Mortgage Agent & Money Advocate Hamilton, On
The first step we'll take together is to hop on the phone to talk about your goals and fill out an application. On this initial call, we'll go over your timeline, ideal budget, income, credit, and down payment, this is where we'll discuss any questions and what to expect moving forward. This call gives me a better idea of where you're at in the home-buying process.
From here, I'll compile all the next steps and send you a complete synopsis of what we discussed. If you're actively shopping, we'll start locking in rates to protect you from rate increases while you shop!
GET THE FULL BREAKDOWN OF THE PROCESS HERE 👈
Refinancing is taking equity out of your home to use it to pay down higher interest debts or to put money towards renovations. There isn't a black and white answer as to if you should refinance or not.
When a client is considering refinancing, I like to look at their current mortgage, the potential penalty and the existing debts they're paying monthly. Most of the time, it makes sense to consolidate and save on interest, but every situation is unique, so we'll look at the numbers to determine the best plan.
The first general rule of refinancing is that the maximum mortgage we can obtain on a property caps at 80% of the home's value. So the first step is determining the value of your home. The second rule is that we need to qualify for the mortgage we're hoping to apply for, so the next step is ensuring that income and credit are in line.
Here's an example:
Let's say you have a current mortgage of $400,000 and about $50,000 in higher interest debts, and you would like to refinance to do a renovation that will cost $75,000. That means we need to borrow at least $525,000 to complete this. In this example, let's say your house is worth $750,000. Since the maximum mortgage allowed is 80% = $600,000, in this case, there is enough equity to refinance to pay down debt and do some renovations.
A rate hold is when we present a complete mortgage application (income breakdown provided, credit bureau pulled with consent, down payment info) to a lender to secure the present day's rate for you.
The interest rate is held for 120 days at a time. Some lenders provide their current rates to the rate hold while others add a premium to the rate to secure this money and put it on hold for you; this depends on your down payment, credit etc. Based on the available lenders at the time, I typically gather a few rate holds for each client.
The interest rate may go up or down between when we get a rate hold and when you find and close on a property. If the rate goes up after we secure something for you, you will still qualify for the best rate held as long as the closing date of your purchase is within the 120 days. Similarly, if interest rates go down, you will get the lowest one.
If you haven't found a home by the time your rate hold expires, we'll keep locking them in until you find something! I tend to watch the rate increases very carefully – if I see rates are about to increase, I'll lock them in sooner than the 120-day window.
There are a few takeaways here...
1. Accessibility and communication
One of the most important things to consider when getting a mortgage is being able to communicate throughout the process. I am available by text, email and phone to go over your questions (and there will be many) that pop up over the entire process. When dealing with the branch, it can sometimes be difficult to reach people who work within stricter 9-5 hours and do not communicate outside the landline.
I work with 35+ lenders to make sure you have options! Branches can only offer their products, whereas I can present multiple lenders at once. I also continue the "rate shopping" throughout the process to ensure we still have the best rate by the closing date.
Since I work independently and not directly for a bank, I can offer impartial advice on lenders and all their products. As an independent, I don't feel the pressure to take on everyone - if there is a better deal for you, I will absolutely encourage you to take it.
There is no cost for most buyers (upwards of 99% of mortgages). Agents are paid directly from banks once we bring them business and the mortgage closes. If your situation requires alternative lending or a private mortgage*, there would be a lender and/or a broker fee, all depending on the type of mortgage arranged. Every fee associated with your mortgage will be communicated upfront, so there are no surprises!
*Alternative lending or a private mortgage are loans outside the government's affordability or credit guidelines. For example, if you've lost work or have a unique self-employed situation, we can work with other lenders who don't typically have options for you.
My goal is to always provide my clients with the absolute best rate on the market. The secret is that now that you've googled "interest rates" or "mortgage" or anything mortgage related ... you will experience incessant marketing and ads about different lenders and their rate promotions - lucky you! 😅
The truth is, I work with a broad range of lenders who all want your business and want me to send your mortgage to them. I'm also 100% referral based, so it is in both YOUR and MY best interest to get you the best product and rate out there so that you can share your experience with your family and friends. 😉
I welcome rate questions! If you see an advertisement that seems like a better deal, please do not hesitate to bring that to me. I'll look into it to see if it's a product that is available for you and your situation.
Whether you're purchasing or hoping to do renovations, I suggest you open up a line of credit or switch lenders when you're up for renewal – we can compare all options. Mortgages are priced differently for purchases with different down payments vs refinances etc., so we'll assess all the mortgage options together.