Bridge loans are temporary loans that bridge the gap between the sales price of a new home and a home buyer’s new mortgage, in the event the buyer’s home has not yet sold. The bridge loan is secured to the buyer’s existing home. The funds from the bridge loan are then used as a down payment on the move-up home. Bridge financing requires extensive preparation. Many borrowers manage to avoid the cost of bridge financing and the extra paperwork by getting their realtors to coordinate the dates of the sale and purchase.
Your lending institution will only advise you on their product. You could visit every institution out there, one by one if you had time… Or, you can talk to a mortgage broker who will shop and negotiate the best mortgage for you with 40+ available lenders including many you would not usually think of on your own. On top of it, a good mortgage broker won’t put your mortgage to sleep for the 5 years. He will proactively look for further solutions that will save you more money on top of the fabulous package he put for you in the first place. The ongoing strategic management of your mortgage file, teamed with using your mortgage as a strong financial tool to address life objectives and secure your future plans, is the real advantage of having a mortgage expert on your side. Our main interest is to take you where you want to be, today and tomorrow, regardless of what life throws at you.
A mortgage consultant has access to more than 40 lenders and 600+ mortgage programs that update on a daily basis. The lenders who work with mortgage brokers include traditional sources, such as chartered banks, credit unions, trust companies, as well as corporate and private pension funds. In addition to these sources, brokers often develop professional relationships with private sources of funds, termed private lenders. These lenders can provide various mortgage products not available from conventional sources. On top of it, being part of Canada’s large network, gives us an access to best deals in the market, because of our accumulated volume.
The service for you is free of charge. Most Financial Institutions pay a commission to the broker for doing all the legwork and credit research for them (the job of a loans officer). Since this service is valuable, a commission is paid by the lending institution to the mortgage broker. In rare circumstances, (challenging credit or highly complicated cases) in which the Lender does not pay the mortgage broker, fees payable may be charged to the client.
In order to get the best rate, terms and conditions, you’ll need to provide us with:
- Employment verification with proof of income
- A good credit rating
- Verification of source for down payment
- Approval for the property to be mortgaged reflecting it’s condition and a good standing with the strata
Yes, some lenders will accept down payment funds that are a gift from first member of the family. A gift letter signed by the donor is usually required to confirm that the funds are a true gift and not a loan. The lender will ask to see the amount going out of the family member’s bank account, and the deposit coming into the borrowers account. In most cases the lender will contact the gift provider to confirm it’s source and the it’s not a loan.
No. You should contact us up to 120 days before your mortgage matures so we can secure you the best rate available at that time. Doing this will protect you from any increases before your renewal date. You will also benefit from decreases should they occur. Most lenders send out their mortgage renewal notices only a month prior to renewal, offering existing clients their posted interest rates, which are usually not the best. We will explore all of your options and find the best solution to suit your needs.
That’s a difficult question……here are the differences:
- Fixed Rate Mortgage The mortgage rate stays the same for the whole term and the mortgage payments are consistent during the term of the mortgage. Advantages; no surprise here. Disadvantages: the much higher penalty limits your flexibility when moving to a different house or upgrading to a better mortgages
- Variable Rate Mortgage The mortgage rate varies with fluctuations in the bank’s prime rate. As a result, mortgage payments may vary during the term of the mortgage. A minimum term commitment is often required (usually 3 years). You may have the option to “lock-in” the mortgage at a fixed rate during the term with no penalty or additional expenses.advantages: much lower than fixed rate offered on the same time. The penalty is much lower and gives maximum flexibility to manage your mortgage and save you money. Disadvantage: fluctuates.
- Closed Term Mortgage:The mortgage contract is typically written for terms of 1 to 10 years. Penalties may be triggered when you sell the house, want to refinance or optimize your mortgage or in the event you won the lottery (!) and wish to end the contract before the term expires (early repayment)
- Open Term Mortgage: The mortgage contract is written for a short term (usually 6 months or 1 year). No penalties are charged if the borrower wishes to end the contract before the term expires. Open term mortgages are usually more expensive due to their flexibility.
The options available for mortgages can be very confusing for most mortgage shoppers. Terms for mortgages vary from 6 month terms to 10 year terms, between variable and fixed rates. Savings can be made by taking a variable/ floating rate mortgage. Typically the shorter the term or guarantee of the rate, the lower the rate will be. The up side of variable rate is the strong potential for interest rate savings. The down side is the fact that you are accepting the interest rate risk without a guarantee. If you are considering a variable rate mortgage you need to look at your own risk tolerance and your cash flow available to deal with potential increased payment. Considering rates and Prime projections (a prediction of where Prime may be heading) can also be an important factor in this decision. We have the software available on our system to compare your options. Give us a call and we’ll do the math