Let Our Knowledge, Experience and Connections Work for You!
With mortgage rates at historic lows there's never been a better time to buy your first home. Let us help you understand the options available to you at this important and exciting stage in your life.
We have been helping first time buyers in the greater GTA, Mississauga, Oakville, Vaughan and Brampton areas for the past 17 years.
We are here to help you answer all your questions about potentially the largest investments you will likely make. Having not only an experienced mortgage broker but someone whom you can trust to provide you with the right answers and choices for your specific needs is imperative.
Our goal is to provide you with the service excellence and integrity you deserve and should expect for this important time in your life. We will provide you with all the information, sound advice and the assistance you need, every step of the way.
Are you aware of government programs available to you?
Choosing a Realtor
Choosing the right realtor can help ensure you get the right house at the right price. You want a real estate agent whose attitude and availability inspire your trust.
Set up appointments with a few agents from different companies and assess their presentations. Are they prepared? Have they done their homework in advance? Be sure to ask if the realtor is acting for a vendor or for you. Work with someone you relate to, with whom you have some chemistry, and who offers excellent service and value.
Making Home Hunting Fun
There's no shortage of information on the internet available to help you make an informed purchase decision. Lenders, as well as CMHC, the Canadian Bankers' Association, the Ontario Real Estate Association, and the Home Builders' Association, among others, have information to make home hunting stress-free and fun. Visit their websites for more information.
Take the guesswork out of shopping for a home by taking advantage of professional resources available to guide you through the many choices available when purchasing your first home.
Affordability and Financing
Let's set up an appointment to review your current income and expenses and determine affordability. We'll help you take into account how your new mortgage may change your monthly expenses. Securing a pre-approved mortgage with a lender that checks your credit rating will allow you to get an idea about how much mortgage you may qualify for, so you can have a price range in mind when you look at different properties.
Lenders determine affordability by looking at your Gross Debt Service ratio (GDS) and your Total Debt Service ratio (TDS). The GDS ratio is based on what you can afford to pay each month; it includes mortgage payments, taxes and utilities. The TDS ratio includes everything covered under GDS plus all your other financial obligations.
The pre-qualifying stage is also the time to ensure that your credit it acceptable to the lenders and if there are any issues that we have time to iron them out. We will run your credit bureau report and ask for written confirmation on income, as well as how much you plan to put down on our purchase.
We will evaluate if you qualify for government assistance programs and discuss your closing costs with you, such as land transfer taxes, legal fees, and other disbursements.
Once you are pre-qualified, the interest rate will be guaranteed for 60 to 120 days from the time of your application. If rates drop, you'll get the lower rate; if they rise, you're covered. And just because you pre-qualified by a certain financial institution, you're by no means committed to that lender. We'll continue to shop the market to get you the deal that we believe will suit your needs!
Selecting the Right Mortgage
Choices in selecting a mortgage include:
Conventional vs. High-Ratio or Insured Mortgages
A conventional mortgage is a mortgage that has a principal amount that is no more than 80% of the appraised value or purchase price of the property, whichever is less. The principal amount of a high-ratio or insured mortgage is usually more than 80% of the appraised value or purchase price. An insured or high-ratio mortgage may also be referred to as an NHA mortgage because it may be entered under the provisions of the National Housing Act and in many cases must, by law, be insured. In general, the borrower pays the insurance premium as well as application, legal, and property appraisal fees.
Closed vs. Open Mortgages
Closed mortgages generally offer lower interest rates than open mortgages of the same term, but open mortgages let you pay off as much as you want, any time, without paying a prepayment charge.
Short Term vs. Long Term
The term you select is important, too. Short term mortgages are appropriate if you believe interest rates will be lower at renewal time. Long term mortgages are suitable if you feel current rates are reasonable and you want the security of budgeting for the future. This may be especially important for first time homebuyers.
Fixed Rate vs. Variable Rate
You can choose a fixed or variable interest rate. A fixed rate mortgage makes it easier for you to budget for whatever term you select. A variable rate mortgage fluctuates with the market.
Specialty mortgages creatively combine the best of all worlds. Your mortgage specialist can help you select the options that are best for you.
Applying for Your Mortgage Checklist
When applying for a mortgage, you will need:
A copy of the accepted Offer To Purchase and the land survey.
A salary letter from your employer (self-employed buyers may require financial statements for the past three years as well as personal income tax returns).
Confirmation that your down payment came from your own resources (e.g. bank statements or a gift letter).
A list of all your assets and debts along with account numbers.
A copy of the real estate listing if buying an existing home.
Condominium financial statements, if applicable.
If you are buying a home to be constructed, bring a picture of the property, a copy of the building plans and specifications, the land survey, plus your agreement with the builder.
We can help you determine how much you can afford, obtain a pre-qualified approval, and select the mortgage that's right for you. This allows you to act quickly when you find the home you want. After your real estate agent draws up an Offer To Purchase between you and the vendor, contact your mortgage broker. Your deal is almost complete!
Before You Sign the Offer
Select a lawyer as you'd select a real estate agent. We can help with that by referring lawyers we have worked with in the past and whom we trust to work on your behalf. Research and seek competitive fees, excellent service, knowledge, and approachability - in other words, value.
In addition we will work closely with your lender and lawyer to co-ordinate and draft the appropriate documents right up until the deal is closed and your home has been transferred securely to your name.
A few days before closing, you'll visit your lawyer's office to sign the closing documents. Bring a certified cheque for the balance of the closing funds, because the lawyer pays the relevant parties on your behalf. Part of that amount covers the lawyer's fee and disbursement costs. The lawyer obtains the mortgage funds directly from the lender funding your mortgage.
On Closing Day
Your lawyer will close the transaction with the vendor's lawyer. At this time, the balance of the purchase price will be exchanged for the keys to your home and closing documents will be exchanged. Your lawyer will register the deed or title transfer and the mortgage. Finally, you pick up the keys to your new home!
After closing, your lawyer will send you a reporting letter and copies of all the documents you signed including the deed, the mortgage, and the survey, as well as a summary of the flow of funds. Be sure to keep these important records in a secure location.
Mortgage Life Insurance
It's a sound idea to seriously consider mortgage life insurance. Generally, the cost is low and can be incorporated into your mortgage payments. In the event of death, terminal illness, or permanent disability, your balance will be paid in full (because details vary among financial institutions, it's a good idea to read the policy carefully). Quotes are available with each approved mortgage.
Financial institutions vary in their prepayment privileges, which let you pay down your mortgage faster. Your mortgage specialist can discuss your prepayment options with you, based on the mortgage you select. Also be aware that the longer the amortization period (the time it takes to pay off a mortgage), the more interest you'll end up paying. Amortization periods usually range from 5 to 25 years.
Weekly or biweekly instead of monthly payments could shave a considerable amount on your overall mortgage interest payments, depending on current interest rates.
Another option to consider is portability, which may help to ensure that you have financing if you sell your original home and purchase a new one. You may also wish to consider whether, if you sell your home, your mortgage may be assumed by the buyer. This can be a major advantage if your mortgage rate is below current market rates.