Mortgage Broker in High River, AB
Why use a mortgage broker?
Mortgage brokers work as a liaison and transaction facilitator between the mortgage borrower and the lender. They are not employed by lenders but are paid on a commission basis. A mortgage broker does the hard part of obtaining a mortgage for you: they search for the mortgage product that will best suit your needs along with the best mortgage rate for you based upon your specific situation Brokers have access to both bank-based lending institutions, as well as specific mortgage lenders.
How much is needed for a downpayment?
The minimum required by CMHC(Canada Mortgage and Housing) is 5% of the purchase price of the home. This must be available in cash at the time of your purchase. This can also be gifted as well but the donor will have to provide a gift letter stating it does not require repayment and the money must be available in your account.
Do I need default insurance?
If your downpayment is less than 20% of your purchase price then you will need default insurance. The fees range from 0.60% to 4.5% depending on your downpayment and can be added to the mortgage. CMHC, Genworth and Canada Guaranty are the insurers that lenders deal with.
What is a Preapproved Mortgage?
This is an approval based on the information that you supply to your broker prior to actually buying. It is a tentative agreement that outlines the amount of loan you may be able to be approved for and the term and interest rate. Most preapprovals lock your rate in for 90-120 days which allows you to "shop". Your mortgage must then be approved based on the property, your credit and your ability to service your debt.
What is a fixed rate mortgage?
A fixed rate mortgage guarantees your interest rate and payment over a selected period of time. Fixed rate mortgages can range from 1-10 years.
What is a variable rate mortgage?
Variable rate mortgages are mortgages whose interest rate is based on a lender's prime rate. If interest rates go up more of your payment goes towards interest and if they go down more money goes to paying your mortgage off.
Can I use RRSP's for a downpayment?
Yes under the Home Buyer's program you can use up to $25,000 towards a downpayment. This is then repayable over a 15 year period.