Working with Mortgage Professionals – Financial Institution
Canadians have many options when looking for a mortgage, including working directly with a mortgage broker or a financial institution such as a bank or credit union. Each has their advantages and it’s wise to evaluate them and make an informed decision before you begin the search for a new home. By doing the legwork at the beginning, you will avoid the rush and confusion of seeking financing while in the heat of the home buying process.
If you choose to work directly with a financial institution such as a bank for your mortgage, be sure to ask for a mortgage professional that is qualified to help you. You’ll need someone to help you navigate through the variety of products, terms and rates available so you can choose the mortgage that fits your individual needs.
A good plan is to arrange for a pre-approved mortgage, which confirms your ability to secure a mortgage with a lender. If you have a pre-approved mortgage, it not only assures the seller that you are qualified buyer, it also gives you peace of mind and helps you determine how much house you can afford.
Visiting a financial institution, or meeting with a mortgage broker, is a sensible investment of your time before embarking on the house hunting process. Be sure to do your research and carefully consider your financing options. With a pre-approved mortgage, you can confidently move onto the next exciting steps to homeownership.
Working with Mortgage Professionals – Mortgage Brokers
There are numerous mortgage products on the market. Finding the one that’s right for you can be an overwhelming task. So how do you source, assess and determine which mortgage is right for you? That’s where a mortgage broker can help.
A mortgage broker works on your behalf to find you the best mortgage at the best rate. They have no affiliation to any particular bank or financial institution, which means they are free to consider every product on the market before making their recommendation.
Working with your needs in mind, a mortgage broker will shop the marketplace, saving you time and effort. As well, a mortgage broker will already have relationships in place with a wide variety of lenders making it easier to negotiate favourable terms and competitive rates on you behalf.
Your mortgage broker can also help with arranging your property survey, legal fees and closing paperwork while offering advice on any additional costs you may need more clarification on.
Best of all, working with a mortgage broker costs you absolutely nothing. It is the responsibility of the lender to compensate the broker with a fee when your mortgage is placed with them.
By investing a little time now and working with a mortgage broker, you will save time, effort and money on your mortgage in the long run.
Working with Mortgage Professionals – Credit Bureaus
A credit report is a history of how consistently you pay your financial obligations. It is created when you first borrow money or apply for credit and is built over time.
The companies that lend or collect money or issue credit cards (banks, finance companies, credit unions, retailers, etc.) send credit reporting agencies specific and factual information about their financial relationship with you. Details, such as when you opened up your account, timeliness of your payments, and if you have gone over your credit limit, are shown in full.
Although this information is confidential, you have the right to see your credit report and no one else can have access to the information in the report unless you allow it.
There are many ways to order your credit report, such as by phone or fax. The easiest method is by Internet through a credit-reporting agency such as Equifax or TransUnion Canada.
When you receive your credit score, it’s important to make sure that the information in the report is correct. If this score is lower than you want, read the report carefully to find out which factors are most likely having a negative influence on the score, and then work to improve them.
There are a number of things you can do to improve your credit score, including:
-making sure you actually have a credit history by establishing a record of owing money and paying it back (using a credit card is one way to build a credit history)
-always paying your bills on time
-never going over 50% of the credit limit on your credit card
-applying for credit in moderation
For more information or to order your credit report visit www.equifax.ca or www.transunion.ca
Working with Mortgage Professionals – Lawyers/Title Insurance/Property Insurance/Credit Mortgage Life Insurance
In addition to lenders and brokers, there are a few other mortgage professionals who are able to help with your home purchase. Namely, lawyers, property insurers, title insurers and creditor mortgage life insurers. Here’s how they fit into the picture:
Your lawyer (notary in Quebec) reviews the agreement of purchase and sale, ensures all closing documents, including title search and title insurance, have been completed properly, obtains signatures and records documents with the appropriate provincial land transfer office. Your lawyer will usually also act for the lender and collect the money needed to close your purchase and give it to the appropriate parties, as well as ensure that on closing you have a valid and marketable title subject only to the encumbrances you have agreed to.
When purchasing a home it is important to ensure that ownership is properly registered, and no one else holds any claims to the property. Title Insurance protects provides coverage in the event your right of ownership is challenged or if a title defect is disclosed.
Your mortgage lender also will require proof of fire insurance at the time of closing, usually a confirmation letter that coverage is in place and that the mortgage lender is named in the policy.
Creditor Mortgage Life Insurance
This form of insurance pays the outstanding balance of your mortgage in full if you die. This is different from home or property insurance, which insures your home and its contents; and from mortgage default insurance, which guarantees your mortgage by protecting the lender should you be unable to continue your payments for some unforeseen reason
