FREQUENTLY ASKED QUESTIONS 

What is the minimum down payment required to purchase a home?


The minimum down payment required is 5% for up to a purchase of $500,000. For a purchase between $500,000 to $999,999. The down payment required is 5% for the first $500,000 and then 10% on anything above $500,000 up to $999,999. If the purchase price is $1,000,000 or above, the minimum down payment is 20%.




How do you get paid?


For most conventional residential deals we get paid by the financial institution (bank, credit union, trust company). Sometimes there can be a broker/lender fee. For construction, commercial, and private financing we charge a fee to the client as we do not get compensated from the lender. We make sure you’re aware from the start so there are no surprises.




Can I get a mortgage if I just opened a new business ?


Yes! Most financial institutions will need two years of operations or years in business before providing you a mortgage. We work directly with many lenders who specialize in helping the newly self-employed/business owners.




Why should I use a mortgage broker?


There are many reasons to use a good mortgage broker. In short, we work for you and not the lender. This allows us to arrange the best product available in the market, not just in the one financial institution. This will save you a lot of time and energy. We’re also committed to you and your goals. With our long term approach, we plan, monitor, and make sure we’re doing everything possible to guide you in the right direction..




What do I need to get my first mortgage?


To start you’ll need to fill out our mortgage application (online or download the PDF), verify your employment (source of income), and verify your down payment. This will provide us with enough information to guide you in the right direction. *Refer to our Document Checklist for further clarification*




What is the difference between a fixed rate and a variable rate?


A fixed rate mortgage means that the interest rate is fixed, and therefore the payment stays the same throughout the term. A variable rate mortgage will fluctuate with the bank prime rate throughout the term of the mortgage. A variable rate mortgage typically offers more flexible terms than a fixed rate mortgage. Most lenders also give you the option to convert it to a fixed rate during your term.




What is the difference between a closed term and open term mortgage?


An open term gives you the flexibility to pay off your mortgage at any time without a penalty. The rate is usually higher (than a closed term) to offset the ‘no penalty’ at payout. In a closed term mortgage, you can usually pay down a portion of the mortgage without a penalty, however, if you pay it off in full, you’ll definitely have to pay a penalty. Penalties and payout privileges vary from lender to lender.




Can I use gift money as a down payment for my mortgage?


In most cases you can use gifted funds from a family member as a down payment. They will usually just require a gift letter signed by the donor to verify the funds are not a loan. In some cases, the lender may request to see the history of the gifted funds from the donor’s bank account. In addition to the down payment, some lenders require that the borrower(s) have their own resources for closing costs. (Ex. 1.5% of the purchase price)




What is a pre-approval?


A pre-approved mortgage is when a lender provides an interest rate hold for a specified period of time and for a specified amount of money. This is calculated based on financial information that is provided to the lender. Keep in mind, if the lender hasn’t received and reviewed your documents, the ‘pre-approval’ should not be relied on. We don’t pre-approve, we Pre-Qualify you. We verify income, down payment, and credit upfront so there are no surprises when you find your dream home.




What is a down payment?


Your down payment is the amount of money you are using to purchase the property. It must be from your own sources, unless it’s gifted from family, a true gift not a loan. In addition to liquid financial assets, many of our clients (home owners) use the equity from their existing homes to purchase additional properties. In addition to the down payment, some lenders require that the borrower(s) have their own resources for closing costs. (Ex. 1.5% of the purchase price)




What is a credit score?


A credit score is a three digit number that is determined by a statistical formula that breaks down your personal information from your credit report and other financial sources. Factors that impact your credit are; payment history, delinquencies, balances to Limit Ratio, history/length of accounts, variety of credit accounts, number of accounts, and recent inquiries. Many lenders want to see some sort of credit history and some even have minimum requirements (ex. 2 tradelines (credit card, line of credit) with at least 2 years history)