THE SIMPLE MORTGAGE PROCESS
Tell Us Your Goals
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We want to simplify the process and make it as easy as possible for you to get into your new home.
Here is the most important information to help you get started on your journey with us.
First Steps You Can Take Now
Determine Your Goals
Home ownership is a large investment & it can often feel overwhelming and confusing, so that’s why we created Simple Mortgage. Our name says it all. We’ll ensure the mortgage process simple. We’ll fit you with the right mortgage so you can get the house you’ve been thinking about.
The Simple Mortgage Process begins with you telling us your goals, but perhaps you may not be ready to share you goals, or even unsure if you can afford to. Well, you are in the right place. Below you will find the simple steps you can take to start your journey with us, in the end, you will be ready to TELL US YOUR GOALS.
Why a Mortgage Broker?
The Advantages of Using a Mortgage Broker
We Provide Independent Advice
Since we are independent brokers, we don?t have any ties to certain mortgage solutions or lenders. You have your own goals, needs, and desires, as well as a unique situation. We take all of that into account and provide custom recommendations. Together, we?ll find the best solution.
We Have More Option and Get You Better Rates
Since mortgage brokers aren?t limited in terms of what lenders they can work with, we provide you with the most options. From traditional lenders to credit unions, trust companies, and more, we have access to a huge network. Because of that, we can find you the best rates.
Our Services are FREE For You
On most mortgage transactions, our fees are covered by the lenders we work with. That means you have nothing to lose. Our only job is working for you. We find the best options and work to get you approved.
We Do The Negotiating For You
Mortgage negotiations can be uncomfortable, and most people don?t know what they are getting into. Having years of experience and market knowledge, we negotiate on your behalf.We save you time, money, and hits on your credit rating since we only need to pull your credit once.
We Are Your Advocate
We?ll be working for you until you have successfully closed on your property. We make sure it happens on time and that you are satisfied with the result. Even if you already got pre-approved by your bank or another lender for a mortgage, you?re not locked into using them. In that case, a mortgage broker is like a doctor?s second opinion with tons of treatment options.
Your Credit Score
The Role Your Credit Score Plays in Getting Approved for a Mortgage
While every situation is different, credit score is one of the
aspects lenders look at to make their decision. Your credit score is determined by several factors, including: how long you?ve been establishing credit, your payment history, your outstanding debts, what types of credit you?re using, how many recent inquiries have been made on your credit, and whether you?ve had a bankruptcy or actions taken from collection agencies. If your credit score isn?t where lenders want it to be, we?ll help you develop a plan to get it there.
The Stress Test
The Stress Test: What it is and How it Works
Since 2018, a Stress Test is required to get a mortgage in Canada. It helps you avoid getting into a mortgage that could prove to be a challenge if your situation or interest rates change over time. Simple put, the stress test is to see if you still qualify for your mortgage at The Bank of Canada Qualifying Rate; which is currently 4.79%. But these rules are subject to change, so that?s where we can help. Try our Stress Test Calculator, if you pass, great TELL US you did. If you didn?t, that ok, TELL US you didn?t and we can help.
Down Payment
What You Should Expect to Put Down on Your Home
Your down payment is a main factor when determining how much you will be able to spend on your new purchase. Each home purchase is unique, as is the down payment that will be required. However, the bare minimum required by Canadian mortgage rules is 5% of the first $500,000 and 10% of any remainder. If you have 20% available to put down, however, it will result in a lower interest rate and no mortgage default insurance. When thinking about how much you will be able to put down on your purchase, don?t forget that you?ll need an additional 1.5%-4% of the selling price to cover closing costs.
“I know how much I want to put down, show me how much will I be able to spend. Take me to your affordability calculator.”
Budgeting
What You're Approved for Isn't Always What You Can Afford
You’ve got your pre-approval letter in hand, so now you’re ready to go house shopping, right? Not exactly. The amount a lender is willing to advance you isn’t necessarily what you can afford. The worst thing you can do is end up in financial hardship after purchasing a home. Some people call that “house poor”.
If you’ve done your Stress Test & your Affordability Calculations, that will certainly help you get to a more accurate number, but you’ll want to go beyond that & do some life budgeting to get to a number you are completely comfortable with.
The problem is that there are plenty of life budgeting expenses that tend to get forgotten when you are doing your budget. In order to properly budget for the purchase of a home, you must calculate every expense, including things like Netflix, cosmetics, home Insurance, home maintenance, and property taxes. Then, there are sudden expenses that need to be factored in, such as auto repairs, home repairs, and hospital costs.
Also, keep in mind that if you’re putting less than 20% down on a home, you’ll have an added expense of mortgage default insurance. Typically, that will make a mortgage payment go up by 0.5% -1%.
Complicated, Right?! Well, that?s where we come in. We have created a Life Budget Calculator to help you budget everything in your life. Try it now and get comfortable with what you can afford, then
TELL US YOU GOALS.
“I’m ready to discover what type of mortgage will work for me.”
Pre-Approval
The Role Your Credit Score Plays in Getting Approved for a Mortgage
While every situation is different, credit score is one of the
aspects lenders look at to make their decision. Your credit score is determined by several factors, including: how long you?ve been establishing credit, your payment history, your outstanding debts, what types of credit you?re using, how many recent inquiries have been made on your credit, and whether you?ve had a bankruptcy or actions taken from collection agencies. If your credit score isn?t where lenders want it to be, we?ll help you develop a plan to get it there.
Mortgage Types & Rates
Understand the Different Kinds of Mortgages and Rates
In Canada, there are three (3) main types of mortgages:
Open Mortgage
This type of mortgage is the most flexible, allowing the buyer to pay off the mortgage early without penalty. Due to this flexibility, however, it typically comes with higher interest rates.
Closed Mortgage
This is the most stable type of mortgage because the interest rate is locked in for the term of the loan. The downside, though, is that these loans often have a penalty for early payoff. Some will allow up to 20% in additional payments annually, however.
Convertible Mortgage
With this mortgage type, you?ll have the ability to change your loan into a different type of mortgage at a certain point without incurring a penalty. This is useful if interest rates are on the rise and you want to lock in your rate early. Many restrictions apply and not all lenders offer this type of loan.
There are two (2) main types of rates for a mortgage in Canada:
Fixed Rate
This type of mortgage rate locks in the interest rate for the entire term of the loan. It will not go up or down.
Variable Rate
This rate type is based on the central interest rate that is determined by the Back of Canada. The rate can fluctuate up and down during the term of the loan. There hasn’t been a change to the central rate since September of 2010, but that?s not to say there won?t be.
There are many factors that go into determining what interest rate you will end up with, one of which is the level of risk you bring to the table. There are two types of borrowers in the eyes of the lender:
Conventional
Otherwise known as low-ratio, this is when the buyer is putting down at least 20% down on their purchase. These
mortgages often receive lower interest rates & they do not require that the buyer purchase mortgage default insurance.
High-Ratio
This is the type of mortgage you?ll be given if you put less than 20% down on a property. Interest rates are typically higher, and the buyer is required by law to purchase mortgage default insurance.
“I understand how important it is make sure I know how much I can afford. Take me to your Budgeting Calculator.”
Buying a Home
Helpful Hints to Think About When Buying a Home
We want to help you make the best home purchase and eliminate any surprises or issues you might not have thought of, and that’s what this section is all about.
Before you purchase a home, it is always advised that you get a home inspection to give you a complete understanding of what you’re walking into.
In addition, here are several tips you should think about before making a purchase:
- Make sure the parking situation is going to work for your family.
- Know what kind of heating and cooling is used in the home and determine what your costs will be.
- Determine if the house is well-insulated.
- Ensure the plumbing consists of copper or PVC pipes, not lead.
- Check that the electrical panel has been upgraded.
- Check the sump pump and foundation for good water control and damage.
- Look over decks and porches for signs of damage.
- Double check that any chimneys or brickwork isn?t chipping or crumbling.
- If you?re buying a corner house, remember there is double the amount of sidewalk to shovel when it snows.
- If your thinking about making changes to your new purchase, get an estimate on how much home renovations will cost (HINT: Typically, they area lot more than expected).
“I hadn’t considered all of these tips and I’m excited to hear what other guidance you have for me”
Find the Right Professionals
WE CAN HELP! We have plenty of Local Resources at Your Fingertips.
Since we are Local and have been working in Fort McMurray, Alberta, for 20+ Yeats, we’ve developed relationships all across YMM in all the necessary areas during your home purchase process. We can put you in contact with some of the best realtors, lawyers, home inspectors, and trades people in our city.
If you don?t know where to start or you are new to our city, we are always a great place to start.
Reach out to us, we have all the resources you need.
Getting a Mortgage Doesn't Have to be Complicated.
To start, all you need to do is tell us your goals. It's just that Simple. Let's Get Started!
