1) Partner with the other professionals to provide information.
2) Advise you on the mortgage application & bidding process.
3) The layout of the buying and legal process.
4) Complete a pre-approval for you.
5) Obtain one or more quotes to earn your mortgage business.

When you deal with only one banker, you may do so because you have built up a client relationship with the bank. An alternative is to use a mortgage broker. They typically offer the following advantages:

• Convenience: Appointments can be arranged in the comfort of your own home, work place, or the Realtor's office at a time convenient to you.
• Competitive: A mortgage broker offers a very competitive mortgage package and can coordinate the legal and appraisal work.
• Approval Time: Mortgage applications can be pre-approved within hours including CMHC and G E CAPITAL.
• Experience: The mortgage broker combines the experience of several bankers and presents their combined effort, in one form or another, to you.
• Knowledge: You typically, will receive fast, efficient, friendly and knowledgeable service.

The Application Process

Banks will not do business with just anybody. It is the responsibility of the lender to assess the application following specific criteria to establish the risk involved in each application. This is known as risk management.

The criteria used are known as the 5 "C's of CREDIT:

• Credit History
• Character
• Cash Investment
• Capacity
• Collateral

Credit History: investigates the client's use of credit in the past to determine the client's credit worthiness.

Character: investigates the client's payment history - has the client satisfied the payment requirements for all borrowings?

Cash Investment: confirms the source of the down payment and confirms the down payment is from the applicant's own resources such as:

• savings
• registered savings plan
• family gift
• other unencumbered assets

Capacity: determines the applicant's financial ability to support their debt service by calculating the following debt ratios:

Principal & interest payment + property taxes + heat (estimate), to not exceed 32% of gross income.

Principal & interest payment + property taxes + heat (estimate) + other regular debt instalments, to not exceed 40% of gross income.

* To quality, applicants would have to meet BOTH debt ratio calculations.
* Although many lenders use these 32/40% measurements, there are some variations.

Collateral: the lender may, through an appraisal or other means of verification, determine the subject property has sufficient lending value to support the requested mortgage amount.

Closing Costs

Since it is important to be financially prepared, here is a list of the most common closing costs. These are payable on the day of closing, unless otherwise indicated.

1) Deed Transfer Tax. In Halifax County, the rate is 1.5% and is charged on the purchase price of the property (with few exceptions). For other counties, please click here.

2) Legal Fees. A certain procedure must be followed to have a property transferred into your name. The lawyer’s fees and disbursements reflect the cost of the service provided. The cost of registering a mortgage adds a bit to this bill.

3) Property Tax Adjustments. You only pay Property Tax for the portion of the year that you actually own the property. The lawyer will do the calculation and reimburse the seller for any prepaid Property Taxes.

4) Fuel Adjustments. In the case of oil heat, the seller will top up the oil tank and the buyer reimburses the seller on closing.

5) Survey Certificate. In certain transactions and particularly if there is any confusion about property boundaries, a survey may be necessary. The cost varies with the size of the property.

6) Home Fire Insurance. If you have a mortgage, home fire insurance in mandatory and otherwise it’s optional. The insurance company of your choice will bill you directly, not necessarily on the day of closing.

7) Inspection. A variety of inspections may be necessary. In the instance of a straight home purchase, this would typically be a house inspection. The inspector usually gets paid once their service is rendered.

8) Lender's processing fee. In the case of non-standard financing, a lender’s processing fee is sometimes charged. This fee is relatively small and is generally payable before the bank opens the file.

9) Lender Insurance fee. In the case of a high-ratio mortgage (often referred to as an insured mortgage), the insurance fee is collected on closing and routinely added to the value of the mortgage loan, although a cash payment on closing is also possible.

OTHER mortgage features you may wish to talk about are:

- Mortgage life insurance;
- Portability of the mortgage;
- Bridge loans and second mortgages;
- Accelerated payment plans;
- Rate commitment periods.

Find basic information on these topics on our "jargon" page, please CLICK HERE (will open in a separate window)

To assess how this information could apply to your personal situation, please contact your mortgage specialist as your primary source of information.

If you do not already have a mortgage specialist (or if you wish to hear a second opinion), it will be my pleasure to put you in touch. PLEASE NOTE that your REALTOR^® will not receive a fee from the bank for approved mortgage applications. We like to maintain this level of unbiased independence while concentrating on our core business (Real Property) without the interference of any secret commission structures.

for the CURRENT MORTGAGE RATES - CLICK HERE

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