Mortgage Brokers
Why should you use a mortgage broker? A mortgage broker can save you money by arranging your mortgage. They can do this by getting you a better rate than you could negotiate and by getting you the right mortgage product for your needs. Most people simply go into their local branch of their bank when seeking mortgage financing. The mortgage manager sets up the mortgage. The problem with this method is that you only have that lenders rates and product lines to choose from. Mortgage savings can be attained through getting a better rate and choosing the right product with the most flexible payment options, prepayment options and terms.
A mortgage broker is a licensed professional whose job is to understand the entire mortgage marketplace. They can make you aware of products that you did not even know exist. Their experience can help you find the mortgage that best suits your needs. A mortgage broker does not represent any one lender, they are independent- they work for YOU.
How much does a mortgage broker charge for their service?
In most cases nothing. Mortgage brokers receive a finders fee from the lending institution for providing the lender with clients. More and more lending institutions are dealing with mortgage brokers in attempts to gain a larger market share and develop economies of scale.
Real Estate Professionals
A real estate salesperson is a licensed professional that is trained to advise you of all aspects of purchasing a home. First, they will help you narrow down which types of properties are most suitable for you and give you a list of available properties. Then they will assist you with the offer and counter-offer process of an Agreement of Purchase and Sale between you and the vendor.
Real Estate Lawyers
You will need to find a lawyer to draw up the mortgage documents and transfer title from the vendor to yourself. Any lawyer can handle the transaction for you but it is best to choose a lawyer who specializes in real estate transactions, so that you can be ensured of receiving the most up to date advice. The lawyer will go over the mortgage document thoroughly with you and ensure that the terms are as you requested. The lawyer will do a title search to ensure there are no extra charges against the property, such as unpaid utilities and taxes, review the city's building and zoning requirements and do a survey to ensure that the subject property does not have any encroachments on the property line.
On your closing date your lawyer will go to land titles to register the mortgage with land titles and remove any charges from the vendor and transfer the title into your name. You will usually get the keys to your new home the next day or so, this is called "possession".
Home Inspectors
When you make an offer to purchase it is advisable to get an inspection of the building in order to determine if the property is in sound condition. The inspector will go over any repairs that need to be made and provide you with an estimate of the cost for these repairs. You will receive a detailed written report of the inspection, the cost for this inspection is generally $300-350. This will probably be the best $300 spent as it can save you thousands of dollars in the long run.
Appraisers
Because the Bank Act only allows banks and trust companies lend 80% of value without CMHC insurance, your mortgage lender will require that an appraisal be completed to assess the market value of your purchase. This way the Bank can confirm that they met the Bank Act guidelines. The appraiser will look at the recent sales in the area where the property is located to arrive at an average price. Unless you order the appraisal yourself it becomes the property of the lending institution and you are still responsible to pay the fee (unless it is covered under the lender's application fee) which is between $250-$400 depending on the property and the location.
Insurance Professionals
As a home owner, your property and life insurance needs will change. An Insurance Broker can evaluate your financial situation to determine the amount of life insurance that you require. It is mandatory that you insure your home against fire when you have a mortgage, so that should you have a fire, the home may be replaced.
Each lending institution can offer you mortgage life insurance but it is advisable that you consult an insurance broker to get a quote, you can save yourself a lot of money. In addition, lenders sell insurance with a declining balance, you are better off to buy separate term insurance.
Title Insurance Companies
To ensure that a lender has a clear and valid title to the property being mortgaged, you can now go to a lawyer who will insure that the property is owned by the vendor and that title will be delivered cleared of all charges. This service can also omit the requirement of a survey certificate (which can cost up to $350.00) at a reduced price of approximately $200.00. Not every lender will use the Title Insurance Program so ask your mortgage broker whether or not it is possible in your case.