There are several things to consider before you take the plunge and put your home up for sale. This might sound obvious, but the first step is to call your mortgage broker, not your lender directly or your realtor.
You don’t have to look long for an unfortunate story of someone who didn’t understand their portability, penalty or transfer costs. Here’s how you avoid this scenario.

1. The anniversary date of your mortgage will depend on your penalty. If you are in a variable rate there usually (unless you took some kind of no frills product with an additional penalty for the appearance of a lower rate) will pay 3 months interest (so a monthly payment and a half) in a fixed rate it can be up to 1-4.5% of the outstanding mortgage balance. Remember we can estimate things, the only guarantee you will have of your penalty is when the lawyer requests the payout statement.

2. Just because a mortgage says its portable doesn’t mean you don’t have to completely re-qualify. Changing properties means complete requalification of everything; credit, income and property. Less than one per cent of mortgages actually get ported due to the changes in the market, or your circumstances.

3. If you have accumulated outside debt, you may not even qualify to purchase for more due to recent rule changes. You’ll need clarity on what the approximate net will be after anything that is required to be paid out to improve qualification.

4. If you list your property and want to buy first or need money for a deposit, you may need to change your mortgage first which you won’t qualify for if your property is already listed. This happens frequently when downsizers are selling.

5. Making a purchase requires a deposit that later forms part of the down payment, so understanding this before you go out shopping helps you plan for it

A little preparation helps the process go more smoothly, and Dominion Lending Centres mortgage specialists are here to help.

Courtesy of Angela Calla, AMP – DLC Angela Calls Mortgage Team

When you apply for a loan, lenders assess your credit risk based on a number of factors. Your credit score, as well as the information on your credit report, are key ingredients in determining whether you’ll be able to get financing and the rate you’ll pay. To get approved for a loan and to pay a lower interest rate it’s important that your credit report reflects that you’re a responsible borrower who pays their debts on time with a low risk of defaulting.

Credit Report vs. Credit Score
To start with, it’s important to understand that your credit report and your credit score are two separate things.

Credit Report – Your credit report contains information detailing your credit history. Sources include lenders, utility companies and landlords. This information is compiled by one of two major credit-reporting agencies (Equifax and TransUnion) that try to create an accurate picture of your financial history. Credit files include information such as:
• Name, address and social insurance number
• Types of credit you use
• When you opened a loan or line of credit
• The balances and available credit on your credit cards and other lines of credit
• Information about whether you pay your bills on time
• Information about any accounts passed to a collection’s agency
• How much new credit you’ve opened recently
• Records related to bankruptcy, tax liens or court judgments
Errors on your credit report can reduce your score artificially. In fact, 1 in 4 consumers have damaging credit report errors. Therefore, it’s important to stay up-to-date on your credit report history. If there is an error, you should dispute it and get it removed as soon as possible. Last year, 4 out of 5 consumers who filed a dispute got their credit report modified, according to a U.S. study by the Federal Trade Commission.

Credit Score – Your credit score is the actual numeric value extrapolated from the information in your credit report. A credit-reporting bureau applies a complex mathematical algorithm to the information in your credit file to create your numerical credit score.
Beacon is the most widely known credit scoring formula in Canada and is used by many creditors. Your FICO score can range from 300 to 850, with under 400 being very low and 700+ putting you in the healthy range. Your credit score is meant to give potential lenders an idea of how big of a financial risk you are. The higher your score, the less likely you are to default or make late payments and the more likely you are to be approved for financing.
Your score is based most strongly on three factors: your payment history (35% of your score), the amounts owed on credit cards and other debt (30%) and how long you’ve had credit (15%).

What Are They Used For?
Lenders glance at your credit score to determine your credit risk. Most traditional lenders have pre-set standards. If your credit score is within a certain range, they’ll offer you certain credit terms. If you don’t fall within their approved range, then you may be denied. Most banking institutions will only approve a loan if the client has a credit score of at least 640. A score of 700, however, gives you a much better chance at gaining approval at most lending institutions and at reasonable rates.
As far as interest rates are concerned, banks use an array of factors to set them. The truth is they are looking to maximize profits for themselves and shareholders. On the other hand, consumers and businesses seek the lowest rate possible. A commonsense approach for getting a good rate would be having the highest credit score possible.
It’s important to note that if you apply for a loan, the lender will most likely pull your credit score through what is commonly called a “hard inquiry” on your credit, which slightly lowers your credit score. Therefore, it’s important to know your credit score ahead of time, fix any errors, and apply for loans which you have a good chance of being approved for.

Things You Can Do to Improve Your Credit Score

1. Check your credit report for errors – While the credit agencies do their best to keep your record free of errors, they can make mistakes. It’s important to check your credit report at least once a year — consumers are entitled to one free credit report every 12 months — to ensure all of the information is correct. Each agency may have slightly different information and, consequently, may have errors another credit report doesn’t.
2. Set up payment reminders – Making credit payments on time is one of the biggest contributing factors of your credit score. It may be helpful to set up automatic payments through credit card or loan providers so you don’t forget to pay when payment is due.
3. Reduce the amount of debt you owe – Stop using your credit cards. Use your credit report to make a list of all your accounts and check recent statements to determine how much you owe on each account and what interest rate they’re charging you. Then create a payment plan to lower or eliminate the debt you still owe.

How Dominion Lending Centres Can Help
Many businesses need financing to start or expand. Although your credit score is only one component of your lender’s decision, it’s an important one. If you have a low credit score and are unable to secure financing through a traditional bank, DLC Leasing will be able to get you approved with our team of lenders. When the bank says no, our team will still say yes with flexible terms and interest rates.

Courtesy of Jennifer Okkerse, Dominion Lending Centres – Director of Operations, Leasing Division

Having completed dozens of reverse mortgage deals, there are some questions that I find I get over and over again.
So today I thought I’d write a piece on the 8 most common reverse mortgage questions that people in Canada have regarding reverse mortgages.

1- If I have an existing mortgage on the property, can I get a reverse mortgage?
Not only is this the most common question regarding reverse mortgages, it is actually one of the most common uses for a reverse mortgage – to pay off the current mortgage and eliminate that payment and help with monthly cash flow.
However, it is important to realize that you would need to qualify for enough to pay that existing mortgage in full.
For example: If you have $70,000 remaining on the mortgage, you would need to qualify for at least $70,000 to be eligible for a reverse mortgage.
If you owe $70,000 and qualify for $100,000 in reverse mortgage funds, the $70,000 would be paid first and you would be left with the remaining $30,000.
The good news is that the reverse mortgage funds can also be used to pay any penalties or charges for paying out your mortgage as well.
However, the existing mortgage must always be paid off using the reverse mortgage funds and you get to keep whatever is left. Essentially, you are swapping your mortgage with a reverse mortgage and keeping the excess cash.

2 – Can I pay the interest or make payments on the amount I receive?
Yes, you can make monthly interest payment if you choose and you can also pay up to 10% of the amount borrowed (1 payment per year) if you wish.
However, you also have the option to pay nothing at all until you sell the property or until you pass away. Most people choose this option but it is nice to know that you can pay the interest every month (essentially turn the reverse mortgage into the same thing as a Home Equity Line Of Credit).

3 – How do you determine how much I qualify for? I thought I could get 55% of my home value?
This is a common question that we get. It is important to note that you can qualify for up to 55% of the value of the property and not everyone will get this amount. The words ‘up to’ are very important in this statement.
To determine how much you qualify for, four different factors are used: The ages of all applicants, the property value, the property location (postal code) and the property type.
Here is a quick example for all 4 factors: Someone aged 80 will qualify for more than someone aged 60; someone in a city will qualify for more than someone in the countryside; someone with a property value of $500,000 will qualify for more than someone whose value is $200,000 and someone who lives in a detached house will usually qualify for more than someone who lives in a Condo.

4 – I’m 60 but my wife is 53, can we still qualify?
Unfortunately, no. Both applicants need to be 55 or over to qualify. Even if just one of you is on the title, because it is deemed a ‘matrimonial home’ (meaning that the husband and wife both have a legal right to the home, by nature of being married) both of you need to be 55 or over.

5 – What is involved in the application?
Reverse mortgages aren’t as difficult a process to go through as a traditional mortgage. However, you aren’t going to simply be given the money either – remember you are still talking about large amounts of money here and the lender is a Schedule A bank.
Your credit score and income are not usually significant factors in the application – but the lender will still check these. In addition to this, proof of identity and other such paperwork is required.
An appraisal is always required and is the first step – so the lender can identify the market value of your home and therefore how much they can lend. However, it is possible to get a ‘quote’ before this.

6 – What if I want to sell my home?
You can sell your house at any time if you have a reverse mortgage. The mortgage amount (plus any accrued interest and prepayment penalties, if any) would then be paid from the proceeds of the sale. The process would be exactly the same as if you had any other kind of mortgage or HELOC on the property.

7 – Will I still own my home? Yes, you will remain on the title for as long as you or your spouse live in the property and you can never be forced out of your home because of a reverse mortgage.
In fact, from this point of view a reverse mortgage is ‘safer’ than a traditional mortgage. Under a traditional mortgage, you could lose your home for not paying your monthly mortgage payments. Since no such payments exist for a reverse mortgage, there is no such risk.

8 – If I sell my house, can I re-apply for another reverse mortgage on my new property? Absolutely! As long as the property is your primary residence – but just remember that you would need to qualify for enough to pay any mortgage on the new property.
Reverse mortgages can be used for purchases in this way.

If you have any questions, please contact your local Dominion Lending Centres mortgage specialist.

Courtesy of Michael Sneddon, AMP – DLC Edge Financial

The best part of writing about mortgages is that I get the chance to educate people about a topic which I find endlessly interesting. Reverse mortgages are certainly a topic which deserves some consideration. Everyone seems to be quite polarized over this issue so it seems it is past time we took a closer look.

Imagine the following scenarios:
1. Bob receives a CPP and OAS and a small work pension. His fridge has died but all of Bob’s credit facilities are maxed and he has been declined for additional credit.
2. Sue needs to put her husband Joe into long term care but the cost is much higher than they anticipated and she knows their savings will not last long.
3. Mary and Bill want to purchase a property in Arizona so they can enjoy the warmer weather.
4. Steve wants to be able to use the equity in his home to purchase a rental property so he has additional cash flow.
5. Eveline recently saw an increase in her living expenses and cannot make the ends meet.
6. Cyrill and his wife would like to gift the inheritance to the kids while they are able to watch them enjoy it.

So you get the idea. There are many situations that a person may benefit from having a reverse mortgage. The extra funds could help them through a tough spot or allow the freedom extra funds can offer.

Here in a nutshell are the facts.
• There is only one provider of reverse mortgages in Canada and they are regulated by the Federal government like any other bank.
• They have been around for 30 years.
• You remain the owner of the home, not the bank.
• Unlike a regular mortgage, you do not need to qualify based on income.
• The goal is equity preservation. They want you to have the same equity in your home at the end as you do now.
• NO payments are required as long as you still live in the home though you can if you like.
• The rates are not horrible and the only fees you pay are $1495 for the closing costs, an appraisal and the fee for independent legal advice.
• The amount you can borrow is based on your age, location, property type and the value of the home.
• The money can be taken as a lump sum or month by month, whichever suits you better and it can be used for whatever you like though there is due diligence to protect you.
• If you are survived by your spouse they can remain in the home payment free.
• Tax arrears, OPD, bankruptcies can all be paid from the proceeds.
• Your family is welcome to ask their questions to protect your interests and the mortgage company knows that you want to have something to leave the kids, they will help you achieve that goal.

As always you should speak with a Dominion Lending Centres mortgage professional. My hope is that you may have seen that a reverse mortgage is not an evil entity designed to take your home but instead should be viewed as just another tool available to you.

Courtesy of Pam Pikkert, AMP – DLC Regional Mortgage Group

From the pages of the summer edition of Dominion Lending Centres’ Our House Magazine.

For most Canadians, a home comes in just a few different varieties. It’s either a single-family wood frame house, townhome, condo or high-rise. In the quest to find less expensive housing, alternatives to the conventional home were bound to get serious traction. From container homes to tiny homes and even the centuries-old design of a yurt, Canadians and Canadian manufacturers are starting to look at the home in an entirely different way.
Daniel Croft is the vice president of Giant Container Services, a Toronto company that’s been converting shipping containers into places to live since the beginning of the decade. The company has its roots in the trucking industry. In the early 2000s Croft’s grandfather started noticing these containers being used for storage. The company bought 100 and after a few years, a new division was born to turn the containers into homes. Since then, Croft noted business has been brisk.
“We’re seeing a huge interest in container homes,” he says, noting some of the company’s projects include condominiums built out of hundreds of containers. However, he noted at this point, most of his clients are using the containers as a vacation property home.
Giant Containers offers four to five different models ranging from 320 to 1,000 square feet at a cost $85 a square foot.
While the containers are basically just a prefabricated steel structure, Croft says they’re built like a house, and include electrical and plumbing like a traditional build.
He says his company also helps guide owners through the process of erecting the containers.
Croft sees the prefabrication of living structures, like containers, as the future of home ownership, noting they can be transported at low costs and can last longer than a conventional wood frame home.
“Our demographic knows they want to be in a container house, they like the look and feel of it and the sustainability aspect,” he says, noting his customers range in age from millennials to couples in their 40s. “This is something I’ve really been behind… I really do think this is the future of building.”
Across the country in B.C., Nomad Micro Homes is also seeing a surge of interest in its product. The company offers two types of micro homes, the most popular being its 156-square foot Nomad Cube, which also comes with a 100-square foot loft. The Cube will set you back about $32,000.
The company’s founder and CEO, Ian Kent, describes the product as a “do it yourself” kit home, similar to something you’d buy in Ikea that can be put together very quickly. While they may be simple, he notes people can live in them as a primary residence. Nomad’s homes also aren’t on wheels, like some versions of tiny homes.
The company sells about 20 to 30 of their homes a year, but the company can increase scale to produce thousands of units if needed. Kent sees the tiny home as one answer to a rental supply crisis gripping B.C.’s Lower Mainland.
“It’s an extremely low-impact backyard dwelling,” he said. Nobody cares about it, you’re not going to bother anybody with it, and you’re going to provide the most affordable housing in the Lower Mainland.”
Indeed, cities and governments are starting to recognize and consider these less typical ways to live.
In 2016, the City of Vancouver put out a request for proposals to build 300 containers for temporary housing for the homeless. The city has also led the way in approving laneway homes.
Avi Friedman, a professor of architecture at McGill University in Montreal, believes the shrinking size of the home is a reflection of the economy—building larger homes costs more—and a change in demography as families become smaller.
He suggested buyers want bigger homes to start with, but when millennials especially enter the market, they’re just not able to afford the size of dwelling their parents owned.
In the past, Friedman notes, many people’s first home was a single family house, but today most people begin their adult life in an apartment.
“We are now living in a time where there are so many critical changes,” he says.
While the professor agrees these alternative homes can help alleviate the housing pressures in areas like Toronto and Vancouver, he wouldn’t want to see tiny homes in all communities. Instead, he sees these homes integrated among a range of housing options.
Friedman also called on municipalities to be innovative, allowing for flexible designs to address the housing issues.
“What municipalities can do is revisit archaic bylaws that have been introduced in the 1940s and ’50s and see how they can be readjusted to current economic and social reality,” he said.
But if the container or tiny home isn’t your thing, there’s a centuries-old way of living to put you more in touch with nature. The yurt design is essentially that of a circular tent. Patrick Ladisa, the president of Yurta, a yurt manufacturer in Toronto, says he’s always been interested in minimalist architecture and, in 2004, his company built its first yurt, meant to be used as relief shelter.
“It really was a cost-effective living shelter. That was our core market for years,” he explains.
The company makes three sizes of yurts, the most popular being 17 feet in diameter with a price range between $7,500 to $20,000, depending on options. Some of those options include windows and a solid door. What you won’t likely see is much indoor plumbing. Ladisa noted the attraction to the yurt compared to the container or tiny home is a desire to be close to nature and a connection to the outdoors.
However the business has evolved into the recreational market for people using the structures as a guest space at a cottage, or in place of a cabin in the woods. The small company with six employees expects to sell out of its yurts for the year by the summer. Customers come from across the country.
“The cost of housing is increasing and finding a way to live inexpensively or have a livable shelter that’s cost-effective… but still has dignified living, that’s a key part for us,” Ladisa says.

Courtesy of Jeremy Deutsch – Lead Writer – Dominion Lending Centres

Mortgage rules have become stricter over the past few years. Assuming you have a down payment, good credit and a good job, what could prevent you from obtaining financing for a home purchase?
Below are five less obvious reasons a bank may turn you down:

It’s not you, it’s the building
Hate to be the bearer of bad news, but even if you’re the perfect candidate for a loan, you can still be rejected by a lender if the building you’re considering flunks a bank’s requirements. There are myriad reasons a building can be rejected, but one possible reason could be the building construction or condition.
In downtown Calgary we have some condos that were built in the 1970’s using a technique called Post Tension. It has been discovered that the steel rods in the walls can corrode over time and the buildings could collapse. Some lenders are okay with an engineer’s report but others won’t consider lending in this type of building. A few years ago a condo was found to have water seeping down between the inner and outer walls from the roof. This resulted in a $70,000 special assessment for each condo owner. Before the problem and the cost were assessed most lenders refused to lend on this property.
If a condominium building does not have a large enough a reserve fund for repairs a lender may want to avoid lending in that building as well.

Your credit doesn’t make the cut
If you have a credit score of 680+ this probably won’t be a problem for you but for first time home buyers with limited credit this can be a major stumbling block to home ownership. Check your credit score before you start your home search.
Not having enough credit can also be a problem. If you have a Visa card with a $300 limit, that won’t cut it. A minimum of 2 credit lines with limits of $2,000 is needed; one revolving credit line such as a credit card and an installment loan such as a car loan or a furniture store loan.
A long forgotten student loan or utility bill from your university days can also cause problems if its showing as a collection.
You’re lacking a paper trail
You have to be able to show where your money comes from. A cash gift of the down payment for your new property without a paper trail isn’t going to fly with the bank. If it is a gift, we need to see the account that the money came from, a gift letter from a family member, and the account the money was deposited into.

Your job
Being self-employed or a consultant comes with its own set of obstacles. But the solution here, too, is about documentation. And be prepared to offer up more documentation than someone with a more permanent income stream. Two years of Notices of Assessment from the CRA will show your average income over a two-year period. This could be a problem if your business had a slow start and then really picked up in year two. The two-year average would be a lot lower than your present income.
Another stumbling block may be how you are paid. Many people in the trucking industry get paid by the mile or the load. Once again a two year NOA average should help.
In Alberta, many people are paid northern allowances, overtime and a series of pay incentives not seen in other industries. This can be a problem if you do not have a two-year history.
When you apply for a mortgage you need to stay at your position at least until after your home purchase is complete. Making a job change with a 90 day probation means you will need to be past your probation before the mortgage closes. If you make a career change , you may need to be in your new industry for a least a year before a lender will consider giving you a loan.
The property’s appraisal value is too low
This often happens in a fast moving market. The appraisers base their value on previously sold homes on the market in the last 90 days. If prices have gone up quickly your home value may not be in line with the appraisers value. If the home you want to purchase is going for $500,000 and the appraised value is $480,000, you have to come up with $20,000 PLUS the 5% down payment in order to make the deal work.
Finally, with all the potential problems that can arise, it’s best to contact a Dominion Lending Centres mortgage broker before you start the home search to make sure that you have your ducks in a row.

Courtesy of David Cooke, AMP – DLC Westcor

The human brain struggles with distinguishing between a real or imagined threat.

Is it a snake? Or just a shoelace?

One may kill us quick, and so we react fast and think it through later… or maybe never.

Is the often cited, rarely critiqued, ‘debt-to-income’ ratio a snake or a shoelace?

A killer lying in wait or a meaningless footnote?

Federal regulators, and most mainstream media, would have us believe that at 167% it’s an Anaconda slithering through our sheets while we sleep, readying to swallow each household whole.

Two key points often absent from the debt-to-income conversation:

1.      The average household debt figure is largely irrelevant to the financial success of our individual household(s)

2.      What is my own debt-to-income ratio? And am I worrying about it at, say, 500%?

Perceived Reality

If one were to stop a citizen on the street and ask them if they believe today’s low interest rates have allowed Canadians to borrow more money than they should have most would say yes.

If one were to stop a citizen on the street and ask them if they believe today’s low interest rates have allowed housing prices to rise too high too fast, most would say yes.

If on the heels of these two questions you then asked one more question: Should government step in and tighten regulations?

Most at this point with this context would say yes.

And these citizens would be wrong.

Also by “yes” what these citizens mean to say is “regulate my reckless neighbours – not me, I’m cool.”

Framing matters

Let’s ask a few more questions.

Would it sound reasonable to take on a $2,000 mortgage payment with a household income of $100,000?

Is it fair to say that the same $100,000 per year household income could support a $2,600 monthly housing payment?

Likely we are going to get a “yes” response to both of these questions. As indeed these numbers are reasonable by any measure.

Numerical Reality

The $2,000 per month payment represents a monthly payment at today’s interest rates on a $500,000 mortgage balance.

Ah but what if rates double you ask? What if indeed…

The $2,600 per month payment represents a monthly payment at double today’s rates (when that $500,000 mortgage balance comes up for renewal).

Readers quick with numbers can see where this is headed, this household with their $500,000 mortgage balance and a $100,000 household income has a debt-to-income ratio of 500%.

Are they freaking out, suffering desperate times, readying a kidney for sale?

Not at all.

To be fair they do have concerns about debt levels – your debt levels!

The 500% debt-to-income household has things under control; they know that ~$1,000 of that ~$2,000 payment is principle reduction, a forced savings plan. They also know that the ~$1,000 interest component per month (fixed for the next five years) is way less than what they were paying in rent last year, and unlike rent this expense will not rise for five full years…and their mortgage debt balance will be dropping steadily. (by ~$60,000 over the first five years).

How many renters will see a ~$60,000 increase in net worth over the next five years? (this amount assumes 0% movement in home prices)

Nonetheless citizens remain concerned. Concerned that today’s low rates have allowed you to borrow more than you should have – and as you know, you are A-OK.

Guess what, your neighbours are OK too.

They are OK with a 500% debt-to-income.

Although few in Canada actually have a debt-to-income ratio this high; in fact Bank of Canada research shows that just 8% of Canadians have a debt-to-income ratio above 350%.

The example used in this piece is in fact a complete outlier, and not at all the norm; we are far more conservative than even these comfortable figures.

Tomorrow we discuss houses, in particular – glass houses and those who reside in them.

Courtesy of Dustan Woodhouse, AMP – DLC Canadian Mortgage Experts

I met with a client recently who wanted to get a pre-approval before he sold his home. His neighbour is a very grouchy man who causes my client and his family a lot of stress. He just wanted to sell his home and move into a new one away from this situation. I had to tell him no and explain that although he has good credit and a very stable job he does not qualify under the new rules. He was saddened to hear that and is now faced with a decision of should he stay and put up with the situation or should he rent out his home and then he himself rent somewhere else.
(Thank you, sir, for allowing your story to be shared)

What happened to cause this? Late last year the federal government made another round of changes to the mortgage rules. This was after we have already seen many previous rule changes over the last seven years. They dramatically increased the qualification rate with the intention that people be able to handle a higher mortgage payment when rates start to rise. They were also attempting to cool the hot real estate markets in Vancouver and BC. Additionally, they changed which properties can be insured which has meant that people with more than 20% equity in their homes have fewer choices of mortgage lenders and/or higher rates. Since that time, they have also increased the mortgage default insurance premium and tightened up lending guidelines. Before the dust has settled on those changes we have been told that further changes are under consideration.

Here is what we need from you. If you or someone you know have been adversely affected by the mortgage rule changes we need you to speak up. Let’s take our freedom of speech for a spin and let our MP’s know of how specific Canadians are being negatively impacted. TELLYOURMP.CA is the site set up that you can easily visit and share your story. Maybe you were turned down or unable to buy a home large enough or in a safe community for your family. Maybe a job loss or divorce means you are looking to purchase on a single income. Whatever the case, please speak up. Visit this website, write a letter, call your MP.
They are doing their best to keep the Canadian economy as strong as it can be but we are seeing a lot of unintentional negative consequences and good Canadians in ALL of Canada are being adversely affected.
TELLYOURMP.CA It will not take you long and it goes directly to your MP. The mortgage industry and all the banks and mortgage lenders are on record but they need to hear from the actual Canadians this is touching most.

Tell your story and don’t spare the details. Speak now in regards to the fallout from the last round of changes and ask for a cooling period before any further changes are implemented. Ask they consult with the wider financial community for input. We need all of you. Whether you are a first-time home buyer, unable to refinance to the best rates, cannot buy that next home you wanted, saw someone you care about be turned down OR if you are a part of an industry adversely affected. Let’s get noisy Canada!

Courtesy of Pam Pikkert, AMP – DLC Regional Mortgage Group

For many people, a home will be the largest purchase of their life. It stands to reason then, that when you are shopping around for your mortgage you will want to take certain steps to ensure you are getting the sharpest rate and best product. We have a few pointers to make you a savvy shopper when you are out looking at different mortgages—get ready to take a few notes.

1. Do not always rely on the bank for the sharpest rates
Mortgage Brokers can often beat the bank rates by using different lenders. They can also often get you a SHARPER rate at your own bank simply because of the high volume that they do with them. Brokers have access to a number of different lenders giving you more options for not only the best rate, but also the best product for YOU.

2. Know your credit score
Your credit score is a large factor in your mortgage application. You need to know where you stand with your credit BEFORE you begin the process of shopping. All lenders will look at your credit history and score first then they build a file around that. A mortgage broker can obtain your credit score in mere minutes-all you have to do is ask.

3. Make it a one-stop shop
Avoid shopping from institution to institution. You may think that more options lead to better rates, but in fact lenders will frown upon you having your credit score pulled multiple times. This is where the benefits of using a broker come into play. They will pull your score ONE time only and use that to shop around with lenders for you. Really, it’s like having your own personal shopper!

4. Understand that the market will change.
Starting the shopping process knowing that the market you qualify in TODAY will adjust is key. Rates might be low right now, but new rules and implications can change things when you are up for renewal. Understand that you MUST be able to carry your mortgage payment on at a higher rate if new laws are put in place.

Keeping these 4 Savvy Shopper tips in mind when you are shopping for a mortgage can help set you up for success not only today, but for the future as well. Mortgages are not only about finding the best rate-but finding the best product too. A Dominion Lending Centres mortgage specialist can work with you and your unique situation to find you the best product for you—and as an added benefit do the shopping for you!

Courtesy of Geoff Lee, AMP – DLC GLM Mortgage Group