3 Reasons to Use an Independent Mortgage Professional!
Victor Anasimiv • April 13, 2021
If you need to borrow money to finance any property, working with an independent mortgage professional will save you money, time, and provide you with better options than your bank.
And if that is the only sentence you read in this entire article, you already know all you need to. However, if you’d like to dig a little deeper, here are three reasons why working with an independent mortgage professional is in your best interest.
The best mortgage is the one that costs you the least over the life of your mortgage. An independent mortgage professional will guide you.
All mortgages are NOT created equal. Unfortunately, slick marketing and consumerism have led us to believe that the lowest “sticker price” equals the best value. As it relates to mortgages, we’re led to believe that the lowest rate equals the best mortgage. However, this is entirely wrong.
When considering which mortgage is the best for you, you’ll want to find one that will cost you the least over the total length of the mortgage. There are so many more factors to consider than just rates, such as the initial term, fixed or variable, amortization, or any potential penalty to break the mortgage (should you need to sell the property before the end of your term).
An independent mortgage professional will outline all your options, and help you find the mortgage that best suits your needs. Sometimes taking a mortgage with a bit of a higher rate makes sense if it gives you flexibility down the line to avoid huge payout penalties.
Save time and protect yourself by submitting one mortgage application, and let an independent mortgage professional find the best product for you.
Let’s face it; getting a mortgage can be challenging enough on its own. Everyone’s financial situation is a little different and making sense of lender guidelines is a full-time job in itself. When you work with an independent mortgage professional, you submit a single mortgage application, all your documentation is collected upfront, and one credit report is taken.
Your mortgage professional will then compare your mortgage application and financial situation to various lender guidelines and provide you with the best mortgage options (from their expert opinion). By allowing your mortgage professional to do all the research with multiple lenders, you save time while being provided with more options than you’d have available to you if you did all the work on your own, a win-win situation.
An independent mortgage professional works for you, on your behalf, while a bank specialist works for the bank and has the banks best interest in mind.
It’s no secret that Canadian banks make A LOT of money. It seems every quarter they turn billions of dollars in profit (despite the economic environment). They do this at the expense of their customers by charging as much interest as they can while locking clients into mortgages with fine print that costs them a lot of money down the line if they need to break their mortgage.
Bank employee’s work for the bank, they are paid by the bank to make money for the bank. In contrast, independent mortgage professionals are provincially licenced to work for their clients and are paid a standardized placement or finder’s fee for matching borrowers with lenders.
When you work with a single bank, you only have access to the products of that bank. When you work with an independent mortgage professional, you have access to all of the lenders that mortgage professional works with and all of their products.
If your goal is to find the best mortgage, one that costs you the least over time, you need product options. And independent mortgage professional provides you with this.
If you’d like to discuss mortgage financing, as an independent mortgage professional, I would love to work with you. Contact me anytime.
As the name implies, a cashback mortgage is similar to a standard mortgage, except that you receive a lump sum of cash upon closing. This lump sum will either be a fixed amount of money or a percentage of the mortgage amount, usually between 1-7%, depending on the mortgage term selected. How you use the cash is entirely up to you. Some of the most common reasons to secure a cashback mortgage are to: Cover closing costs. Buy new furniture. Renovate your property. Supplement cashflow. Consolidate higher-interest debt. Really, you can use the cash for anything you like. It’s tax-free and paid to you directly once the mortgage closes. Understanding the cost of a cashback mortgage. Now, while it might appear like a cashback mortgage is a great way to get some free money, it’s not. Banks aren’t altruistic; they’re in the business of making money by lending money. Securing a mortgage that provides you with cash back at closing will cost you a higher interest rate over your mortgage term. A cashback mortgage is like getting a fixed loan rolled into your mortgage. Your interest rate is increased to cover the additional funds being lent. Now, with so many different cashback options available and with interest rates constantly changing, it's nearly impossible to run through specific calculations on a simple article to outline how much more you’d pay over the term. So, if you'd like to identify the true cost of securing a cashback mortgage, the best place to start is to discuss your financial situation with an independent mortgage professional. When you work with an independent mortgage professional instead of a single bank, you receive unbiased advice, more financing options, and a clear picture of the cost associated with securing a mortgage. Getting cashback at closing is a mortgage feature that makes the bank more money at your expense. This isn’t necessarily a bad thing; the key is to be informed of the costs involved so you can make a good decision. Eligibility for a cashback mortgage. Simply put, a cashback mortgage isn’t for everyone. This is a mortgage product that has tougher qualifications than standard mortgage financing. Any lender willing to offer a cashback mortgage will want to see that you have stable employment, a fabulous credit score, and healthy debt service ratios. If your mortgage application is in any way “unique,” the chances of qualifying for a cashback mortgage are pretty slim. Breaking your mortgage term early. In addition to paying a higher interest rate to cover the cost of receiving the cashback at closing, a cashback mortgage also limits your options down the line. If your life circumstances change and you need to break your mortgage mid-term, depending on the conditions set out in your mortgage contract, you’ll most likely be required to either pay all of the cashback received or at least a portion, depending on how long you’ve had the mortgage. As all cashback mortgages are tied to fixed-rate terms, so in addition to repaying the cashback, you’d also be required to pay the interest rate differential penalty; or 3 months interest, whichever is greater for breaking your mortgage term early. Sufficed to say, should you need to pay out your mortgage early, breaking your cashback mortgage will be costly. Certainly, this is something to consider when assessing the suitability of this mortgage product. Get independent mortgage advice. Understanding the intricacies of mortgage financing can be difficult at the best of times. With all the different terms, rates, and mortgage products available, it’s hard to know which mortgage is best for you. So while a mortgage that offers a cash incentive upon closing might initially seem like an attractive offer, make sure you seek out the guidance of an independent mortgage professional to help you navigate the costs associated with a cashback mortgage. While it might be a great option for you, there might be other mortgage options that better suit your needs. It's worth a conversation for sure! If you’d like to discuss what a cashback mortgage or any other mortgage product would look like for you, please get in touch. It would be a pleasure to work with you.
If you're a homeowner aged 55 or older, you may have heard about reverse mortgages —and chances are, you've also heard a few myths that made you think twice. At CV Mortgage Group, we’re here to clear the air and help you understand the real facts behind reverse mortgages in Canada. Let’s break down some of the most common misconceptions and what’s actually true. Myth #1: “With a reverse mortgage, you no longer own your home.” Reality: You always retain ownership of your home. A reverse mortgage doesn’t take your home away. You stay on title and remain the legal owner, just like with a traditional mortgage. As long as you continue to meet your mortgage obligations—such as paying property taxes and maintaining the property—you stay in control. Myth #2: “You’ll owe more than your home is worth.” Reality: That’s not allowed in Canada. Thanks to the “no negative equity guarantee,” the amount you owe when your reverse mortgage is due will never exceed the fair market value of your home— as long as mortgage obligations are met. This federally mandated protection ensures that you or your estate are never left with a bill greater than your home's value. Myth #3: “Reverse mortgages are too expensive.” Reality: Reverse mortgages can actually be a cost-effective solution. Yes, you’ll need to cover appraisal costs, legal advice, and a closing fee—but when compared to the costs of downsizing, selling, or relocating , many homeowners find a reverse mortgage to be the more affordable and convenient choice. Myth #4: “Reverse mortgages have higher interest rates.” Reality: It depends on the situation. Reverse mortgage rates are generally higher than traditional mortgage rates, but they don’t require monthly payments . For retired Canadians who may not qualify for a conventional mortgage—or for whom fixed monthly payments are a financial burden—a reverse mortgage offers flexibility and freedom . Myth #5: “You can’t pass your home to your kids.” Reality: You absolutely can. When you pass away, your heirs can choose to repay the reverse mortgage and keep the property . And thanks to the no negative equity guarantee, they’ll never owe more than the home’s market value if all mortgage obligations were met. Still Have Questions About Reverse Mortgages? You're not alone. Reverse mortgages aren’t for everyone, but they can be a powerful tool for retirees who want to access their home equity without selling or moving. Let’s talk about whether a reverse mortgage is the right fit for your retirement goals. Contact us today for expert guidance you can trust.
If you’ve been thinking about buying a second property and you’re looking to put some of the pieces together, you’ve come to the right place! Whether you’re looking to buy a vacation property, start a rental portfolio, or help accommodate a family member, there are many reasons to buy a second property (while keeping your existing property), which might make sense for you! Now, while there are many great reasons to buy a second property, there is also a lot to know as you walk through the process. The key here is to have absolute clarity around your why. Ask yourself, why do you want to buy a second property? This isn’t a decision to be taken lightly or one that should be made too quickly. Buying a second property should be a strategic decision that allows you to accomplish your goals, and it should include an assessment of your overall financial health. So with clear goals in mind, the best place to start the process is to have a conversation with an independent mortgage professional. This will allow you to assess your financial situation, outline the costs, and put together a plan to make it happen. While purchasing a second property is similar to buying a primary residence, there are some key differences. Just because you’ve qualified in the past for your existing mortgage doesn’t mean you’ll qualify to purchase a second property. One key difference is the amount of downpayment you might be required to come up with. A property that is owner-occupied or occupied by a family member on a rent-free basis will require less of a downpayment than if the second property will be used to generate an income. So, depending on the property's intended use, you might have to come up with as much as 25%-35% down. This is where strategic planning comes in. Consider unlocking the equity in your existing home to finance the downpayment to purchase your second home. Here are a few ways you can go about doing that: Securing a new mortgage if you own your property clear title Refinancing your existing mortgage to access additional funds Securing a home equity line of credit (HELOC) Getting a second mortgage behind your existing first mortgage Securing a reverse mortgage The conversation about buying a second property should include assessing your overall financial health, leveraging your existing assets to lower your overall cost of borrowing, and figuring out the best way to accomplish your goals. And as it's impossible to outline every scenario in a simple blog post, if you’d like to discuss your goals and put a plan together to finance a second property, connect anytime. It would be a pleasure to work with you.
