A leader in Saskatchewan mortgage solutions, Verico Crown Mortgage Services has been connecting current and aspiring homeowners with lending options since 1999. Find answers to some of the most frequently asked questions about the mortgage products and services we offer in Regina and surrounding areas:
Q: Why Deal With a Mortgage Broker?
A: Mortgage brokers work for you. They are not employees of lending institutions. Brokers have unlimited access to many products and will seek out the best lender package available, whether it's with an insurance or trust company, a chartered bank, or private lender.
Understanding that the mortgage process can be a complicated and time-consuming effort for many Canadians, our mortgage brokers search for the best combination of pricing, interest rates, discounts, conditions, and overall value to you, the borrower. Choosing a trained professional will not only net you the best mortgage to suit your needs, but can also save you thousands of dollars.
The broker's value is the expertise and knowledge that he or she possesses in mortgage-based financing, as well as the intimate understanding of each lender's preferred type of lending. These are the factors that often determine whether your mortgage is approved or not, and if you can obtain the most competitive rates.
Q: Can I Use Money Gifted to Me for a Down-Payment?
A: Yes, most lenders will accept a gifted down-payment from an immediate family member, such as a mother, father, brother, sister, or grandparent. A signed gift letter is required from the donor(s), which confirms that the gift is a non-repayable loan.
Q: Do I Need to Switch My Banking Over to the Lender Chosen for My Mortgage?
No, you can maintain your existing bank account and will only need to provide a voided cheque for the mortgage lender to set up an automatic withdrawal for your mortgage payment.
Q: What Can I Use for a Down-Payment?
A: Accumulated savings, money from the sale of an existing property (equity), and gifts from immediate family members can be used as down-payments. Additionally, borrowers can use RRSP investments up to a maximum of $25,000. This amount is not subject to income tax if repaid within a specific time period.
Q: How Much Can I Qualify for?
A: The maximum amount that you can qualify for may vary from lender to lender, based on their criteria and available products. Please contact us now so we can help you to find the best options for your situation.
Q: How Can a Mortgage Broker Get a Better Rate Than My Own Bank?
A: The mortgage broker has direct access to lenders whose only service is lending money. Most of these lenders don't have local offices in every city or town, and they don't have the large overhead expenses that banks do. This fact, combined with the large volume of clients that brokers handle, allows them to be more competitive and offer lower interest rates than your bank.
Your mortgage broker stays current with the daily fluctuating interest rates that differ from one institution to the next, as well as preferences for various types of mortgage lending. The broker knows which lender to approach first with your application and can ensure you get the best rates. In fact, many institutions will only accept mortgage submissions directly from brokers.
Q: When Should I Obtain a Pre-Approval?
A: If you’re planning on buying in the near future, you should obtain a pre-approval for the maximum qualification in order to secure a guaranteed rate. The guaranteed rate is usually valid for 45 to 120 days, depending on the lender. The pre-approval is subject to verification of the information provided in your application, such as employment details and confirmation of a down-payment. Also, some real estate agents will not show you prospective homes until they know you are pre-approved.
Q: What Is the Minimum Down-Payment Required to Purchase a Home?
Generally, the minimum down-payment required is 5 percent of the purchase price of the home. Changes to the rule now allow the down-payment to be borrowed, as long as it is debt serviced. Otherwise, buyers must possess this minimum as either available cash or as a gift from an immediate family member. There are products available that allow for 100 percent financing, but the lenders who permit this practice are limited.
Q: If I Have Declared Bankruptcy or Have an Orderly Payment of Debt, Can I Still Qualify for a Mortgage?
You may still qualify for a mortgage after bankruptcy, depending on your individual circumstances and most recent credit history. Consulting with your mortgage broker is the best option for determining eligibility and finding the best product available to you.
Q: What Is Required to Obtain a First Mortgage?
A: Generally, borrowers must present with full-time employment/proof of income, good credit ratings, verifiable down-payments, and approval of their applications by the lender/mortgage insurer.
Q: What Costs Are Involved in Obtaining a Mortgage?
A: Costs can include, but are not limited to, property inspection, legal costs, title transfer, fire insurance, appraisal, certificate, and title insurance.
Q: What Is Mortgage Insurance?
A: Mortgage insurance allows homebuyers to make a down-payment of less than 20 percent of the purchase price of a home. Adding a premium for this insurance to your mortgage insures it on behalf of the lender. There are three mortgage insurers in Canada: CMHC, Genworth and Canada Guaranty.
Q: What Are the Costs to Dealing With a Mortgage Broker?
A: The mortgage broker is paid a fee by the lender, not by you. This amount is based on your mortgage loan and the term you have chosen.