As a licensed Mortgage Broker, I am often asked “what do I need to know when buying my first home?”
Everyone has their own aims and objects when buying their first home. As a Mortgage Broker, I specialize in making sure your financing is in order to facilitate your dreams of owning a home.

Buying your first home is very exciting, but it can easily be overwhelming. Being prepared is the first step. The decision to purchase your first home can be a huge, life-changing event and you need to know exactly what you are getting into.

To get you prepared with the knowledge you need, here are my 7 tips to consider when you buy your first home: (Some of these may only relate to B.C.)

1. Strengthen your credit rating.

It’s pretty simple: the higher your credit score, the lower your mortgage rate will be.

Spend the time now to improve your credit. Check your credit report. Many credit reports have errors, so you need to ensure that your credit bureau is current and correct.

ALWAYS pay every single one of your bills on time. Set up automatic payments if you have had any late payments over the last couple of years.

Stop applying for any new credit a year before you are considering buying and continue until you sign the closing papers on your home. Spend only 30% of credit limits on credit cards.

2. Find a Mortgage Broker and figure out how much you can afford to spend.

The home buyer’s mantra: Get a home that’s financially comfortable.

Contact a Dominion Lending Centres Mortgage Professional. We work with you up to a year in advance to analyze your situation, and tell you how much mortgage and monthly payments you can afford.

Lenders like to see that you spend a maximum:

1. 32-39% of your Gross income on mortgage payments, maintenance fees (if applicable), heat & property taxes
2. 38-44% of your Gross Income on all debts
   Including #1 above PLUS loans, credit cards, additional financing etc.

1 year+ prior to going home shopping, calculate the mortgage payment for the home in your intended price range, along with the increased expenses (such as taxes, insurance and utilities). Then bank the difference between the home payments and what you’re paying now. Not only will that simulate ownership, it also helps you save for your down payment!

When you are ready to start shopping for your home, as your Mortgage Broker, I gather all your financial documentation that the lender requires, in order to figure out much you can afford to spend. Then I work with you to get a pre-approval and lock in a low interest rate to protect you in case rates rise between now and the time you by your new home.

3. How long will you live in your new home?

The transaction costs of buying and selling a house are substantial including: real estate fees, legal fees, Property Transfer Tax, selling in a down market, moving, etc.

If you don’t plan to live in your new home for at least 3-5 years, you may not gain enough equity to make selling worthwhile.

Short-term home ownership can be a pretty expensive proposition. If that is the case, holding off on purchasing could be your best option.

4. How much house you need?

Buying a cheaper, smaller home might sound like a good place to start, but could end up costing you more if you need to move due to changes in your lifestyle, including a growing family. Then again, buying more house than you currently need will cost you more with higher mortgage payments, higher maintenance, energy and tax costs.

Prioritize your housing wish list. They say that the 3 most important things to think about when buying are home are location, location, location. In Greater Vancouver your first choice for location i.e. Kitsilano or Yaletown may not be within your means. You also need to think about how the new home space will be used and whether it will fit your lifestyle now and in the future.

5. Build a savings account.

Start now to build a healthy savings account. To avoid paying CMHC Mortgage Default Insurance you need to prove you have a 20% down payment.

Building your savings account, over and above the money you will require for the down payment and closing costs. Lenders want to see that you’re not living paycheck to paycheck. If you have three to five months’ worth of mortgage payments in your savings, that makes you a much better loan candidate.

6. Remember closing costs.

While you’re saving your down payment, you need to save for closing costs too. They’re typically 1% to 3% of the purchase price and due on the completion date.

In B.C. you need to also pay Property Transfer Tax (PPT). The amount of tax you pay is based on the fair market value of the land and improvements (e.g. buildings) on the date of registration unless you purchase a pre-sold strata unit. The tax is charged at a rate of 1% for the first $200,000 and 2% for the portion of the fair market value that is greater than $200,000. 3% on the portion over $2,000,000 and if the property is residential, a further 2% on the portion greater than $3,000,000

7. Shop for a Realtor that has your best interests in mind.

Interview at least three Realtors. Get referrals from people you trust who have recently bought or sold, including me, your mortgage broker. I work with a lot of realtors, some of whom are outstanding in their field. Once you’ve decided which Realtor is the best fit for you, they can help you focus your search to find your perfect home. There is no cost for the Realtor for the home buyer since the home seller pays the commission.

Besides the 7 tips I’ve listed above, there are many other things you should need to be aware of prior to buying your first home.

Mortgages are complicated… BUT they don’t have to be! Engage an expert!

Written by Kelly Hudson

Nothing weighs heavy on one’s shoulders than owning a home and getting behind on your Canada Revenue taxes. Most banks will not be able to help you refinance your home to pay them off as CRA has first dibs on your house and assets. We have clients owing anywhere from $5,000- $300,000 in back taxes and have threatening letters from CRA that would keep anyone up at night.

There are options and strategies we can assist with financing your CRA debts:

1: We use alternative lenders that charge higher fees/rates for a 1-year term

2: Short term 2nd mortgage to pay off your CRA debts and then refinance back with your lender.

Find out who we can help with a no-obligation application. Let a Dominion Lending Centres mortgage professional get you back on track!

Some CRA notes on penalties for filing late:

The first time you file late you’ll pay:

• a late-filing penalty –5% of the amount of tax you owe, plus 1% for every month that your return is late, for up to 12 months. That adds up to a maximum of 17% of the tax you owe.
• interest – at the prescribed interest rate on the amount you owe, beginning on May 1. You’ll also be charged interest on any late-filing penalties. Interest is compounded daily, not monthly or annually. The prescribed interest rate can change every 3 months.
• If you miss the deadline again, the late-filing penalties are doubled. For example, if the CRA charged you late-filing penalties for any of the 3 previous years, you would pay a penalty of up to 50% made up of 10% of the taxes you owe, plus 2% of the taxes you owe for each full month that your return is late, to a maximum of 20 months.

Written by Kiki Berg

Self-employed individuals are quickly becoming one of the most common clients that we handle. Daily we have successful business owners come into our offices who enjoy the perks of being an entrepreneur. One of these includes fantastic write-offs that allow them to bring their income down to a low tax bracket.

However, this benefit can also mean that the same business owner may have a hard time qualifying for a mortgage all because their income is significantly reduced on paper… how frustrating ‘eh? But these savvy business owners know that there is advanced planning that is involved in being able to qualify for conventional financing. Back in 2015, Statistics Canada reported that there were about 2.7 million people self-employed in Canada… which is an astounding 14% of the total population of Canada! What does that stat mean? Two things:

1. That being self-employed is a more than viable way of earning income in today’s world.
2. That 14% may not fit into the conventional lending “box”

The Conventional Lending Box
To fit into this box, self-employed individuals must meet certain qualifications. For example, they must be able to provide:
>Two most recent years of personal tax returns
>Two most current years Notice of Assessments
>Two most current years financial statements
>Statement of Bank Account Activity
>Investment Income Statement
>Photo ID

Now, the one area that raises a red flag in the above is the tax returns. As we previously mentioned, their income claimed on the return itself might be significantly different than their actual income. Tax deductions related to business often reflect meals, rental spaces, credit card interest etc. The result is that the income the self-employed business owner shows on their tax return is a significantly lower figure than what their actual take home pay is. However, the conventional lending box requires income to justify the mortgage. So how do we pull this off?

The Unconventional Lending Box
Now please keep in mind that “unconventional” in this box just means that as a self-employed individual,  you are going to work with a Mortgage Broker to find an alternative to allow you to show that you can justify the mortgage. There are several well-known and consistently used pieces of advice that we would like to pass along to you:

1. If you are organized and planning (think 2 years out) you can plan to write off fewer expenses in the two years leading up to the property purchase. Yes, you will pay more personal taxes. However, your income will be higher, and it will be easier to qualify you for the mortgage amount you are seeking.
2. Set up your finances through a certified accountant. Many lenders want to see self-employed income submitted through a professional rather than doing it yourself. The truth is that the time you spend doing your own taxes will not be nearly as efficient both financially and time-wise as a professional. Make sure that you discuss with them what your goals are so that they can set up your taxes properly for you!
3. Choose your timing carefully. If you are leaving for an extended holiday within the two years before purchasing, your two-year average income may fluctuate. Plan your vacations and extended trips away with income in mind.
4. Consider using Stated Income. You have the option to state your income. This is based on you being in the same profession for 2+ years before being self-employed. The lender looks at the industry and researches the mean income of someone in that profession and with your experience. You will be required to provide additional documents such as bank statements, showing consistent deposits and other documentation may be asked of you to show your income.
5. Avoid Bankruptcy at all cost…. or if you do declare bankruptcy have all your discharge papers on hand to present to the lender and ensure you have two years of re-established your credit.
6. Mortgage Brokers can state income with lenders at the best discounted rates. But if you do not qualify with A lenders using stated income, then a broker will work with you to utilize a B Lender who are more lenient but may come with higher interest rates and applicable lending and broker fees.
7. Last but not least, if A or B lenders don’t fit, private financing can be looked at as an alternative option in order to get you into the market and offer a short-term solution to improve credit or top up your reporting income. Then you and your broker can refinance into an A or B lender at that time. Just keep in mind that private lending will have a higher rate associated with it , with lender and broker fees added on as well, if you choose to go with this option.

So, to all of our self-employed, hard-working, determined individuals, take heart! You can qualify for the mortgage you want, it just takes a little more planning to get everything in order. Keep in mind to that every lender has different guidelines as to how they view self-employment. Working with a Dominion Lending Centres broker leading up to your property purchase can help you ensure you get the mortgage you want.

Written by Geoff Lee

Mortgages are like vehicles. A bank is similar to the brand, Ford or Toyota for example. How long you have a mortgage before it’s time to renew is like the model, a Fusion or Camry. The rate is similar to the car’s paint color, and the mortgage benefits such as prepayment privileges and portability are like the car’s benefits; 4-wheel drive, hatchback, four doors instead of two, etc.

A bank is like a sales person at a Ford or Toyota dealership. He or she is an expert, they know everything about every car on their lot; engine size, warranty, all available colours, and their fuel ratings. He or she can match any car to your needs and lifestyle, as long as it’s sold at their lot.

But what if they don’t have the most fuel efficient car? What if you don’t like the design or you need four doors and a trunk and all they have is two doors and a hatchback? Are you still going to buy from that dealership just because you went there first? No, you’re going down the street to check out the Chevrolet, maybe even BMW, Mazda, or the new Chrysler dealership. That sales person doesn’t want you to go buy from another lot down the street, but you are buying to satisfy your needs, not the dealership’s needs of selling their own cars.

Now imagine a dealership that sold every single make and model of vehicle. Imagine you could choose one of their sales people, and have them work only for you. They know just as much or even more about every make and model, they do all the research for you and tell you what you need to look for, they ask you the important questions; they have your best interest. That is a mortgage broker, your own personal expert.

Now, you may not need a personal expert to buy a car. But what about mortgages? Is a 0.10% lower interest rate a lot? Or will a 20% prepayment privilege instead of 10% be more advantageous? Can you switch lenders and move your mortgage? $15,000 or $5,000 penalty? How is it calculated? Fixed or variable? Is a collateral charge good or bad? 2-year term or 5-year? Big bank or monoline lender? How about credit unions? The list goes on.

So, a bank or mortgage broker? Put it this way; would you buy from the first dealership you visit or hire an expert? If you have any questions, contact a Dominion Lending Centres mortgage professional near you.

Written by Ryan Oake

So you just got a shiny new car, and now you want a shiny new home to go with it. Will that new car payment affect your mortgage pre- approval? The short answer… absolutely it will.
Recently, I have encountered many people looking to pre-approve for a home purchase that do not qualify. While it may be in part because of the mortgage “Stress Test” rules, a good portion is due to large debt obligations such as car loans. I have witnessed applicants that have brand new car loans/leases with huge payments and not one gave thought as to whether it would affect their ability to qualify for a mortgage.
Unless you have already done your home work with your mortgage broker by getting a mortgage pre-approval that factors the new car payment into it and your budget, you may be in for disappointment.
However, it doesn’t necessarily have to be one or the other. Here are some tips to get set for mortgage approval success.

1. Get pre-approved. Seek the guidance of your mortgage broker to know exactly what you qualify for before you start the house hunting process. Knowing what your maximum purchase price is, helps you and your realtor.
2. Be realistic with what you can afford. Start by looking at what you pay in rent now. That’s a good starting place to figure out what you can pay on a mortgage. However, you also must consider what you can get approved for.
3. Remember to save and budget for more than the mortgage payment. When you own a home, your monthly payment consists of more than just the mortgage payment. You will also pay property taxes, home owner insurance, and utilities on top of your other monthly debt obligations. Having emergency savings can help alleviate the stress of taking on the financial responsibility of a owning a home.
4. Clean up your credit. Paying off credit balances can not only help improve your credit score, it can also increase your buying power.
5. Avoid making big financial changes. This is the big one. Most lenders want to see that you’re a stable applicant. Doing things like buying a new car before you buy a new house does not establish you as stable. Similarly, opening new credit cards, or making a drastic change to your employment can also be detrimental to getting approved for a mortgage.

When in doubt always seek the advice of your Dominion Lending Centres mortgage professional.

Written by Lynn Nequest

Dominion Lending Centres’ leading lady in the new national commercial campaign has a few questions of her own. As a young Canadian looking to get into the housing market, Laura Steponchev has a candid Q&A with one of our pro’s.

You could say Laura Steponchev is a pretty typical Canadian millennial. The aspiring actress moved to Toronto from Regina five years ago to pursue her career. And over the years, she’s moved around quite a bit. Steponchev lived on her own for a while, and loved it, but paying the bills was tough and she needed to be more reasonable. She got a roommate, but he moved in with his fiancé, and she moved out of that condo and into an old house in Greektown with four other roommates. She eventually met her boyfriend, and they soon moved in together. The couple decided they wanted a place of their own, so they moved into his parents’ house in the ‘burbs.
“Living with your partner comes with its own troubles, but living together with your inlaws – that’s a whole new ballgame,” she said.
Steponchev wants to get into the market, but she’s got a lot of questions.

Our House Magazine teamed up with Dominion Lending Centres mortgage broker to answer some of those questions and help Steponchev on the path to homeownership.

Q. I understand that first-time homebuyers are granted a five-per-cent down payment – I am not a first-time buyer any more. What am I looking to save for a down payment now?
A. First-time homebuyers are not the only ones who can purchase a home with as little as five per cent down. As long as the home you are purchasing will be your residence, you can still put only five percent down. But all lenders and mortgage insurers (CMHC, Genworth and Canada Guaranty) will want you to have an additional 1.5 per cent of the purchase price to ensure you can cover closing costs such as legal fees, Property Transfer Tax, Land Title registration etc.

Q. What’s the minimum down payment you would recommend to have before looking?
A. As long as you have the minimum five per cent down and 1.5 per cent of the purchase price for closing costs, that’s all a lender and mortgage insurer will want you to have. However, I recommend having a bit more as a buffer against unexpected costs. Remember, with a move there are utility hook-up costs, moving costs, home inspection and so on. Having an additional $5,000 above your down payment and lender-required 1.5 per cent will help make it a smoother move.

Q. What kinds of interest rates are we looking at?
A. Rates will vary day-to-day, but we are still at almost historical lows right now, and they are on the rise. Rates are offered and guaranteed for a period of time called a term. Terms can vary from one to 10 years with some lenders and are priced according to each individual lender’s pricing structure.
The most popular are five-year fixed and five-year variable. Where right now we see five-year fixed rates as low as 3.04 per cent and five-year variable rates as low as 2.36 per cent for qualified applicants, be aware that it is not all about rate. Some of the more appealing lower rate offerings come with additional terms that may not work for you, such as higher penalty structures or bona fide sale clauses that could have you stuck if you want or need to pay out your mortgage mid term.
As always, it is advisable to speak with an experienced mortgage broker to find out more about the terms of any rate offering to make sure you know all the implications that could apply to your situation.

Q. Realistically, what should our budget be?
A. Conservatively, the government has said that 35 per cent of your combined annual gross income should be enough to cover property expenses (mortgage payment, property taxes, condo fees, heating costs), and 42 per cent of your gross annual income needs to be enough to cover the property expenses plus any other credit payments (loans, credit cards, lines of credit).
In reality, every person’s situation is different, so, before you decide to take the leap into home ownership, it is a good exercise to detail your current budget to get a starting point for what supports a comfortable lifestyle. Be sure to include a savings plan into that monthly budget, not only for retirement but you will likely have maintenance costs with your new home or you may want to do some updating.
Now replace your rent payment with property costs (detailed above) and see how your monthly cash flow will be. Is it comfortable, or would you be pinched? Ultimately, it is no fun to be house rich and cash poor, so, if you would feel pinched, it might be an idea to downsize your purchase price to a more realistic level.

Q. In this economy and as a millennial, we’re told that owning a home is a very distant reality (especially due to that darned avocado toast).
Are our dreams of owning our own place just that – dreams?
A. Not at all! In my experience, millennials are very determined when they set their sights on a goal and really just need enough information to formulate a realistic plan. If a home purchase is in your future, my recommendation is to get in touch with a mortgage broker and start building that plan – sooner rather than later.
You may already be qualified and just don’t know it, or there may be tips and tricks you are unaware of that could bring that dream closer sooner. Or it may be that it could take you a year or two to get into a really strong position to enter the market. You just won’t know until you try.
I can tell you personally, it is a very satisfying professional experience when I work with clients from dream to reality, not matter how long it takes. It’s an exciting experience every time!

Written by Jeremy Deutsch

With almost 50% of homeowners ready to retire and wishing to stay in their home and 30% of those people with most of their money tied up in home equity, the downsizing dilemma is real. Can they afford to stay in their home or is downsizing the better option.

In the past, retired couples or a widow would keep their clear title home and use pension and investment income to live. They would only sell the family home and move into a retirement home when health issues forced the move or upon death of both people. Times have changed.

People are living longer and want to stay in their home. The cost of living has risen and, due to higher home values, the amount of equity in that home is greater than ever. Many home owners are being stretched with their budget and their retirement income is insufficient to maintain their lifestyle.

We have found that many retired people are unable to meet their budget each month and are using a line of credit and/or credit cards. This becomes a vicious cycle and the cost of interest pushes them to the wall and they reach their maximum limits. Then they are forced to sell their home or reduce their lifestyle to manage. Often family members are unaware till it becomes a serious matter. Planning ahead is essential to avoid this situation and lower stress levels for all family members including the aging parent.

In a recent Globe and Mail article, Scott Hannah of the Credit Counselling Society talks about the risks.

Some homeowners now recognize the need to look to their home as a source of income from home equity financing.

There are a growing number of programs designed specifically for homeowners over the age of 55. Each comes with different requirements, advantages and benefits. It is important for retiring or retired people to talk with their family and then in a group with their independent Dominion Lending Centres mortgage broker and financial planner.

For some family members, the next step is for the aging parent to downsize to a new home. For some, it is to stay in the family home and set up an equity plan to maintain a safe place and comfortable lifestyle. Consideration must be made for current income, current budget and future needs.

Written by Pauline Tonkin

As the market shifts, developers will increase their incentives to buyers with cash back and decorating allowances on new build or pre-sale purchases. It is very important to review those options with your real estate agent representative and vital to consult with your Dominion Lending Centres mortgage broker. Although these offers may seem attractive, they can impact your financing and could cost you thousands of dollars.

Before you write a contract on a new build or pre-sale, ensure you have set up your team including a real estate agent and mortgage broker. Always consult with them to ensure you have sound advice. Do not rely solely on the developer’s sales representative.

What happens when you sign a contract on a pre-sale?

When you visit the sales centre for the pre-sale and decide to write a contract you have a rescission period where you can back out of the purchase. The contract you sign is drafted by the sales centre and once you remove any conditions, you are locked into the purchase. Therefore it is essential you have your real estate agent with you at the time of signing or at a minimum, they review the contract. It is in your best interest you fully understand the terms, the disclosure statement, what you are buying, schedule to build, GST, deposit schedule and any incentives.

Once you remove any conditions, the deposit is paid to the developer and a schedule set for all other deposits till the building is complete. Those total deposits are typically 20% of the purchase price. That is money you will not receive back if for any reason you are unable to proceed with the purchase. Some contracts allow assignment to another buyer, but those must be approved by the developer and may come with restrictions. Your realtor can guide you on these matters.

How Will Cash Back or Decorating Allowances Impact Your Purchase?

When the market slows, developers will use incentives such as cash back and decorating allowances on new build or pre-sale purchases as a strategy to increase sales. Regardless if this is a cash back or a rebate for decorating, it will have an impact on the purchase price for the lender on the financing. This is a common misconception among buyers and even realtors who do not understand the process from a financing perspective.

For example: A purchase price plus GST is $800,000. The developer is offering a $20,000 decorating allowance. The lender will automatically deduct the $20,000 from the purchase price. Your new purchase price will be $780,000 for financing purposes. This does not change the actual purchase price. You still have to pay the developer $800,000 for the home. The lender will lend on the $780,000 only. Therefore you must pay in cash at the time of funding the $20,000 difference.

The developer has sold you the idea you are receiving decorating upgrades of $20,000. You are receiving the value of that allowance BUT make no mistake you are paying for it.

If the incentive is a cash back amount in the above example, you will receive the cash back from the developer at the time of completion. However, the lender will still only offer financing on the lower value minus the cash back amount.

Written by Pauline Tonkin

For a first-time home buyer, the types of insurance surrounding a mortgage can be confusing, so it’s important to know what insurance covers what.

There are 3 main types of insurance to know about when buying a home.

Mortgage Default Insurance – If you put less than 20% down on a home you are buying, Government rules are you must pay for Mortgage Default Insurance which covers the lender should you default on your mortgage payments.

There are three mortgage default insurers in Canada – Canadian Mortgage & Housing Corp. (CMHC), Genworth or Canada Guaranty) The purchase of this insurance solely benefits the bank/lender.

Mortgage Insurance and/or Life Insurance

You’ve just made the biggest purchase of your life: a new home for you and your family.
• What’s the best way to protect your investment if you die?

Insurance is the answer. But what kind: mortgage insurance or life insurance?

There are important differences between the two that we’ll examine.

Please note: Mortgage/Life Insurance is not mandatory to qualify for a mortgage.

You have made the biggest purchase of your life… how do you protect yourself and your family? Many people say they have life insurance through their work, but is it enough?
• The question you should be asking is – do you currently have enough life insurance in place right now, equal to your mortgage amount?

Top Benefits of purchasing Mortgage/Life Insurance

1. Peace of Mind – creates a sense of security that your loved ones will be taken care of if you pass on.
2. Mortgage Can be Paid Off – whereby any other policies that are held will be able to assist with other needs.
3. Family can Stay in their Home – if there is the unfortunate life event that is the death of the Mortgage/Life Insurance policy holder, the mortgage can be paid off which will allow the family to stay in their home and not become displaced, causing additional anguish.
4. The Younger you are, the Less Expensive – Which means that insurance is extremely affordable for a young, and likely, first time home buyer.
5. Good Health = Coverage for Unexpected Illness Later on – After illness strikes, it is more difficult to acquire life insurance.

Mortgage/Life Insurance is an option that anyone with a mortgage should consider. Ask me about a referral for reputable and credible insurance.

While we’re discussing insurance, there are other types of insurance you need to consider as well…
• Fire insurance – most lenders will want to see that you have fire insurance in place, prior to funding your mortgage to “protect” their investment.

Additional insurance options:
• Disability insurance
• Personal content insurance

Mortgages are complicated… BUT they don’t have to be! You need to protect your investment by engaging an expert.

Contact a Dominion Lending Centres mortgage professional to discuss a mortgage that works for you (not the bank)!

Written by Kelly Hudson

Are you on the hunt for a mortgage broker? Or you need a mortgage broker but just don’t know it yet! Either way, this article is for you!

First up, where do you find a Mortgage Broker?

The easiest (and one of the best places to start) is with referrals from a realtor, family, friends, or co-workers. But this is just the start! There are thousands of independent mortgage brokers out there for you to partner with. So, what should you look for? That’s part 2.

What to look for in a Mortgage Broker?

When you are looking for a mortgage broker AND looking to buy a home that can lead to a very stressful time in your life. To make it easy, here are a few things that a broker should be doing for you:

1. Rates Don’t Tell the Whole Story. Getting a mortgage, refinancing your home or consolidating debts should not be seen as a quick and effortless task. There are brokers that make borrowing all about the rate; and that is just not the case. Be wary about Brokers who guarantee you a mortgage without asking for any documentation. Over the years personal lending has changed and continues to. With stricter than ever documentation requirements, lending policies and tougher credit checks, it’s important to be working with a broker who is educated. It is also important to work with a broker who asks to see the FULL picture. That means a little more work on your end to get all the proper documentation, but it can make a world of difference when it comes to selecting the right mortgage product for you.

2. Experience Really Matters. Maybe you have bad credit—or a larger car loan—or maybe you are self-employed. Whatever your unique situation is, you want to work with a broker who knows how to help you navigate through it to get you the best mortgage product. Yes, someone who is new to the world of home and personal finance may be smart, fully versed in policy and products and able to offer a great rate, but that doesn’t necessarily mean they are prepared to handle your situation. Try to find someone who has worked on a wide variety of deals in a wide variety of situations. A few questions to ask:
Have they had to work through someone’s debt in order to make a deal viable?
Do they know what to do when a deal doesn’t go as planned? Are they experienced in handling your unique situation? (ex. Working with someone who is self-employed, etc.)

3. Think Big Picture. There are many different pieces to your personal finance picture. From credit cards to student loans, they all fit together to create a picture that is unique to you and only you. With that in mind, a good mortgage broker should take time to find out about your goals—both long term and short term. They should ask you if:

• This is a starter home or long-term home?
• Are you planning on expanding your family (ex. having kids soon)?
• Do you have kids who are heading off to university and may have tuition payments to make soon?
• Do you have a parent who may need long-term care in the future?

All of these things can directly impact your finances, and in turn give direction to the mortgage broker on what you will need in a mortgage product. Asking these questions and others gives the mortgage broker a broad financial picture which gives them the perspective and knowledge to make an informed recommendation.

4. More than a Number. It’s no secret—mortgage brokers often will have sales/volume goals that they want to meet to take advantage of incentives. However, a good broker will set you up with the right product, rate, term and conditions that work for YOU…not them. They should be able to see past their own targets and goals and work with you to not only reach your goals but surpass them.

A satisfied, happy customer can turn into a life-long customer (and they bring friends and family with them too!) This is what a good mortgage broker should be able to see and portray to you. You should never feel rushed or like you are “just another number”. If your mortgage broker is focused on only one product or simply puts you into a 5-year rate without asking about your goals, it may be time to ask some questions.. You should never be given a mortgage without full explanation, details, and understanding of why that product is right for you.

5. Save Time—don’t shop. Over the past few years the idea that you can “shop” your mortgage around to different brokers to get a better rate has been made quite popular. The reality? 95% of the time every broker will end up offering the same rate for the same product. That’s not to say that there are not special rate offers out there—but they do typically have a specific requirement such as quick closings, shorter amortizations, higher down payments, limited repayment options, and smaller lenders. These are sometimes used, but for the vast majority of the population do not fit their needs. A general rule of thumb is that if a mortgage offer appears too good to be true, then it is.

A Final Note

With all that said, we find that borrowers who:

• take the time to seek out an experienced broker
• give an in-depth picture of their financial goals to their broker
• look for a broker who has a background in handling cases similar to theirs
• keep themselves financially in a good situation through debt repayment and budgeting
• avoid “shopping” for rates

Are the ones who breeze through the mortgage process. It’s important to look at your mortgage as not just a singular deal all on its own; it’s a part of a much larger picture. A mortgage should allow for you to live your life comfortably but realistically—making sure that other needs and obligations (vacations, healthcare, emergency savings, education, etc) are all considered and balanced with their mortgage/loan requirements. Finding a broker who understands what BALANCE looks like is the key to making the home-buying process as simple as possible. If you have any questions, contact a Dominion Lending Centres mortgage broker near you.

Written by Geoff Lee