Miss Mortgage

Mortgage Insurance Overview

As a first time homebuyer, you may have heard that you may have to pay a mortgage insurance premium.

This mortgage insurance will be required if your down payment is LESS than 20%. Remember that lenders do reserve the right to insure your mortgage even if your down payment is greater than 20% and this decision is often based on the risk associated with the financing. The key players that provide mortgage insurance in Canada today are CMHC, Genworth Financial Canada and Canada Guaranty.  The newest insurer to join the industry is Canada Guaranty.  

As new mortgage insurers join the industry, they are required to apply to OFSI (Office of the Superintendent of Financial Institutions) to become “mortgage insurers” in Canada.  Canadians would certainly welcome more competition and choice, as it would help lower insurance premium costs for Canadians who want to purchase a home and who need mortgage insurance.

Here is a sample breakdown to help you understand how a mortgage insurance premium is calculated for a homebuyer who wants to purchase a home with a 5% down payment using premiums published by CMHC:

Price of home being purchased (A) $242,000.00

5% down payment (B)  $12,100.00 

Financing required (C)  $229,900.00

Mortgage Insurance premium (2.75% of C) (D)  $6,322.25

Amount advanced by lender (E)  $236,222.25

The lender who is reviewing your mortgage application (once approved) will include the mortgage insurance premium on your mortgage commitment as part of your total mortgage loan and this is total amount is repaid over the term of the mortgage loan.

Here below is a table that gives an idea on what the mortgage loan insurance premium charges are based on various down payments levels:

Financing Required  /  Insurance Premium

Up to and including 65%  /  0.50%

Up to and including 75%   /  0.65%

Up to and including 80%   /    1.00%

Up to and including 85%   /     1.75%

Up to and including 90%    /   2.00%

Up to and including 95%   /   2.75%

Here are some questions I often receive:

Why do I need mortgage loan insurance? It is the lender who requires the mortgage loan to be insured.   The mortgage lender passes along the cost of insuring the mortgage to the consumer. 

Is mortgage loan insurance mandatory?  No. There are a few mortgage lenders, on the market, who may provide you with mortgage financing without mortgage loan insurance but there will most certainly be a much higher interest rate offered as well as other administrative fees added to the mortgage loan amount. These other mortgage lenders can be accessed through the mortgage broker community.

Who does mortgage loan insurance protect?  The mortgage lender requires mortgage loan insurance because it protects the lender in the event that the borrower, for some reason, cannot pay their mortgage.

Are mortgage loan insurance premiums taxed?     Yes.   Even though the HST (Harmonized Sales Tax) was introduced on July 1, 2010, this new tax structure has not changed taxation on the mortgage insurance premiums.  The tax paid on the insurance premium amount is still 8%.  Since the 8% tax amount is NOT included in the total loan amount, by the lender, a home buyer would have to pay this sales tax on their closing date.  This amount would be collected from the home buyer, by the lawyer, and would be remitted directly to the government.

This blog post was written by Elizabeth Blair on June 28, 2011.

Elizabeth Blair is a Licensed Mortgage Agent with Mortgage Edge in Richmond Hill, Ontario.   Elizabeth services mortgage clients in Mississauga and all over the Greater Toronto area.

You can contact Elizabeth directly by phone at (905) 510-5785

by email at eblair@mortgageedge.ca

or you visit her website at: www.missmortgage.ca

Elizabeth is licensed with the Financial Services Commission of Ontario and is also a Member of IMBA (the Independent Mortgage Brokers Association of Ontario) www.imba.ca

Agent Lic # M08005880

Brokerage Lic # 10680

Head office is located at: 15 Wertheim Court, Suite 210, Richmond Hill, Ontario, Canada.

 

 

 

What is a Mortgage Bridge Loan?

Sometimes when you buy a home, the closing date for the home you are selling does not match the closing date of the house you are buying.   Some of the typical reasons for a difference in closing dates might be:   you want to get some renovations completed on the home being purchased before moving into it or perhaps you could not get the seller to give you the closing date that you really wanted.  So if the closing date of the home you are buying is before the closing date of the home you have sold, you will need a bridge loan.  

Let’s use a real example so you can understand how a bridge loan amount is derived:

Price of the home being purchased:     $450,000

Less:     Amount being mortgaged:    $360,000

Less:     Deposit you give to the Realtor:   $10,000

Equals:     $80,000   Bridge Loan amount

The bridge loan amount is really your total down payment, less your deposit because the lender is advancing the rest of the mortgage money on the closing date for the home you are purchasing.

Here is how the interest cost is calculated, for a sample bridge loan amount:

Client is buying a new house - closing date = April 30, 2011

Current home is not closing until = June 25, 2011

Clients need a Bridge Loan to cover them for 56 days until current house sells.  

Bridge Loan amount required is $80,000.   Lender’s interest rate = *prime rate (3.00%) plus 4%.

Bridge loan  $80,000   X   0.07 (interest) =  $5,600

$5,600  divided by   365 days =   $15.3424 (per diem cost)

$15.3424   X   56 days =  $859.17

For a Bridge Loan advance that is greater than a certain amount, and is greater than 45 days, the lender will sometimes ask that the bridge loan be secured by way of a collateral mortgage on the property being sold.   If a collateral mortgage is required, lawyers will often charge extra to do this (estimated at $500 and up).  Some lenders will also charge a bridge loan “set-up fee”, and some lenders do not.   Remember also that a property sale must be firm before a lender will arrange a bridge loan for the borrower(s).  And finally, lenders will not advance more than 90% of the value of the property being sold.

This blog post was written by Elizabeth Blair on May 19, 2011.

Elizabeth Blair is a Licensed Mortgage Agent with Mortgage Edge in Richmond Hill, Ontario.   Elizabeth services mortgage clients in Mississauga and all over the Greater Toronto area.

You can contact Elizabeth directly by phone at (905) 510-5785

by email at eblair@mortgageedge.ca

or you visit her website at: www.missmortgage.ca

Elizabeth is licensed with the Financial Services Commission of Ontario and is also a Member of IMBA (the Independent Mortgage Brokers Association of Ontario) www.imba.ca

Agent Lic # M08005880

Brokerage Lic # 10680

Head office is located at: 15 Wertheim Court, Suite 210, Richmond Hill, Ontario, Canada.

 

Closing Costs - what to expect

When you are buying a home, you will hear of “CLOSING COSTS” as extra costs that you will incur as a home buyer in Ontario.   Be sure to set aside 1.5% to 2.0% of your purchase price, to cover these costs.

 

Here is a detailed description of these additional costs and what you should likely set aside as you budget for this very important purchase decision.

 

1.  Land Transfer Tax or Property Transfer Tax:   this is the largest portion of your cost to purchase a home, whether it is a newly constructed home, or a resale property, you will be required to pay this tax to Ministry of Revenue in Ontario.  The tax is calculated based on the fair market value of the property, using a certain formula. 

 

Here is how the Land Transfer Tax is calculated for a property purchased in Ontario:

The first $55,000 is taxed at 0.5%

The next $195,000 is taxed at 1%

The next $150,000 is taxed at 1.5%

And the remaining $250,000 is taxed at 2%.

If you decide to purchase a property in Ontario, and within the City of Toronto, you will be required to pay an additional tax, called the Toronto Municipal Land Transfer Tax and this is calculated as follows:

The first $55,000 is taxed at 0.5%

The next $345,000 is taxed at 1%

And 2% on the entire portion over $400,000.

You can find the Land Transfer Tax calculations on the following websites:

 

Ontario Ministry of Revenue Land Transfer Tax:

 

http://www.rev.gov.on.ca/en/tax/ltt/faq_calculating.html

 

City of Toronto Municipal Land Transfer Tax:

 

http://www.toronto.ca/taxes/mltt.htm#rates

 

2.  8% PST:  If your down payment is less than 20%, your mortgage will be insured by either CMHC or Genworth.  You will be required to pay an 8% provincial sales tax (PST) on the mortgage insurance premium amount.

 

For example, if your mortgage insurance premium is $8,000, you would be required to pay $640.00 as the 8% sales tax portion.   

 

3.  Appraisal:    If you are purchasing a home with greater than a 20% down payment, you may required to pay for an appraisal of your home.  An appraiser is required, by the lender, because it provides the lender with a professional valuation of the real and true value of the property.  Note that if you purchase a home with less than 20% down payment, there is no charge for an appraisal.

 

Note that the bank, lender or mortgage broker, that is arranging your mortgage financing will ensure the appraisal takes place in co-ordination with the realtor(s) representing the buyer and the seller.   

 

As a buyer, there is no need to arrange this on your own. 

 

Banks and lenders only authorize certain appraisers to complete these appraisal reports for them and the appraisal is conducted using one of the appraisers on the lender’s approved appraiser list.  An appraiser will provide a professional valuation of the property being purchased and this original signed report is then passed to the lender for review.  The cost for a residential appraisal can be in the range of $250 - $500 (a larger home with more square footage will cost you more).

 

4.  Property and Fire Insurance Coverage.  You will need to obtain fire insurance coverage on the home and the coverage must cover at least the replacement value of the home.  Note that you should have insurance coverage in place and it should start on the day you take possession of the home.  An insurance policy can cost you from $40.00 to $70.00 per month.

 

 5.  Home Inspection:   When you make an offer on a home, you will want to have it inspected by a professional home inspector.  The inspector will carefully go through the structural aspects of the home to review things like plumbing, heating, cooling, the roof, the foundation and will identify anything that they observe which might need to be improved or repaired, within what timeframe and even provide a priority list.  The inspector documents these observations in a detailed report/booklet for the interested buyer.  The cost for an inspection can be anywhere from $300 to $500.

 

6.  Tax on newly constructed homes.

 

If you are purchasing a newly constructed home, you will need to also pay GST.  For those who purchase a new home up to $400,000 will be required to pay GST.  Those who purchase a home over $400,000 will now be required to pay GST and PST (now combined and called the Harmonized Sales Tax – HST) which is equal to 13%.  The following table was extracted from the Ontario Ministry of Revenue website.

 

 

Home Purchases

	GST-taxable before July 1, 2010	PST-taxable before July 1,2010	Is there a change to the amount of tax payable under the HST?
New Homes up to $400,000	5%	No PST	No change
New Homes over $400,000	5%	No PST	Yes   **
Resale Homes	No GST	No PST	No HST
Real Estate Commissions	5%	No PST	Yes (changes to 13%)

 

 

** New homes purchased as primary residences, valued at $400,000 or more will be eligible for the maximum new housing rebate of $24,000.

 

Note that home buyers purchasing a newly constructed home, as their primary residence, over $400,000 may be eligible for a rebate up to a maximum of $24,000.   The details on this rebate are explained at the following website:

http://www.rev.gov.on.ca/en/notices/hst/04.html

 

7.  Legal and disbursement:    You will need a lawyer who will help you with the purchase transaction.  The lawyer will search title, review mortgage terms with you, and finalize all closing details.   It may cost you between $1,000 to $2,400

 

8.  Closing Adjustments: An estimate will be made for closing adjustments for bills that the seller may have prepaid such as property taxes, utility bills (heating, hydro and water) as well as other possible charges (like condo/maintenance fees).  Note that any bills that arrive after the closing date become the buyer’s responsibility.  This is also handled by the lawyer, and those amounts can range from $0 to $1,000 depending on what the lawyer discovers on the search.

 

9.  Title Insurance:   Most lenders will accept title insurance in lieu of the physical survey.  The title insurance will protect the buyer from unusual instances of fraud, forgery, title defects or survey issues.  Title insurance can be purchased at $200 to $250 and this is a one-time fee on closing.

 

10.  Interest Adjustment:    This is the cost of any interest accrued between the actual closing date and the first mortgage payment date.   The Interest Adjustment could be anywhere from $0 to $1,000 depending on the closing date and the payment frequency of the mortgage).

 

11.  Estoppel Certificate:   This certificate is only required if you are purchasing a condo unit.  The document provides information regarding a condo’s financial and legal status.  This document usually costs around around $80 - $100.

This article written by Elizabeth Blair on August 25, 2010.  Elizabeth is a Licensed Mortgage Agent with Mortgage Edge in Richmond Hill, Ontario.  Elizabeth services mortgage clients in Mississauga and all over the Greater Toronto area.

You can contact Elizabeth directly by phone at (905) 510-5785

by email at eblair@mortgageedge.ca

or you visit any of her websites at:

www.missmortgage.ca

www.burlington-mortgage.ca

www.oakville-mortgage.com

www.streetsville-mortgage.ca

Elizabeth is licensed with the Financial Services Commission of Ontario and is also a Member of IMBA (the Independent Mortgage Brokers Association of Ontario) www.imba.ca

Lic # M08005880 / Brokerage Lic # 10680

Head office is located at:  15 Wertheim Court, Suite 210, Richmond Hill, Ontario, Canada.

 

 

Land Transfer Tax / Property Transfer Tax in Canada

If you decide to purchase a property, in Canada, you will be required to pay a tax to the Ministry of Revenue/Finance, in the province where you are buying.

This tax is commonly referred to as the “Land Transfer Tax” or the “Property Transfer Tax”.

The tax is usually paid to the Ministry of Revenue, within the Province and the tax is calculated based on the fair market value of the property, using a certain formula.  The formula used to calculate the land transfer tax portion varies greatly from province to province.  I used Ontario’s formula, as an example.  Here is how the Land Transfer Tax is calculated for a property purchased in Ontario:

The first $55,000 is taxed at 0.5%

The next $195,000 is taxed at 1%

The next $150,000 is taxed at 1.5%

And the remaining $250,000 is taxed at 2%.

So if you purchased a home for $300,000 in Ontario, your Land Transfer Taxes payable would be calculated as follows:

The first $55,000 is taxed at 0.5% or 0.005 * $55,000 = $275

The next $195,000 is taxed at 1% or 0.01% * $195,000 = $1,950

The next $150,000 is taxed at 1.5% or 0.015 * $50,000 = $750

And the remaining $250,000 is taxed at 2% or 0.02 * $0 = $0

The total Land Transfer tax payable is:   $275 + $1,950 + $750 = $2,975

If you decide to purchase a property in Ontario, and within the City of Toronto, you will be required to pay an additional tax, called the Toronto Municipal Land Transfer Tax and this is calculated as follows:

The first $55,000 is taxed at 0.5%

The next $345,000 is taxed at 1%

And 2% on the entire portion over $400,000.

So using the above formula, a home valued at $300,000 will result in an additional tax of:

The first $55,000 is taxed at 0.5% or 0.005 * $55,000 = $275

The next $345,000 is taxed at 1% or 0.01% * $245,000 = $2,450

And 2% on the entire portion over $400,000 is taxed at 0.02 * $0 = $0

The total Toronto Municipal Land Transfer Tax payable is:   $275 + $2,450 = $2,725

Land Transfer tax payable $2,975 + Toronto Municipal Land Transfer Tax payable is $2,725 = $5,700 !!

I decided to do some research to just compare all of the provinces and territories to see which provinces/territories had the highest and which provinces/territories had the lowest land transfer taxes.  

The table below is based on a $300,000 purchase price and the data was collected as of July 31, 2010. 

I was very surprised (well actually not) that the results show Ontario (Toronto buyers) are paying the HIGHEST land transfer taxes, compared to any other city in the country!!

Provinces and Territories	Estimated Land Transfer Tax Payable
Home Purchase Price = $300,000
Ontario (city of Toronto area*)	$5,700
Nova Scotia (Halifax county)	$4,500
British Columbia	$4,000
Manitoba	$3,150
Prince Edward Island	$3,000
Quebec	$3,000
Ontario (not the city of Toronto)	$2,975
Newfoundland	$1,250
Saskatchewan	$915
New Brunswick	$805
Yukon	$750
Northwest Territories	$490
Alberta	$335
Nova Scotia (not Halifax county)	$150

 

Information gathered as of July 31, 2010.  This information is not guaranteed and therefore should not be relied upon without verification.  E.&O.E.  * Those who purchase in the City of Toronto, are also required to pay the Toronto Municipal Land Transfer Tax

 

This article written by Elizabeth Blair on July 31, 2010.  Elizabeth is a Licensed Mortgage Agent with Mortgage Edge in Richmond Hill, Ontario.  Elizabeth services mortgage clients in Mississauga and all over the Greater Toronto area.

You can contact Elizabeth directly by phone at (905) 510-5785

by email at eblair@mortgageedge.ca

or you visit any of her active websites at:

www.missmortgage.ca

www.burlington-mortgage.ca

www.oakville-mortgage.com

www.streetsville-mortgage.ca

Elizabeth is licensed with the Financial Services Commission of Ontario and is also a Member of IMBA (the Independent Mortgage Brokers Association of Ontario) www.imba.ca

Lic # M08005880 / Brokerage Lic # 10680

Head office is located at:  15 Wertheim Court, Suite 210, Richmond Hill, Ontario, Canada.

 

 

 

 

 

 

What is a "closed" and "open" mortgage?

 

When you are shopping for a mortgage, you may hear the terms, CLOSED or OPEN mortgage.    Let me explain the difference between these two options so that can determine which type of mortgage structure is best for you.

OPEN MORTGAGE   An “open” mortgage means that the mortgagor (the borrower) can pay the mortgage off, fully, at any time, without a mortgage penalty.   A fully open mortgage is suitable for the following types of borrowers: 

a) a property investor buys a property and has intention of selling it in a very short timeframe;

b) a borrower sets up this mortgage because they are expecting a large sum of money (for example, an inheritance or a work bonus) and will use that money to pay off the full mortgage loan amount;

c) a borrower who might be required to move out of the country in the near future (perhaps due to a work relocation requirement) and would need to pay the mortgage off in full when the house sells.

d) you receive regular large bonus amounts, as an employee of your company, and you wish to apply these amounts to your mortgage anytime without the restrictions that might come on a lender's regular pre-payment terms.

e)  or perhaps you do not want to be locked into any term, for your mortgage loan.

Note that, the mortgage rates, for fully OPEN mortgages are higher than those given for  “closed” mortgages.   For example, effective today June 14, 2010, a fully open variable mortgage rate, is available at Prime Rate Plus 1%.

CLOSED MORTGAGE    A closed mortgage means that the mortgagor (the borrower) is given a contract “term”.     If the borrower breaks the mortgage, before that contract term is up (known as the renewal date), the borrower must pay the mortgagee (the lender) a full three months of interest penalty to get out of the contract (or IRD penalty) as well as the "mortgage discharge fee". 

So you can see that there are specific reasons why a borrower might choose a CLOSED mortgage over an OPEN mortgage.

This post was written by Elizabeth Blair on June 14, 2010 a Licensed Mortgage Agent with Mortgage Edge in Richmond Hill, Ontario.  Elizabeth services mortgage clients all over the Greater Toronto Area.

You can contact Elizabeth by phone:  (905) 510-5785

Or email:    eblair@mortgageedge.ca

 

Visit her websites at:    

www.missmortgage.ca

www.burlington-mortgage.ca

www.milton-mortgage.ca

www.oakville-mortgage.com

www.streetsville-mortgage.ca

Elizabeth Blair is licensed with the Financial Services Commission of Ontario and is also a Member of IMBA (the Independent Mortgage Brokers Association of Ontario) www.imba.ca

Lic # M08005880 / Brokerage Lic # 10680

Head office is located at:     15 Wertheim Court, Suite 210, Richmond Hill, Ontario, L4B 3H7

 

Frustrated with lender document requests?

Are you buying a house and maybe just totally frustrated now, with your lender, and all of their requests for more documents?

Here is one area, I hear about the most.....let me shed some light on a popular question about the whole requirement to provide “proof of down payment” and the real reasoning behind it.

All Canadian banks, have implemented very strict policies to cover this subject called, “Anti-Money Laundering”.  These policies have recently been strictly enforced and monitored because of “mainly” the back-door terrorist financing.  With this in mind, you can probably see why there is such vigilant watch placed on the movement of money, especially any border-to-border movement.  Canadian laws have been put into place to ensure all banks and lenders comply and that they all have consistent standards to ensure that questionable activities and money transfers cannot occur. 

As you know, purchasing a house requires the movement of a very large amount of money and therefore, the monitoring of mortgage funds, also falls under that same strict scrutiny.  The lender will always need to know where the funds came from, where the funds reside now, and what is the exact ownership of those funds.

As long as a borrower can provide legitimate documents (bank statements, investment accounts, and other proof) that they have sufficient funds, here in a Canadian bank account or investment account, to satisfy the down payment and the closing costs, then a lender is fine with this.  

Here is what a mortgage lender will typically ask for:

If you are pulling funds from an existing savings or chequing account, the lender will want to see print-outs, with your full name and address, bank name, and account number, going backwards from the current date.   That account should show your down payment plus your closing costs there, and that these funds have been accumulated there.   If there are large transfers, into your account, these will need to be explained to the lender.

For example:   if a lender sees a large deposit of say $120,000 going into your bank account, the lender has the right to ask where it came from and be prepared to even go after additional documents to prove the movement of the money.   Lets say, you have recently moved to Canada, from the USA.  You sold a house in the USA, and you had a $120,000 deposit made into your bank account (from your sale proceeds).  This $120,000 shows up on your 3-month bank statement window print-outs.  Yes, the lender can ask you to provide the proof of the sale document (a copy of the sale agreement) and perhaps even a copy of the lawyer’s statement of adjustments which would clearly demonstrate what funds you would have left over from the property sale.

If you are pulling funds out of your investment accounts, the lender may want to see copies of those investment accounts.

If you are pulling funds out of an existing RRSP account, under the government Homebuyer’s Plan, you should provide a copy of the RRSP statement, plus a copy of the completed and signed RRSP withdrawal form.

As frustrating as the documentation process may seem to a borrower, it is really part of the extreme due diligence that lenders have had to put into place to protect their mortgage “book of business”.  It is best to fully co-operate with your banker or broker and provide the documents that are being requested to ensure a smooth financing process.

This blog was written by Elizabeth Blair, a Licensed Mortgage Agent with Mortgage Edge in Richmond Hill, Ontario. 

Elizabeth services mortgage clients in Mississauga

and all over the Greater Toronto area.

You can contact Elizabeth directly by phone at (905) 510-5785

by email at eblair@mortgageedge.ca

or you visit her website at:    www.missmortgage.ca 

Elizabeth is licensed with the Financial Services Commission of Ontario and is also a Member of IMBA (the Independent Mortgage Brokers Association of Ontario) www.imba.ca

Lic # M08005880

Brokerage Lic # 10680

Head office is located at:  15 Wertheim Court, Suite 210, Richmond Hill, Ontario, Canada.

What is a mortgage discharge fee?

I received an email from someone who found my website on the internet, asking me why they were charged a discharge fee, by their bank, when they paid off the full balance of their mortgage.  This was a fee that they were surprised to see and they were checking with me to see if that was a valid charge that they had to pay.

I explained to this person that this was most definitely a valid fee and that they should go back to their original mortgage contract/mortgage commitment to read the fine print, listed somewhere in their document.  If you refer to the fine-print of your mortgage agreement/commitment, you will see it there listed under a “fees” section and it will list all standard fees borrowers will pay in certain situations, for example, service fees, assignment/transfer fee, processing fee, default charges/missed payment fee, as well as the discharge fee, as well as other possible fees related to the mortgage.

Here are a few situations where you would be required to pay a discharge fee:

1)  if you pay off your entire mortgage balance;

2)  if you switch from your current bank, to another bank, and register a new mortgage with the new bank.

3)  if you sell your home and switch from your current bank to another bank.

The discharge fee is worked out, by your bank, on a simple one page form and it really does seem to be a very excessive fee to pay, for a simple form that may have taken your bank a short time to prepare.  Interestingly, the mortgage discharge fee varies from province to province and from lender to lender.   Did you know, for example, that in the province of British Columbia, The Financial Institutions Commission (FICOM) which regulates the financial services industry, has stated that a mortgage discharge fee must not exceed $75.  You can read about their position at this following link:

http://www.fic.gov.bc.ca/pdf/mortgagebrokers/mb-07-003.pdf

Unfortunately, the Financial Services Commission of Ontario (FSCO) has not created a similar cap on the bank’s mortgage discharge fee in Ontario.  While every bank must disclose the discharge fee, in the mortgage contract provided to you, you can also go on-line to see what current published discharge fees are, at any time.  Remember, however, that the discharge fee that you see in the mortgage contract you signed, is the fee that you will be charged once there is a need to have a mortgage discharge statement prepared.  Bank’s published discharge fees can be viewed at this following link:

http://www.fiscalagents.com/thestar/mtg_disx_sort.shtml

This article was written by Elizabeth Blair, a Licensed Mortgage Agent with Mortgage Edge in Richmond Hill,Ontario. Elizabeth services mortgage clients in Mississauga and all over the Greater Toronto area.

You can contact Elizabeth directly by phone at (905)510-5785

by email at eblair@mortgageedge.ca

or you visit her website at:    www.missmortgage.ca 

Elizabeth is licensed with the Financial Services Commission of Ontario and is also a Member of IMBA (the Independent Mortgage Brokers Association of Ontario) www.imba.ca

Lic # M08005880

Brokerage Lic # 10680

Head office is located at: 

15 Wertheim Court, Suite 210,Richmond Hill, Ontario, Canada.

 

 

 

 

 

Mortgage Broker & Mortgage Agent compared to a Mortgage Development Officer.

In Canada, people can use a Mortgage Broker, a Mortgage Agent or a bank employee usually known as a "Mortgage Development Officer" to get their mortgage in place.

As a consumer shopping for a mortgage, you may be asking, so what really are the differences between these ?   

Here is a table that I have created to help you compare:

	Mortgage Broker / Mortgage Agent	Mortgage Development Officer works for the Bank
Disclosure to Borrowers	The Mortgage Broker and Mortgage Agent are required to follow the disclosure stipulations per the Mortgage Brokers Act. The Mortgage Broker and Mortgage Agent must inform the borrower about the mortgage transaction using a detailed document called the “Statement of Mortgage”.  The Statement of Mortgage contains details such as, legal description of the property, the loan amount, the term of the loan, the amortization period, the payment amount, the payment frequency, the total amount owing at the end of the mortgage term, the interest rate and a detailed breakdown of all other fees payable by the borrower, for example, broker fees or lender fees, etc. and the final effective cost of borrowing. The Mortgage Broker and Mortgage Agent must provide a Statement of Mortgage to the borrower which shows what the effective annual interest rate is.	The Mortgage Development Officer is required to use disclosure documents that comply with the Bank Act. The Mortgage Development Officer will provide details of the mortgage transaction to the borrower, however, the banks documents are not as “detailed” as the “Statement of Mortgage” document used by Mortgage Agents. The Mortgage Development Officer forms do not disclose the effective annual interest rate.
Disclosure to Investors	The Mortgage Broker and Mortgage Agents must provide detailed disclosure documents to the investor.  The investor is given adequate time to consider the investment opportunity before investing in the mortgage.	Mortgage Development Officers do not arrange financing with private lenders.
Product Offerings	Mortgage Brokers and Mortgage Agents are able to access the mortgage products of several lenders giving them access to various programs, lending options, and ability to shop and compare all of the mortgage rates available in the market. Mortgage Brokers and Mortgage Agents can access financing through private lenders.	Mortgage Development Officers only have access to the products available with that particular bank. Mortgage Development Officers do not arrange financing with private lenders.

This was written by Elizabeth Blair at Mortgage Edge.

You may contact Elizabeth by calling (905) 510-5785 or email:   eblair@mortgageedge.ca

http://www.missmortgage.ca/

Understanding mortgage payment options

Most lenders will allow you to pay your mortgage by any of the following frequencies:

Monthly, semi-monthly, weekly, bi-weekly, weekly accelerated and bi-weekly accelerated. 

You may be wondering what the differences are between each.   

Here is a simple summary to help you understand the differences between each payment option - click here.

Elizabeth Blair, Mortgage Edge

Phone:  905-510-5785

email:   eblair@mortgageedge.ca

web:    www.missmortgage.ca

What is MPAC?

Municipal Property Assessment Corporation or “MPAC” is a non-profit corporation which began operations on December 31, 1998.  MPAC is responsible for providing property assessments on buildings, land and property improvements for all municipalities in Ontario.  These assessments provide the value of the property as well as classify the property. Each year, the property assessments are mailed to individual property owners and the city will then use these property assessment values to determine what taxes individual property owners must pay.