Mortgage Broker

Consumer Guide 2015 mbabc.ca | 27 Y ou've found your dream home and qualified for an attractive mortgage with a good rate and flexible terms – all done, right? Not quite. There are several steps left to secure and protect both your mortgage and your property, and your mortgage broker can help guide you through them. First off, you'll need the services of a lawyer or notary public who specializes in real estate transactions. Both lawyers and notaries can process your documents for you, but only a lawyer can offer legal advice or represent you in a dispute should complications arise. Your mortgage broker can recommend trusted professionals and help you determine whether a lawyer or notary best suits your needs. Next up, your lender may require an appraisal of the property you're purchasing in order to make sure it's worth what you've agreed to pay for it. Your mortgage broker will help co-ordinate this, as "lenders usually provide a list of approved appraisers or appraisal companies from which a mortgage broker may choose," explains Michael Beckette, president and CEO of Mortgage Alliance. The appraiser will inspect your home, then determine its value by averaging the recent selling prices of similar properties in the neighbourhood and adjusting up or down for any differences such as an extra bedroom, a pool or a finished basement. Your lender may also require you to have mortgage loan insurance if your down payment is less than 20 per cent of the total purchase price. "Mortgage loan insurance helps protect lenders against mortgage default, and enables consumers to purchase homes with a minimum down payment of five per cent – at interest rates comparable to those with a 20 per cent or greater down payment," says Beckette. He adds that a mortgage broker may suggest which mortgage insurer to use – Canada Mortgage and Housing Corporation (CMHC), Genworth Canada or Canada Guaranty – but it's usually the lender's decision. The premium payable varies based on the percentage of the property's purchase price that is being financed by a mortgage. For example, if you put a five per cent down payment on a $200,000 home, you'll be required to pay a 3.15 per cent premium on the $190,000 being financed by a mortgage, or $5,985. But if you put 15 per cent down ($30,000), your mortgage loan insurance premium drops to 1.8 per cent on the remaining $170,000, or $3,060. The premium can be paid in a single lump sum or it can be added to your mortgage and included in your monthly payments. There are several other types of insurance you'll want to consider as well. The first of these is title insurance, which many lenders insist on. Title insurance was introduced to Canada in the 1990s to protect homebuyers from the flaws and shortcomings of the land registry system. For a one-time fee, it protects the purchaser against errors relating to the deed or right of ownership of the property for as long as he or she owns it, explains Amanda Magee, director of business development for Western Canada, Stewart Title Guaranty Company. Your home and mortgage are your greatest asset and your greatest liability – and your mortgage broker can help you protect them both By Tiffany Sloan MORE THAN MORTGAGES

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