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A bank or an independent broker: where should Canadians looking for their first mortgage or those looking to refinance turn? Maybe it’s due to the enormity of the money that they’re hoping someone will lend them, but many people find applying for a mortgage or refinancing to be intimidating and stressful. However, it doesn’t have to be.

Big banks may be the obvious choice, but you have to wonder, when it comes to getting a competitive rate, will the banks be looking out for your best interest, or theirs? Do you want to put your trust in a big bank, or would you rather use the services of a qualified independent brokerage like Canadalend.com?

The choice seems pretty obvious.

Once you have settled on an independent brokerage, your next task is to find an agent. It’s not as easy as it seems. The Internet may be the new yellow pages, but that doesn’t mean you call the first name that pops up in Yahoo! or Google.

When it comes to getting a mortgage, loan, or refinancing, there are a number of qualities you should consider.

Licensed, Personal Attention and Service – Regardless of which province you live in, Canadalend.com agents are licensed professionals. Some so-called bank specialists, on the other hand, are not licensed and have no formal training.

Because you’re potentially borrowing hundreds of thousands of dollars, it’s more than a little reassuring to know that your Canadalend.com agent is current with Canadian mortgage financing rules and regulations.

For those who are not comfortable with negotiating or aren’t fully aware of all the different financial products and services, a Canadalend.com agent’s specialized skills and knowledge can make the entire process stress-free.

As a result, a Canadalend.com agent can help you with all aspects of a mortgage, from how much you can afford to borrow, to determining the best mortgage product, to finding ways for you to save money and pay off your mortgage or loan faster.

A Canadalend.com agent can save you time and energy with their personalized, licensed service. Because they’re independent, they can also offer you flexible hours; banks and credit unions, on the other hand…

Products – There are a lot of different financial products and services out there. For the average Canadian, it’s virtually impossible to keep track of everything, especially if you don’t keep up on the economy, interest rates, and mortgage rules and regulations.

Because Canadalend.com agents are licensed professionals and independent, they can shop multiple Canadian lenders and banks, looking for the best products at the best terms and rates. While a Canadalend.com agent has access to a huge number of Canadian home loan products, a bank or credit union only has access to their own institutional products—and will try to sell you one of their products, even if it doesn’t best suit your needs.

Because Canadalend.com agents are independent, you are assured that they will give you impartial advice.

Peace of Mind – There are a lot of brokerage firms to choose from, but no matter how many agents you talk to, you’ll quickly discover that Canadalend.com’s independent, licensed agents are the best in the field.

Make sure you feel comfortable with the agent you’re doing business with. Can they answer all of your questions, and does she or he act in a professional manner?

Be careful of high-pressure sales tactics; you are not under any obligation to continue on with the process. Never agree to a loan you do not understand. If you’re feeling pressured to buy a product, walk away.

At Canadalend.com, we want to make qualifying for a mortgage as stress-free as possible. Your Canadalend.com agent will negotiate on your behalf, getting you the best mortgage rate possible. They will also help you find the best way to pay off your loan quickly and reduce interest payments.

What do you need to look for in a mortgage broker? If you want a mortgage broker that embodies the principles, integrity, and ethics of his or her craft, then look no further than a Canadalend.com agent.

To learn more about Canadalend.com, visit www.canadalend.com .

In your search for a mortgage, you should meet with several lenders to interview them and discuss the terms and process. During this time, you need to properly gauge the terms they are offering and the advice they are giving to guide you through the process. Not all lenders are created equal and the key is to come ready with the right questions to ask.

Here are three questions every applicant should ask a lender during their first conversation.

How to Decide Between Fixed or Variable Interest Rates?

One of the biggest decisions you will make, outside of choosing a home and making an offer, is what type of interest rate to choose. Your lender must have the market knowledge and a sense of how the banks will act to guide you to the best decision for your situation. There’s no one size fits all.

A fixed interest rate means the rate will stay the same throughout the duration of your mortgage. This is a good option if the rate is low and there are signs that it will spike at some point. A variable rate is volatile and can increase or decrease based on what The Bank of Canada does. Typically, you are signing up for a higher rate with the hope that it will drop at some point, meaning you can put more towards the principle.

Can I Pass the Mortgage Stress Test? 

The stress test has been a popular point of discussion since late 2017.  Every lender you meet with should outline the parameters of the stress test. They should also honestly evaluate whether your application could pass with flying colours. A lender should acknowledge when an applicant could have trouble passing the stress test and then offering advice on how to better their application.                                                                        

What’s the Pre-Approval Process?

Finally, inquire about the steps it takes to be pre-approved for a mortgage. Your first conversation with a lender should give you the tools to prepare the best application, as these things are rarely straightforward. Get a list of everything you will need so that you can create a comprehensive checklist. Be sure to ask if there are any tips that can help you get approved.

Contact us today to put these tips into practice and to get more information about mortgage approvals.

A second mortgage is a way to borrow money by using your first mortgage as collateral. It is a proven and safe way to borrow, and you can potentially access more funds then you could with the average loan. The process tends to involve many of the same details and a similar understanding of a mortgage’s legal framework.

Equity

Equity is the value of a property minus all the debts associated with it. It’s essentially the amount you actually own. In addition, the equity a borrower has in their current property is the most important factor in being approved for a second mortgage.

Your equity can be calculated by following these two easy steps:

• Locate the current market value of your property. Remember, the price you paid might not be the current value.
• Subtract your mortgage balance from that amount.

Your lender essentially wants to know how much you would make if you hypothetically sold the property tomorrow. This number is essentially part of your assets and subtracted from your loan debts.

Property Value

The value of your property is an important factor because it will most likely be used to secure the loan. Since you already have a primary mortgage, there is an additional risk for the lender because they would be second in line to be repaid.

The Approval Process

Getting approved for a second mortgage is like the process you experienced the first time around. You need to meet with a financial institution or lender and fill out an application providing key financial information. Approvals are based on an applicant’s repayment history, overall credit standing and their current home equity.

Starting the Conversation

We recommend sitting down with a lender to discuss the process and to ask any questions you might have. They can also help determine if a second mortgage is the best strategy for your financial needs, or if there’s another option that makes more sense.

Contact us for more information on how to obtain a second mortgage or to set up an appointment where we would be happy to review your situation.

In Canada, over the last few decades, there have been slow but steady changes to industry and employment norms. Where people work, and who they work for, is changing. In the decade leading up to 2017, there was a steady increase in the number of tax returns that included self-employment income. This reporting change was particularly notable for women, who are increasingly taking on sole responsibility for mortgages and property ownership.

While some of the self-employment earnings increase is citizens incorporating a side hustle (crafting, repairs, skills, etc.) into their traditional earnings, it is also indicative of a global trend towards a more liberated model for employment. Working from home is becoming more common as is freelancing and contract work as a sole model of earnings.

While freelancing can sound enticing, working at home, being your own boss, choosing the hours you work, one of the most common hurdles is adapting to fluctuating income, rather than a predictable monthly salary. This can be difficult enough with day-to-day considerations such as food and bills but getting a mortgage can become an uphill struggle.

The Challenges

After the global financial turmoil, the Office of the Superintendent of Financial Institutions implemented and developed the B-20 guidelines, settling on a finalized version in 2017. While the restrictions that were implemented were designed to try to prevent a repetition of the problems that lead to the financial crash, they have also placed the self-employed worker within an undesirable mortgage framework.

Recent predictions of 45% self-employment in Canada have not yet come to pass but are undoubtedly part of the near future. So, as the proportion of citizens that are making some, or all, of their income via self-employment rises, more of them will start to fall afoul of the increased stringency the guideline enforces.

Prior to the B20 guideline, income was part of the approval factor for mortgages, but credit score also played a larger role. Most institutions would give a basic form of approval to anyone with a provable income and a credit rating of 675 or over. Large institutional lenders no longer see entrepreneurs as a sound financial opportunity, Instead, rating them as risky (almost by default) based more on their provable income rather than their credit score. Another factor in self-employed income is the expensing of items against tax which further muddies the perception of an individual’s income.

So, even where an independent worker might be able to prove they have a regular income, perhaps as a result of retainer agreements, they can still be viewed as undesirable borrowers by banks.

How to Prepare

Despite the changes brought in by B-20, there are some steps that the self-employed can undertake to improve their position when approaching a lender regarding a mortgage.

Along with income and credit score, a lender will likely look at your tax status to see if you owe a sum to the taxman. This check usually comes in the form of a review of your standard T1 general tax return and your business and professional activities statement as issued by Revenue Canada. If you do owe taxes, this may be considered as debt you are carrying, so wherever possible make sure you are up to date with your reporting and your payments before starting the loan process.

In order to “win over” a lender, be prepared to provide more information than normal, particularly business-related paperwork such as tax statuses for the business, contracts or agreements that might indicate future earnings, and a variety of other documents at the lender’s discretion. Be prepared by making sure you have as much easy access to your personal and professional financial documents as possible.

Finding a Lender

One of the upsides for self-employed borrowers is the diversity of lenders. Since the millennium, the financial market in Canada has grown and developed beyond the core banking institutions of the last century. A plurality of lenders also means a greater number of products available to borrowers. Products that take into account the financial status of the borrower as well as their aims.

All those products need assessing though, they need to pass your criteria as much as you pass theirs. Will I be protected if my earnings vary? Will I have to make a larger down payment? Will I have a shorter amortization period? Will I pay a higher interest rate?

At Canadalend.com our experts are knowledgeable, helpful and, most importantly, independent. Our experts have decades of knowledge and access to hundreds of lenders and their products. Unlike a mortgage officer at a large financial institution, they are skilled at finding the product that matches your needs, rather than selling you a specific product for a commission. Whether or not that product is right for you.

Contact Canadalend.com today to learn more about how we can help find the right product for you.