Frequently Asked Questions About Getting A Mortgage
Mortgages are major commitments that must be thoroughly understood to ensure their terms and conditions suit your goals and financial capacity. As a result, when it comes to acquiring a mortgage, you may have tons of questions and in need of answers. At Quickfire Mortgage Solutions, we are experienced in the field of mortgages and want to arm you with the most accurate information available so you can obtain an ideal mortgage. To do this, we’ve answered some of the most frequently asked questions about getting a mortgage.
1. What is the best rate I can get?
Your mortgage term plays the biggest part in determining the interest rate that you’ll be charged. Your credit score is another aspect that will influence the interest rate for which you will qualify, and the more stable you appear as a borrower, the lower your rate may be. Just remember that the rate is not the most important part of obtaining a mortgage product. In other words, even if you qualify for the lowest rate, you often have to give up other things such as prepayments and porting privileges when opting for the lowest-rate product.
2. Can I refinance my home to pay off debts?
Yes, by refinancing now and paying off your debt, you can put yourself and your family in a better financial position. That said, it’s vital to not rack up your credit cards before refinancing. So set goals and budgets, and stick to them! Reach out to us if you’re struggling with your budget and want to see if there is a better strategy for you.
3. What’s the maximum mortgage amount I can qualify for?
To determine the amount for which you will qualify, there are two calculations you’ll need to complete. The first is your Gross Debt Service (GDS) ratio. GDS looks at your proposed new housing costs (mortgage payments, taxes, heating costs, and strata/condo fees, if applicable). Generally speaking, this amount should be no more than 32% to 35% of your gross monthly income. For example, if your gross income is $4,000, you should not be spending more than $1,280 on monthly housing expenses. The second calculation is your Total Debt Service (TDS) ratio. The TDS ratio measures your total debt obligations, including housing costs, loans, car payments, and credit card bills. Generally speaking, your TDS ratio should be no more than 44% of your gross monthly income. So, before you fall in love with a potential new home, you may want to obtain a pre-approved mortgage. This will help you stay within your price range so you can spend your time looking at homes you can confidently afford.
4. How much am I supposed to pay my mortgage broker?
The great news about working with a mortgage broker is that you don’t have to pay us a cent for their services. We are paid by the lender we secure your mortgage with. In exceptional circumstances, especially for commercial mortgages, a fee may be charged, but this is always disclosed at the beginning and would be transparent.
5. How long does the mortgage process typically take?
If you can submit the necessary documentation right away, we might be able to get an approval in as little as twenty-four hours. Keep in mind, the longer it takes for us to receive your documents, the longer it will take to secure approval. But, timing is also contingent on lenders. Some lenders are much faster in their approval process than others. We will be able to properly advise you on timing once you choose which lender to go with.
6. Why is an appraisal necessary?
Most purchases with conventional mortgages that include a minimum 20% down payment require an appraisal because the mortgage is uninsured. Lenders want to see that your purchase price is in line with the property’s fair market value. They also want to make sure you are purchasing a quality property and that they will be able to recuperate the full amount if you default on the loan.
7. How much money do I need for a down payment?
In most cases, the minimum down payment required is 5% of the purchase price of the property. It can also be more than 20% at times, but this will depend on the terms and conditions or your mortgage.
8. Should I work with a mortgage broker or my bank to obtain a mortgage?
To obtain a mortgage, you can either work with your bank or a mortgage broker. With your bank, you get one choice, and that’s the choice that they offer you. But, if you look at the lending market, there are plenty of other lenders out there that can provide you with a product or rate better suited to your unique needs. Every bank says they have the best product or rate, but it’s just not possible for everyone to have the right fit for you. When you work with a mortgage broker, you will be given options that match your requirements. Accordingly, you can make a decision.
For a leading mortgage broker in Edmonton, AB, capable of supporting your needs and looking out for your best interests, reach out to Quickfire Mortgage Solutions. Our brokerage is headed by Stefan Cherwoniak, an independent mortgage broker and advisor who works for you. Through his lender network, he can present you with a range of choices, allowing you to select the best options and receive the great deals. Moreover, he will guide you at every step of the way and help you make sense of your choices. Thus allowing you to make your decisions with confidence.
To learn more about how we can help you, please click here. If you have more questions about mortgages, feel free to contact us by clicking here.