FAQ

Here is a list of commonly asked questions with answers to help you better understand the process.

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  • WHY SHOULD I USE A BROKER?

    Why take the only offer from your personal bank, when you can get the BEST offer that 30 banks and financial institutions will offer you.  A broker will look at all the options available for you and use his/her expertise to provide you with the BEST options.  I do not work for any lender and therefore am free to recommend the BEST deal for you.  Also each lender has different mortgages they cater too, TDCT maybe a great option for one person and Laurentian Bank maybe better for someone else.

     

    NOT ALL LENDERS OFFER THE SAME PRODUCTS AND THE SAME MORTGAGES!!!!

     

  • HOW MUCH DO YOU CHARGE?

    Under most circumstances the lender will pay me a finder’s fee for bringing them business, only in the rarest of circumstances, i.e. private lending and commercial lending will there be a fee for my services.

  • ARE YOUR INTEREST RATES BETTER THAN MY BANKS?

    My rates are from the banks; however as a wholesaler of mortgages and an expert in mortgages, I am given PRIORITY PRICING.  All Charter banks use “discretionary pricing” and I am able to get the max “discretionary pricing” due to knowledge, expertise and negotiation.  I also have lenders that have very low overhead and therefore offer very low rates.  One very important factor in Interest rates is timelines and understanding these timelines can save you thousands.  If certain rates are offer as “specials” or limited time offers, I am able to maximize your savings by utilizing Limited Time Offers and Quick Close Specials.  The Interest rate that I can get for you will be the best  rate available at that time.

     

  • WHAT IF I FIND A BETTER RATE?

    One of my top priorities is to get you the lowest rate I can get.  I will not provide you with a higher rate, and then ask you to shop around to find a lower rate, then come back to me and I will lower my initial rate to match.  I see this all the time, that clients go and get a preapproval rate and then are told if they find a lower rate that the bank and/or lender will match the lower rate.

    Why not deal with an Upfront, Honest and sincere person who will give you the best rate UPFRONT and not ask you to do the leg work.   If rates go down I will adjust your rate to the lower rate.  I am able to lower your rate up to 7 days before closing if the rate does indeed go down.  Keep in mind rates change almost daily and it requires a very astute person to ensure that you get the BEST deal!

     

    I LOVE TO GIVE MY CLIENTS A LOWER RATE AND SAVE THEM MONEY!

     

  • CAN I GET A 0% DOWN MORTGAGE?

    YES YOU CAN! There are 4 lenders that allow for a borrowed down payment.  Each lender has different criteria for this mortgage; however all NEED very good credit and good job tenure.

     

    Please note with this option, the down payment is loaned to you and amortized over a 5yr term.  The Government of Canada requires that all mortgages have at least 5% down payment onto the property.  We place an unsecured line of credit which you use for your down payment; you will need to make payments on this line of credit till the balance is paid. This is still a great option for those who have trouble saving up for the down payment and want to own their own home.

     

  • WHAT'S THE MINIMUM DOWN PAYMENT I NEED?

    The minimum down payment will depend on you and the property;

     

    Your Credit

    Your Job

    Your Immigration Status

    The property location

    The property type

    The property zoning

    The property purpose

     

  • CAN I USE MY LINE OF CREDIT FOR MY DOWN PAYMENT?

    Not all lenders allow you to use borrowed funds for your down payment.  You can use your line of credit; however, it may result in an interest rate that is slightly higher than the lowest rate available.  If the Line of Credit is secured to a property, it will not be deemed as borrowed and therefore considered cash.

     

    NOT ALL LINES OF CREDIT ARE CREATED EQUAL!!!

  • HOW LONG IS MY RATE VALID FOR?

    This will depend on the lender chosen; most rate holds are for 120 days although some are only good for 90 days.

     

    Please not that preconstruction rate holds are good up to 24 months however the longer the hold the greater the rate!!

  • WHY DO I HAVE TO PROVIDE ALL THESE DOCUMENTS?

    Keep in mind that when you deal with a Broker, he/she does not have years and years of documents on file for you.  We are truly independent and therefore are not provided your past history with your bank or lender.  Also we are held to a higher standard (code of conduct) then most personal bankers and therefore require greater diligence in ensuring a mortgage system free of fraud.  What seems like a hassle to you is often saving thousands of people from being hurt by a mortgage system that has been compromised by fraud.

     

    FRAUD HURTS ALL PARTIES THAT ARENT INVOLVED IN THE TRANSACTION; IT BENEFITS EVERYONE FROM LENDERS TO BROKERS TO CLIENTS TO NEIGHBORS WHEN FRAUD IS ELIMINATED.

  • WHAT HAPPENS IF THE RATES GO DOWN?

    Mortgage rates for the most part are set by the bond market, which is constantly changing.  A rate today may be lower or higher tomorrow, an astute broker will maintain a constant vigilance with the clients he/she has to ensure that if rates do go down after you have signed the mortgage approval they will get the benefit of the reduction.  This level of service is not readily available at the branch level of the bank.

     

    One of the BEST reasons to use a broker is to have someone who works for you to monitor the available rates and ensure that you get any and all discounts that you are entitled to.

  • WHAT HAPPENS IF THE MORTGAGE RATES GO UP?

     If you are in a “fixed rate” mortgage you will receive the interest rate that you were provided at the time of the approval.  You will be protected from any increases when you have a “fixed rate” mortgage.

  • I HAVE NEVER HEARD OF THE LENDER, SHOULD I BE WORRIED?

    There are only a few banks in Canada that have a “bricks & mortar” business model across the entire country.  The vast majority of lenders in Canada do not have a walk-up branch that you can visit.  Also many banks are “regional” banks that will lend to borrowers across the country, but do not have offices across the country.  This in no way makes them any less secure then the traditional Charter banks (i.e. Royal Bank, CIBC and TD Canada Trust).  Also many of the Trust companies that do wholesale mortgaging are fully owned subsidiaries of the Charter banks.

    Almost all mortgages in Canada are insured through CMHC (Canadian Mortgage and Housing Corporation) by the lender.  For the most part the lenders will pay the premium if the down payment is 20% or greater.  This gives you and added layer of security against lender/bank collapse.

     

    COMPTETION IS GOOD; MORE COMPTETION LEADS TO BETTER RATES AND BETTER PRODUCTS

     

  • HOW CAN I PAY MY MORTGAGE OFF FASTER?

    Each lender and each mortgage is different in the options they allow.  A standard offer is 20% added to you payment and a lump sum of 20% each year.

     

    A small increase to you payment can greatly reduce your interest charges and the amount of time needed to pay off your mortgage.  Every extra payment is directly applied to the principal.

     

    If you are interested in reducing your interest and the time needed to pay off your mortgage speak with myself and I would love to show you how to save you even more money.

     

  • CAN I MAKE EXTRA PAYMENTS?

    Not all mortgages allow for you to make extra payments.  Most will allow you to increase your monthly/bi-weekly/weekly payments and also allow you to make a one a year payment directly down on the principal.  If you are interested in paying extra on your mortgage, discuss it with myself before you purchase as this will affect which lender is BEST suited for you!

     

  • I ALREADY HAVE A PRE-APPROVAL FROM MY BANK! CAN I STILL USE YOUR SERVICES?

     In a word..YES!!! You are not tied to any lender until the mortgage funds.  However; it does affect your credit score if you have numerous inquiries on your credit bureau.  It is best to have an independent Mortgage Professional look for the best pre-approval and stick with that person/lender.

     

  • I ALREADY HAVE AN APPROVAL FROM MY BANK! CAN I STILL USE YOUR SERVICES?

    Again, YES!, Keep in mind that changing a mortgage approval in the middle of the deal is possible, but it can be time sensitive and due to time restrictions it maybe be best to stick with the deal you have in place already.  Or even better deal with a Mortgage Professional first and then you know you’re getting the best mortgage you qualify for!

     

  • WHAT IS DISCRETIONARY PRICING?

    “Discretionary Pricing” is a lenders’ evaluation of the value of your business to them.  This is based on many factors outside of credit history.  This is subjective and will vary from customer to customer.  I DO NOT deal in discretionary pricing as it is not a fair or accurate assessment of a clients’ ability to pay back the mortgage.

    If you qualify for the best rate, YOU WILL GET THE BEST RATE I HAVE, no questions asked or negotiations needed.

     

  • WHY DO I HAVE TO PROVIDE 3 MONTHS BANK STATEMENTS?

    With Property values rising and Real Estate being a very high priced investment, criminals are using the mortgage industry to launder money and to finance their operations.  To stem the dramatic rise in criminals using Real Estate as a means of legitimizing their finances, the government has asked us (mortgage providers) to screen clients and mortgages for suspected criminal activity.  This is done to protect the integrity of the mortgage system and to ensure that fraud and criminals are not using house to laundry their money.  We do not profile deals or clients; this requirement is across the board and applies to everyone.  Only time that a client is not required is when your savings/chequing account is with the same company that is providing the mortgage, as they already have the 3 months of bank statements.

     

  • CAN I BUY AN INVESTMENT/RENTAL PROPERTY

    Absolutely, with a down payment of 20% of the property price, you can become a landlord or real estate investor.  Keep in mind that there are numerous tax implications and regulatory requirements to the various governments.  From a mortgage stand point all you need is 20% down payment and verifiable income.

     

  • CAN I USE THE RENT FROM MY INVESTMENT PROPERTY TO QUALIFY FOR A MORTGAGE?

    The rules for using the rent to qualify for the mortgage have changed and vary greatly from lender to lender.  Just because your bank stated that you are ”maxed out” does not mean that another company might be willing to mortgage another property for you.  Let me find the best option for you, I’ll do the leg work and you just find a suitable property to purchase.

     

  • IF I GET A "VARIABLE RATE MORTGAGE", CAN I SWITCH TO A "FIXED RATE MORTGAGE"?

    Yes, most variable mortgages are convertible to a “fixed” or “lock-in” rate.  If at any point during your mortgage term you decide that a fixed rate is better for your situation, you can make a request directly to the lender who is providing your mortgage and ask to lock-in your interest rate.  The rate will be the fixed rate available at the time of your request and NOT the current variable rate that you are paying. (the rate will be higher)

     

  • CAN I MAKE ANY CHANGES TO MY PAYMENTS?

    You are free to make any changes to your payments at any point during your term.  Not all mortgages are available to be paid; monthly, bi-weekly, bi-monthly, weekly, etc.  It is important to discuss this with your mortgage professional prior to the mortgage approval, to ensure that your mortgage has all the payment options you require.  You can also raise you payment anytime you like; however, you cannot lower your payment below your original payment, without a re-application.

     

  • WHY DO "FIXED RATES" DIFFER FROM "VARIABLE RATES"?

    Lenders use different money markets to acquire the funds for your mortgage, depending on the type of mortgage you require.  A fixed rate mortgage is done through the bond market and a variable rate mortgage is done through the Bank of Canada and an inter-bank lending system that uses a “Libour” to determine the “premium to prime” or “discount to prime” rate that you receive.

     

  • CAN I GET AN "ALL IN ONE" MORTGAGE THROUGH YOU?

    Yes you can!!! I offer several options for an “All-In-One” mortgage.  This type of mortgage blends your Lines of Credit, Mortgage, Credit Cards and savings account into one account, saving you thousands of dollars in interest.

     

  • DO I PAY A PENALTY IF I CHANGE MY MORTGAGE EARLY?

    Yes, mortgages are done by terms.  Mortgages are very similar to a cell phone contract.  You can make changes, renew early or cancel; however if you cancel and switch to a different lender there will be a penalty, unless the mortgage is an “open” term.  Most mortgages are “closed” term mortgages.  To find this penalty you must contact the servicing department of your mortgage to get the payout penalty on that day.  Please note that this penalty will change on a DAILY basis and may go up or down based on the current market.

     

  • WHAT IS AN "IRD"?

    An IRD is an Interest Rate Differential; this is a very complex calculation of your mortgage penalty, based on numerous factors.  It is best to call your mortgage provider to find out if your penalty will be 3 months interest (which is the standard charge) or if the IRD will apply.  It is impossible to estimate this charge as it is based on your “discretionary” discount the posted rate at the time of your mortgage funding and the posted rate at the time you request your payout.  After you factor those criteria in, then you must adjust for the amount of the mortgage and the remaining term left.  BEST TO CALL!!!

     

  • HOW DOES BEING LICENSED MAKE YOU BETTER FOR ME THAN MY BANKER?

    All “licensed” Mortgage Associates/Brokers in Alberta, have undergone a criminal record check, they have been finger printed and a licensing and education requirement is placed on them each and every year.  Your Mortgage Professional has a much higher obligation to be honest and sincere in their communications with you than ANY bank representative in Alberta.  Also each licensed Mortgage Professional has a requirement to carry Insurance for their mortgage business.  The Real Estate Council of Alberta (RECA) will also intervene in your behalf if a complaint is filed against a Mortgage Broker.  RECA can issue fines, suspensions or even dismissal, even without legal action.  There currently is NO BANKS that will offer this service to ANY of their clients, in the event of an error or disagreement or blatant disregard for clients’ interest, EVERY bank in this country and any other country will NOT intercede on your behalf, they will protect their own interests first.

     

  • I HAVE BEEN PREAPPROVED! WHY DO I NEED TO HAVE A FINANCING CONDITION?

    No matter how well you are preapproved, there is still one variable that a Mortgage Preapproval cannot factor in and that is the property.   The price, location, condition and type of property can affect your mortgage approval.

    I RECOMMEND THAT ALL DEALS HAVE A FINACING CONDITION ON THEM.

     

  • HOW LONG SHOULD I HAVE THE FINANCING CONDITION FOR?

    A general rule for financing condition is 5 business days.  This should allow for some time to sort out any hiccups in the deal or any appraisals that might need to be done.  Keep in mind that holidays and weekends will affect the total number of days needed as it should be 5 business days.

     

  • WHEN DO I RELEASE THE FINANCING CONDITION?

    The financing condition is put in place by the purchaser and can only be removed by the purchaser.  AT NO POINT DOES ANY LENDER PROVIDE UNCONDITIONAL APPROVAL OF A PROPERTY PURCHASE. LET ME REPEAT!!!!  AT NO POINT DOES ANY LENDER PROVIDE UNCONDITIONAL APPROVAL OF A PROPERTY PURCHASE.  All mortgages do require a fair amount of faith in the transaction.  The mortgage lender can at any point PULL the funding of the mortgage if they feel they have been misled or the terms of the deal have been altered.  It is on faith that the financing condition can be removed.  The Mortgage Associate will provide the greatest assurance that he/she can that the mortgage conditions will be met, at that stage the financing condition can be removed.   Lenders are in the business of lending money and they want to lend money and if you can meet their conditions, then they WANT to lend to you.

     

    But Remember:::: AT NO POINT DOES ANY LENDER PROVIDE UNCONDITIONAL APPROVAL OF A PROPERTY PURCHASE.

     

  • I WANT TO BUY A PROPERTY IN THE U.S. CAN I GET A MORTGAGE ON THAT PROPERTY?

    Yes, you can!!!This can be quite tricky and there are numerous rules to this and those rules vary from State to State...Again...Can’t say this enough.....TALK TO A MORTGAGE PROFESSIONAL FIRST

     

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MARK BERRY MORTGAGE BUROKER

#50 1000 Alder AVE, Sherwood Park, AB

T8A 2G2

(780) 884-3971

mortgages@markberry.ca

Created with love by

#50 1000 Alder AVE,

Sherwood Park, AB

T8A 2G2

(780) 884-3971

mortgages@markberry.ca

#50 1000 Alder AVE,

Sherwood Park, AB

T8A 2G2

(780) 884-3971

mortgages@markberry.ca