A mortgage broker offers advantages from start to finish

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Find a good mortgage broker in Quebec for the purchase of a property

Are you planning to buy a house? It is highly advisable for you to find a good mortgage broker to make sure that your real estate transaction is in order.

What makes one broker better than another? This guide will tell you more about the role of a mortgage broker and how to find a competent broker.

What are the qualities of a good mortgage broker?

A good mortgage broker must hold a valid license to practice issued by the Organisme d’autoréglementation du courtage immobilier du Québec (OACIQ).

This organization protects the public and provides information about real estate brokerage. It is also advisable to check their list of authorized brokers on the OACIQ website to ensure that you are dealing with someone who is licensed to practice.

In addition, mortgage brokers in Montreal or elsewhere in Quebec are governed by the Civil Code of Quebec under the Real Estate Brokerage Act. It is prohibited to impersonate a mortgage broker.

Find a mortgage broker who will listen to your needs and deliver the service you deserve.

The benefits of working with a Good Mortgage Broker for your Home

Consulting a qualified mortgage broker allows you to get all the relevant information you need.

Specifically, you will be able to obtain:

• Information from several financial institutions that you can compare to save money
• Advice tailored to your needs and your situation
• Discount on interest rates that only a broker can offer you
• Mortgage financing

In addition, you will save time because your broker will look for the best mortgage products available on your behalf.

Further, a broker can help you to obtain a pre-approval that is essential to know how much you qualify to borrow from a financial institution. A mortgage broker can offer you the best advice regarding a mortgage pre-approval.

A mortgage broker can also inform and advise you on the types of mortgages that are available in the market.

What are the types of mortgages in Quebec?

There are several mortgage products offered by financial institutions.

• Conventional mortgage:  Specifies the details related to the mortgage such as the amount, the interest rate and the term. To be valid and legal, it must be registered on the title of the property.
• The lender (financial institution) must provide all the details of the mortgage to the borrower (you). This type of mortgage does not include information from other loans that could be requested, such as a line of credit.
• Subsidiary Mortgage: As mentioned by the Financial Consumer Agency Canada, the particulars of a mortgage loan may not be included in the mortgage that is registered on the title of your property. A collateral mortgage can be used to secure multiple loans from your lender, including a mortgage or line of credit. A separate credit agreement sets out the specific terms of the mortgage loan.
• Open mortgage: it allows you to make repayments at any time without paying penalties. Its duration is usually short (6 months or 1 year). The interest rate is guaranteed throughout its duration. On the other hand, the interest rate is higher than that of other mortgages.
• Closed mortgage: its interest rate is generally quite low. Penalties may apply if you repay your mortgage faster, although there are clauses that allow you to repay a little more per year. The interest rate is guaranteed for a specified period of time.

Prequalifying for a mortgage: Step 1 to buying a house

If you think that looking around for a good property to buy is the first step to home ownership, you are hugely mistaken.

The first step is to prequalify for a mortgage so that you know that you can be approved by a lender and also know how much you are qualified to borrow.

When you get a mortgage prequalification, you can look for the most ideal home to buy and make an offer to purchase a property with confidence.

You can ask a good mortgage broker to assist you with your plan to buy a dream house. He will guide you throughout the process, starting with a mortgage prequalification.

When you get approved and prequalified for a mortgage, you get the benefit of:

• Locking-in the interest rate for a period of time while you search for a property
• Determine the maximum amount you can borrow

The latter is important because it helps you know which houses you can afford to buy, thereby saving you time during your search.

Steps for a mortgage renewal

At the end of the term (usually 5 years) and you still owe your lender a balance for your mortgage, you must renew your mortgage for another term.

Your lender will send you a renewal letter that you can easily accept and sign. However, it is advisable for you to evaluate the mortgage terms and conditions before you do to make sure that your mortgage agreement is still in line with your financial goals.

You are not obligated to renew your mortgage with your lender unless you are completely satisfied that you are getting the best offer.

1.  Begin to shop for a new mortgage 4 months before the end of the term.

When your mortgage renewal time is approaching, mark it on your calendar, counting back 120 days.  On this date, most lenders will start the renewal process. This means you can also renew your mortgage with your current lender early without paying any penalty.

If for some reason, you are not happy with your current mortgage, this is also the time for you to do your research or contact a mortgage broker.  He can start finding out what other lenders can offer you so that you know your options and prepare you to negotiate with your current lender before you renew.

2.  Think of your financial goals.

Your financial goals when you first took out your mortgage 5 years ago may have changed.  Maybe your income has increased significantly or you may have lost some of your income. Your expenses could also have gone up with a new child or medical expenses.  These changes must be considered when renewing your mortgage. Perhaps you need to access some of the equity so you can use it for your needs. Consider your financial goals when you choose a mortgage product, rate, and term. A good mortgage broker can also help you reach your financial goals and give you advice regarding renewing or refinancing a mortgage.

3.  Write down your mortgage needs.

Write down what you are looking for in a mortgage by asking yourself these questions.

• Can you afford to increase your monthly payment to pay down your mortgage sooner? If yes, review the prepayment terms being offered by your current lender.
• Are you expecting a windfall (bonus, inheritance, etc.) which you can pay towards the principal? If yes, check the prepayment term for lump-sum payments offered by your lender.
• Will you be able to pay off the entire mortgage before the end of the term? If yes, consider prepayment penalties for fixed and variable mortgages.
• Do you need to borrow more money from your mortgage? You can consider collateral mortgages and consider penalties regarding refinancing your mortgage.
• Are you planning on selling your house or moving before the end of the mortgage term?

Knowing what you need from a mortgage will put you in a better position to choose the right type of mortgage product and whether to renew with your lender or switch your mortgage.

4.  Renegotiate with your lender and shop around with a broker.

Your lender is required by law to send you a renewal statement no less than 21 days before the end of the term.  The lender will send by mail the lowest posted rate they can provide you and this is valid for 30 days before maturity.  This offer protects you from any possible rate increase during this period.  If you have done your research and believe that you can get a better offer, you can try to renegotiate with your lender.

Of course, it is not certain that your lender can give you a better offer. This is also a good time for you to meet with a mortgage broker to look for better options in the market.

5.  Decide on your mortgage renewal or switch.

If you have all the information you need, you must decide by asking yourself which lender can give you the best mortgage product and terms and conditions. If you choose to renew with your current lender, just sign the renewal slip and return by mail.

If you have decided to switch to a different lender, more paperwork is required but you can benefit from lower interest payments. If you work with a mortgage broker, he can take care of all the paperwork. A broker or lender can also offer to pay all or part of the fees associated with switching your mortgage to a new lender but not all will so it is better to prepare cash for these fees.

Switching a mortgage: Why and When to switch lenders

Your mortgage is a financial commitment you make for a long time. Thus, after you buy your house, you will periodically need to reassess your mortgage to make sure you are saving as much as possible from your mortgage payments.

If the time to renew your mortgage is just around the corner, you should take the time to consider if you want to stay with your lender or find another lender with a better mortgage offer.

Why should you switch to a new lender? There are several good reasons for doing so.

1.  To get a better mortgage rate to save on interest payments.

If a different lender can provide you with a lower mortgage rate than the one your lender is offering, switching your mortgage over to a new lender could potentially save you a lot of money from interest payments. This can translate to thousands of dollars over the term of your loan.

For instance, your mortgage balance with your current lender is $270,169 amortized over 25 years. Your current lender’s mortgage renewal offer is 5-year fixed rate of 2.99%. Your monthly mortgage payment will be $1,285.34 and after 5 years, your interest payments will reach $37,596.16.

If you find another lender that is willing to give you a 5-year fixed rate of 2.45% with a monthly payment of $1,213 monthly, your interest payment at the end of the term will only amount to $30,448 in interest.

Switching your mortgage could get you savings of $7,148, certainly not small by any measure.

2.  To obtain better mortgage terms and conditions.

If another bank or lender can give you better mortgage terms and conditions, it could be advantageous for you to switch your mortgage. Prepayment options is one of the most important factors to consider. If your potential lender can help you pay off your mortgage faster and save you additional charges in interest, it would definitely be worth pursuing.

Many lenders allow you to make an additional payment once a year but the amount varies from one lender to the next.  If a new lender can give you a prepayment privilege of 20% instead of the 10% from your current lender, you can save thousands more on interest for the loan term.

There are also lenders that give you the option to increase your monthly mortgage payment amount once a year as well as make a lump sum payment towards the principal annually or on the mortgage term maturity.

How can you switch your mortgage to a new lender

The primary step you need to take if you plan to switch your mortgage to a new lender is to look for a lender that can provide you with better terms and conditions.

To start, you can do your own research (go to different banks, apply online with different sites) or simplify the process by approaching a mortgage broker who can help you from A to Z.

Take note that when switching lenders, you can’t change the amortization period or mortgage amount. You can only change the payment frequency, interest rate, and prepayment privileges.

When your application with a new lender is approved, you will need to pay fees (see below) and the new lender will close your loan with the previous lender and issue a new mortgage.

Fees for switching mortgage lenders

You may need to pay certain fees when you switch over your mortgage to another lender, such as:

• Appraisal fees (verifies the value of the property)
• Assignment fee (transfer of the mortgage from the previous to the new lender)
• Discharge fees (discharges the previous mortgage and registers the new one)
• Legal fees (a lawyer must sign any new mortgage agreement)

All in all, the fees associated with switching a mortgage can cost from $1,600 to $2,750.

A new lender can offer to pay some of these fees or waive them when you switch your mortgage over to them.

When switching to new lender can be complicated

Switching over a mortgage to a new lender is not always cut and dried. Sometimes, the process will become complicated. Below are situations when switching a mortgage is more challenging:

• When your mortgage term is not completed yet and you will need to break the mortgage to switch to a different lender
• With a collateral mortgage, the services of a real estate notary will be required to assist you in moving your mortgage to a different lender
• When you need to change the amortization period or the amount of the mortgage loan during renewal (refinancing is needed)

The Financial Consumer Agency of Canada recommends shopping around before you choose to renew with your current lender or moving to another lender.

A mortgage broker from our network can help you find a better mortgage. He will shop around for you to get you a better mortgage deal and make the whole process simple and straightforward.

Fill out the form on this page and receive FREE and NO OBLIGATION quotes to help you with a mortgage renewal or refinancing.

Renegotiate and Renew a Mortgage to Get a Better Rate

Renegotiation could help you save a lot of money on your mortgage.

First, do not automatically renew your mortgage as suggested by your lender. You will not be offered a better deal with an automatic renewal.

It is to your best advantage to compare mortgage products available immediately from different financial institutions.

In addition, evaluate your situation to see if switching to a different lender is a good option for you. There may be charges for a change of lender, for example, for a subsidiary mortgage.

We must compare and understand various options. A mortgage broker can help you understand better and guide you in your steps.

When renewing your mortgage, it may be time to review all your loans according to your projects:

• Buying / selling your property
• Travel
• Rénovations

This will allow you to have an up-to-date financial picture.

Tips from Brokers to Pay Your Mortgage Faster

Pay a lump sum each year: Have you managed to save money this year? Why not use a portion of your savings to reduce the balance of your capital? Even a payment of $ 1,000 could save you about $25,000 in interest and help you pay for your home earlier than expected.

Increase payment frequency: Paying your mortgage on a weekly or bi-weekly basis may be a good choice to save money in the long run. Both options will greatly reduce the amount of interest paid on the total amortization of your property.

Monthly payments are paid 12 times a year, while bi-weekly payments are paid 26 times in a year. For example, for 12 monthly payments of $ 1000, you will make 16 payments of $500, which will make a total of $ 12,000 and $ 13,000 paid, respectively.

You do not have to match the frequency of payments with the amount of your payment.

Increase the amount of payments: Once a year, you can increase the amount of each of your payments. However, the amount applicable at the beginning of the term must not be exceeded. Once you make this change, you will not be able to go back and make smaller payments.

Make an additional payment: It is possible to add an additional amount each month, if you have additional cash. For example, if you pay $1,000 in mortgage on the 10th of each month, you have the option to add up to $ 1,000 more (total amount that includes principal and interest).

Choose from the best Mortgage Brokers to get the most out of your Mortgage

With Compare Home Quotes, you can obtain the services of a mortgage broker anywhere in Quebec: Quebec City, Montreal, Gatineau, Trois-Rivieres, Sherbrooke, Saguenay, Drummondville, Victoriaville and more!

In addition to finding a licensed and qualified mortgage broker, you can compare offers of 20+ financial institutions, very quickly, with your broker’s help.

Our broker partners were carefully selected to ensure that you receive outstanding services. They are all qualified to give you mortgage advice and obtain preferential rates that only brokers have access to.

To save time and money, simply complete a form in just 2 minutes and receive offers from a trustworthy mortgage broker. It’s the ultimate convenience that is to your best advantage!

To save time and money, simply complete a form in just 2 minutes and receive offers from a trustworthy mortgage broker. It’s the ultimate convenience that is to your best advantage!