Frequently Asked Questions

What is a mortgage Broker?

• A Mortgage Broker is a licenced professional who arranges mortgage loans for consumers.
• Provincially licenced and regulated.
• Code of Ethics through Mortgage Brokers Association of B. C., and Nationally, through the Canadian Institute of Mortgage Brokers & Lenders.
• Outsourcing Agents for Financial Institutions.

Where do Mortgage Brokers source their funds?

• Major Banks.
• Trust Companies.
• Credit Unions.
• Savings and Loan.
• Mortgage Investment Corporations.
• Private Lenders.

Are there any costs in dealing with a Mortgage Broker?
In most cases no fees are payable. The broker is compensated by the Lender for bringing them a qualified client.

In some circumstances a client’s financial background may not entitle him/her to “Bank Financing.” If the broker is unable to finance a request via his referral fee network, the file becomes fee for service.

How does a Mortgage Broker qualify a client?

1. Sets up a telephone or personal interview.
2. Completes a mortgage application.
3. Reviews the 5 qualification criteria – Income, credit, net worth, equity, security.
4. Requests supporting information for lender verification.
5. Confirms client’s expectation of product and process.
6. Type of mortgage required and timeline for other professionals involved.

What are the advantages in dealing with a Mortgage Broker?

• More options.
• Best interest rates – client bypasses the “retail store” and its associated overhead.
• Specialized service.
• Convenience of process: Home, office, telephone, fax or email – save time.
• Full-time tracking of the mortgage market – save money.

Who is an ideal client for a Mortgage Broker?

• Mortgage renewal within 3 months.
• Purchasing a new home.
• Purchasing Investment Property.
• Debt Consolidation (re-finance)
• Mortgage with interest rate 2% higher than current interest rates.
• Real Estate Agent or Financial Consultant.
• Alliance partner for realtor.

What extra costs are involved when buying a Home?

There are additional costs when buying a Home. These may vary depending on location (Province, City.) Your real estate agent, lender, lawyer or broker can help you determine these.

Appraisal fee
The lender will require a professional appraiser to determine the value of the property, ensuring that it is worth the selling price.

GST
GST is paid on the price of a newly constructed home. You may qualify for a GST rebate. Please check with your Realtor to confirm eligibility.

Home inspection fee
You may wish to have a professional inspection of your home to ensure that there are no hidden defects or faults in its construction.

Immediate costs
Items such as utility hook-up charges, cost of appliances, window and floor covering, and any necessary repairs, when (or before) you move in.

Insurance
Lenders want you to protect your home against fire and weather related damage.

Land survey fee
For Single Family Homes the lender will usually require a copy of the land survey. If the seller cannot provide one, you may have to pay to have one done.

Legal fees
These are fees payable to your legal professional to transfer title and to register the mortgage.

Mortgage loan insurance
With less than a 20% down payment (High-ratio mortgages,) lenders will require mortgage loan insurance. The insurance premium may be added to the mortgage loan amount, and could be up to 3.15% for an owner occupied property.

Moving expenses
The cost of a professional moving service, or for the “do-it-yourself-er,” the cost of renting a truck, and perhaps hiring some help.

Provincial tax
This tax applies in B.C. and is 1% of the first $200,000 of the purchase price, and 2% of the balance. This tax may be waived for first time home buyers.

Seller’s pre-payments
The seller may have recently paid Municipal taxes, or utility bills before the closing date. You will be expected to reimburse him or her, for part of these expenses from the time that you become the owner.

Lender or Broker Fees
If you obtain financing on a fee for service basis, fees will be payable to the broker or lender.