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Beginning the hunt for a new home can be both stressful and overwhelming. Do you look first and then seek a pre-approval, hoping the dream home you stumbled upon will wait for you? Do you try to find a lender first and then explore open houses and enticing listings, not sure of how much you need to spend before you apply for a loan?

In any case, when it comes to finding the right mortgage, it can be helpful to speak with a professional mortgage broker. For starters, they are privy to information from a variety of lenders and will conduct research based on the information their clients provide to find their best match for a loan. It is their job to explore the market so mortgagees don’t have to.

Obtaining a Mortgage

Their role is to be the eyes and ears when it comes to obtaining a mortgage, investigating options on behalf of their clients, then compiling and presenting them—perhaps with recommendations on which one to pursue. This is especially important for new homebuyers, but a useful tool for anyone who needs to secure a mortgage.

How are they Paid?

Mortgage brokers are usually paid by the lenders or they charge their own broker fee. Further, mortgage brokers offer expert insight into the industry to help people save money. They stay abreast of the real estate market, regularly exploring trends and offerings. Consider them a wealth of knowledge about real estate and mortgages for you to tap into.

The Matchmaker you Need

Simply put, mortgage brokers connect their clients to mortgage lenders who can fulfill their individual needs at the lowest rate possible. They are an effective strategy to find the most suitable mortgage lender. Essentially, mortgage brokers play matchmaker for people seeking the best rates and long-term loans.

When searching for a home, there are a lot of complex and unforeseen circumstances to look out for. Enlisting the help of a dedicated professional to offer assistance can help ease some of that inevitable stress.

Contact us for more information about our approach to lending and to learn more about the benefits of working with our experienced team.

When your finances do not measure up to the standard requirements of being pre-approved for a mortgage, some people may not know where to turn. Acquiring bad credit can be detrimental to various aspects of your life, but especially when striving to obtain a home equity loan.

Although individuals with bad credit may not qualify to go the traditional route with a large bank, there are mortgage brokers, financial institutions and private lenders who work with people in these specific circumstances. They offer enhanced flexibility and freedom, in fact.

It is recommended to check your credit score before seeking a mortgage or home equity loan if you are worried that yours may be low; this can be done free of charge in Canada through TransUnion and Equifax, as well as some newer service companies like Mogo Mortgage and Borrowell. Someone with bad credit typically has a credit score below 600 out of a possible 900 (the lowest is 300).

While technically considered average, a score between 600 and 700 can be eligible for a bad credit mortgage if an individual has solid income sources—which is more difficult for those who work on commission or work for themselves, but still possible to determine a projection of how much you will make based on your averages.

A reputable lender can provide a bad credit mortgage or home equity loan despite their client having a lower credit score. However, it is equally important for that individual not to look far beyond one’s means for a home to avoid being unable to make mortgage or home equity loan payments moving forward.

Someone with bad credit must have solid approval of their property to assure it is in average to good condition. Although individuals can still obtain a bad credit mortgage, they may be sanctioned with greater interest rates and extra fees from lenders and mortgage brokers as a result. Whether good or bad, a person’s credit is considered a direct reflection of how risky they are considered to loan money to.

Before applying for a second mortgage, there are different factors you should consider to understand the amount of funds that could be made available. Many individuals do not receive a clear explanation as to how the amounts they are able to borrow are actually calculated. Here is some insight into those figures.

Home Equity

First, the equity of your home plays an important role in their determination. This translates to the variance between its value and what you still owe. It goes without saying, but the smaller the amount you have left to pay on your primary mortgage and the greater the value your home is, the better.

Mortgage Terms

Second, the length of the mortgage term you choose will influence the amount you will be required to pay your lender each month. A longer term is often more manageable because that means smaller payments, but it will take significantly more time to pay off; if you choose to move beforehand, your equity will be less than if you paid higher monthly amounts.

Lender Fees

Mortgage lenders often charge their clients a lending fee, loan origination fees, appraisal costs, as well as a fee to reduce the loan’s interest rate. Since these amounts can all vary from lender to lender, it is important to check with at least a few different institutions to ensure you obtain the best rates and lowest fees. No matter what you decide, experts suggest also getting the amount in writing.

Rates

Like with a primary mortgage, your rate will remain the same throughout the term of your mortgage if you choose a fixed rate. A variable rate will change based on the market and can either work to a borrower’s benefit or detriment. While the fixed rate may seem more secure, you may be able to save significantly if rates decline.

It may be particularly helpful to speak with a financial advisor who can offer some insight based on industry projections. Contact us to learn more about second mortgages and how to determine the amount you may be able to borrow from lenders.

There are many steps involved in buying a home, not the least of which is securing a mortgage. While this is standard for most people as they seek to buy their first home or move to another home, some owners might need to apply for a second mortgage. That means, in most cases, that they want to take out a mortgage on top of the primary mortgage to pay off debts or make a large investment, which can include post-secondary education or starting a new business.

Why Apply for a Second Mortgage?

A second mortgage is also commonly known as a home equity loan. It may seem helpful to have this option to manage complex financial matters, but it is important to not enter this arrangement lightly. For some, despite taking on more debt, it can actually help improve your credit score if you use the money for debt consolidation.

Getting Approved

It may not always be possible to get approval from a financial institution in the first place. The interest rate is usually higher and there are often penalties for defaulting, so experts recommend comparison shopping both of these factors. Still, interest rates on second mortgages are usually lower than credit cards.

Be Prepared for Fees

Each financial institutions or lenders will charge different closing costs and fees. As a result, find out in advance what these parameters are so you can create a repayment plan. Qualifications for a second mortgage are first determined by the value of your home and its equity. Income and credit history are important, but not major factors like they are with most other loan applications—including a primary mortgage.

Value for Borrowers

There is greater freedom with a second mortgage compared to other loans. In fact, borrowers can often negotiate the terms and as much as 85% of your property’s value can factor into the amount you can receive. However, not everyone will provide this option as it is riskier for the lenders. That is because, if you happened to default on your loan payments, your primary mortgage lender would be paid before your second mortgage lender.

If you are considering a second mortgage application, contact us to help you ensure it is the right move.