3 Reasons to Use an Independent Mortgage Professional!
Jen & Cory • December 22, 2020
If you need to borrow money to finance any property, working with an independent mortgage professional will save you money, time, and provide you with better options than your bank.
And if that is the only sentence you read in this entire article, you already know all you need to. However, if you’d like to dig a little deeper, here are three reasons why working with an independent mortgage professional is in your best interest.
The best mortgage is the one that costs you the least over the life of your mortgage. An independent mortgage professional will guide you.
All mortgages are NOT created equal. Unfortunately, slick marketing and consumerism have led us to believe that the lowest “sticker price” equals the best value. As it relates to mortgages, we’re led to believe that the lowest rate equals the best mortgage. However, this is entirely wrong.
When considering which mortgage is the best for you, you’ll want to find one that will cost you the least over the total length of the mortgage. There are so many more factors to consider than just rates, such as the initial term, fixed or variable, amortization, or any potential penalty to break the mortgage (should you need to sell the property before the end of your term).
An independent mortgage professional will outline all your options, and help you find the mortgage that best suits your needs. Sometimes taking a mortgage with a bit of a higher rate makes sense if it gives you flexibility down the line to avoid huge payout penalties.
Save time and protect yourself by submitting one mortgage application, and let an independent mortgage professional find the best product for you.
Let’s face it; getting a mortgage can be challenging enough on its own. Everyone’s financial situation is a little different and making sense of lender guidelines is a full-time job in itself. When you work with an independent mortgage professional, you submit a single mortgage application, all your documentation is collected upfront, and one credit report is taken.
Your mortgage professional will then compare your mortgage application and financial situation to various lender guidelines and provide you with the best mortgage options (from their expert opinion). By allowing your mortgage professional to do all the research with multiple lenders, you save time while being provided with more options than you’d have available to you if you did all the work on your own, a win-win situation.
An independent mortgage professional works for you, on your behalf, while a bank specialist works for the bank and has the banks best interest in mind.
It’s no secret that Canadian banks make A LOT of money. It seems every quarter they turn billions of dollars in profit (despite the economic environment). They do this at the expense of their customers by charging as much interest as they can while locking clients into mortgages with fine print that costs them a lot of money down the line if they need to break their mortgage.
Bank employee’s work for the bank, they are paid by the bank to make money for the bank. In contrast, independent mortgage professionals are provincially licenced to work for their clients and are paid a standardized placement or finder’s fee for matching borrowers with lenders.
When you work with a single bank, you only have access to the products of that bank. When you work with an independent mortgage professional, you have access to all of the lenders that mortgage professional works with and all of their products.
If your goal is to find the best mortgage, one that costs you the least over time, you need product options. And independent mortgage professional provides you with this.
If you’d like to discuss mortgage financing, as an independent mortgage professional, we would love to work with you. Contact us anytime.
Recent Posts
The Bank of Canada announced today that it is holding its target for the overnight rate at 2.25%, with the Bank Rate at 2.5% and the deposit rate at 2.20%. This decision comes against a backdrop of significant global uncertainty — and for Canadian homeowners, buyers, and anyone with a mortgage coming up for renewal, here's what it means.
For most Canadians, the down payment is the biggest hurdle to homeownership. A down payment is the initial amount you contribute toward your property purchase, while the lender covers the rest through a mortgage. By law, Canadian lenders can only finance up to 95% of a property’s value, which means you’ll need at least 5% down to qualify. If you’re putting down less than 20%, your mortgage must be insured through one of Canada’s three default insurance providers— CMHC, Sagen (formerly Genworth), or Canada Guaranty . This insurance comes at a cost, but it can be rolled into your mortgage amount. The less you put down, the higher the premium. Since saving a down payment can feel overwhelming, it helps to know the different sources you can draw from. Here are the most common options available to Canadian homebuyers: 1. Savings & Personal Resources The most straightforward source is your own savings. Lenders will ask to see a 90-day history of the funds in your account. Any large deposits outside of regular payroll must be explained with documentation—such as the sale of a vehicle or a transfer from an investment account. This requirement isn’t just red tape; it’s part of Canada’s anti-money laundering rules. 2. Proceeds from the Sale of a Property If you’ve recently sold another home, you can use the proceeds as a down payment on your new purchase. Proof of the sale—such as the final statement of adjustments from your lawyer—will be required. 3. RRSP Home Buyers’ Plan (HBP) First-time buyers can withdraw up to $35,000 each (or $70,000 as a couple) from their RRSPs to put toward a down payment under the federal Home Buyers’ Plan . The funds are withdrawn tax-free, but they must be repaid over a 15-year period. This is a popular option for buyers who have been steadily contributing to their retirement savings. 4. Gifted Down Payment With today’s housing prices, many buyers turn to family for help. A parent or immediate family member can provide a gift that makes up part—or even all—of the required down payment. The lender will require a signed gift letter confirming that the money is a true gift (with no repayment expected) and proof that the funds have been deposited into your account. 5. Borrowed Down Payment In some cases, you may be able to borrow your down payment. This option is usually available only if you have strong credit and sufficient income. The payments on the borrowed funds are factored into your debt service ratios, so affordability is key. Lenders typically use 3% of the outstanding balance when calculating the additional payment. The Bottom Line A down payment doesn’t have to come from just one source—it can be a combination of savings, gifted funds, RRSPs, or other resources. What matters most is being able to show where the money came from and that it meets lender requirements. If you’d like to explore your options or learn how much you might qualify for, it’s never too early to start the conversation. Connect with us today—we’d be happy to help you create a plan and take the first steps toward homeownership.
