most strategic product placement for you. Two years of proven income is preferred however, we are happy to discuss potential exceptions and alternate options.

What are closing costs?

Closing costs include legal fees, property transfer tax, sometimes appraisal costs, property tax adjustments, etc.

I already have homeowners’ insurance so why do I need mortgage loan insurance?

It is important to note that there are several kinds of insurance names that seem familiar, but they are very different. Your homeowners’ Insurance is there to protect you in case of a fire or direct damage. Mortgage loan insurance is for the lender and protects the lender in case of mortgage default. This is mandatory if you put less than 20% for down payment.

Should I take a 25year Amortization instead of 30 years, to pay it down faster?

If you have a down payment of less that 20% and have an insured mortgage you do not have the option of a 30 year amortization.  If you have more than 20% down payment and your mortgage is not insured you have the option of a 30 year amortization.  While the 25 year amortization is a faster way to pay down your mortgage, sometimes taking a 30 year amortization is a better choice for some borrower’s situations. A 30 year amortization can help with a few things: 1)Borrowers qualify for more mortgage money. 2) monthly payments are lower which helps with monthly cash flow. 3) You can increase your payments to pay it off faster, but also adds the flexibility that if life circumstances change you have the option to return to the original mortgage payment and have that extra cash flow each month rather than if you had chosen a 25 year amortization.

I want to take money out of my property. How much can I take out?

Lenders will allow you to borrow up to 80% of the value of your property providing that you qualify.

Do you deal with only 1 bank?

We work with some of the top lenders in Canada, including big banks, credit unions, and monoline broker lenders. This gives us specialized access to 50+ lender options to find the best fit for each clients needs.

Why do some people get better rates than others?

Rates are dependant on several things, such as your credit score, income to debt ratios, if the property is a rental, the type of mortgage you are after etc. Once we receive a completed application and documents, we will review your information and place you with the best product available to you.

Can you provide home equity lines of credit (or HELOC's/Secured Lines of Credit) as well as mortgages?

Yes, we have access to many lenders that can provide secured lines of credit (often called "HELOC" or Home Equity Line of Credit). The best thing to do is to get in touch and we can look at your complete profile and advise you on all of your options.

Let's Connect.

T: 604-807-7048 E: danny@hornermortgages.ca