Believe it or not, the majority of clients do not pay for a mortgage broker’s services. The cost is absorbed by the financial institutions, which pay the broker a finder’s fee in exchange for their business. This setup allows brokers to shop around for the product and rate that best suits their client’s unique needs. In almost all cases, there is no cost to the client.

In situations where traditional lenders will not approve a mortgage due to credit challenges or some other factor such as having non-traditional income sources and where the application is better suited for an alternative lending solution, a brokerage fee may be charged to the client. This fee is disclosed upfront before making any commitments to proceed.

A mortgage pre-approval provides an interest rate guarantee from a lender for a set amount of money and for a specified period, which is usually 120 days. The pre-approval is calculated based on information provided by you and is subject to certain conditions being met before the mortgage is finalized. Conditions typically include things like written employment and income confirmation and proof of down payment from your own resources, for example.

While pre-approvals do provide a great baseline for your borrowing power, they can be somewhat conservative and do not necessarily reflect your maximum mortgage qualification. Also important to note is that the interest rate on your pre-approval acts as a price ceiling, which means that if you purchase a home within the 120 day pre-approval window, the interest rate on your mortgage will never be higher than what’s been quoted to you - but it can be lower!

Securing a mortgage pre-approval is one of the first steps a home buyer should take before beginning the buying process.

The simple answer is yes! And this is especially true if you are still working in the same industry. And if it’s a new industry altogether, it is still possible. All we would have to do explain the reason for the change to the bank and provide them with the necessary documents that confirm your new employment arrangement.

A fixed rate mortgage is a lending product where the interest rate remains the same through the entire mortgage term (one year, 3 years, 5 years, etc). You will have the opportunity to renegotiate your fixed rate at the time your mortgage matures (i.e. when it reaches the end of its term).

A variable rate mortgage is slightly different in that your interest rate can fluctuate throughout the mortgage’s term. A variable rate mortgage is made up of two components: (1) the Prime Rate, and (2) either a discount or a premium depending on the lender and product. The fluctuating element within your variable rate mortgage is the Prime Rate; this rate is set by your financial institution and can change based on interest rate announcements made by the Bank of Canada. These announcements take place eight times per year and depending on inflation, unemployment, GDP and other global market metrics, the Bank of Canada may announce an increase, a decrease or no change at all to its lending rates. The premium or discount element of your variable rate is the component that remains fixed over the course of your mortgage term.

The best way to ensure you get the best deal at renewal is to enlist your mortgage broker (that’s us!) once again to get the lenders competing for your business just like they did when you negotiated your last mortgage. A lot can change over a single mortgage term, and you can miss out on a lot of savings and options if you simply sign a renewal with your existing lender without consulting Pace Mortgage Group.