5 Expert Tips About Real Estate Mortgages

Are you interested in purchasing a condo in the city of Toronto? Contact a mortgage broker. Toronto’s real estate is definitely a seller’s market. You have likely heard of the numerous bidding wars, the skyrocketing values and homebuyers willing to spend $200,000 over the asking price to purchase a home. This is probably the most competitive market in the world.

If you are willing to plunge yourself into the exorbitant market then you should always seek out a professional mortgage broker, one who can get the best deals and rates for your situation.

Mortgage brokers today have seen it all: everything from middle-class families wanting to buy a $1.1 million home on a $60,000 salary to an affluent speculator who thinks he can flip a property and can earn a 50 percent ROI. Indeed, they have seen it all, which also means that they get frustrated by some of their clients who lack elementary and pertinent knowledge.

Here are five expert tips about real estate mortgages:

1. Know the Rules About Down Payments

In the last year, the federal government has changed the rules pertaining to down payments. Today, homes worth less than $500,000 require a five percent down payment; homes worth more than $500,000 need a down payment of five percent for the first $500,000 and another 10 percent for the remaining balance; homes worth more than $1 million need a down payment of 20 percent.

This is a lot of money, zeroes and calculations!

Mortgage brokers find that potential homebuyers don’t have a fraction of the down payment that is required. As Toronto’s hot real estate market continues to surpass $1 million, it is increasingly difficult for applicants to gather $200,000 just for a down payment alone.

2. Be Inquisitive: Ask Plenty of Questions

Mortgage brokers like to collaborate with their applicants. They want to know their personal situation, understand what they want out of a home and determine how much they can afford. These professionals dislike when clients remain quiet and refrain from asking further questions.

In other words, mortgage brokers want you to ask plenty of questions and be more involved.

3. Remain Honest at All Times

Let’s be honest: a single fib will have your mortgage application rejected immediately.

The role of a mortgage broker is to connect you with the right lender at the right rates. They can only achieve this if they have all of your correct personal, professional and financial data.

For instance, if you tell the broker that you earn $100,000 a year and have a $50,000 down payment, but it is actually half of that then they won’t be able to help you at all.

4. Always Let the Broker Know of Your Situation

Although it is highly recommended that you should maintain the status quo and refrain from making any sudden lifestyle changes, if something new happens in your life then you must keep your mortgage broker in the loop. This is important because revised information – a sudden $40,000 car loan or a baby – can impact your rates and overall application.

5. You May Not Get Your Dream Mortgage or Home

This is hard for mortgage brokers to tell their clients: you may not get your dream mortgage or home. Considering the state of the real estate market today, you may not receive a mortgage with a 30-year amortization period and a two percent interest rate. You may not even be able to get that four-bedroom home you’ve eyed on with your income. Everyone needs to know this.

Mortgage brokers are not a dime a dozen, and you don’t pay them for their services (they receive a commission). You should never be frightened of a mortgage broker and you must remain honest at all times. Remember, in this current real estate market, you need as many allies and friends as you can get. Otherwise, you will be lost and you will have no one to turn to in order to acquire property in Leaside, Parkdale, Forrest Hill, North York or The Beaches.

A mortgage broker is your friend in this quest to obtain a new home for you and your family.