The Basics

Applying for a Mortgage
Second Mortgages
Types of Mortgages

Applying for a Mortgage

The mortgage application process is pretty much the same as applying for any loan. A mortgage application asks for personal identification information, such as name, address, date of birth and Social Insurance Number. Current employment and income information for each applicant is required. A personal net worth statement asking for current banking, savings, asset and liability information provides the lender with a general picture of your financial situation. A Mortgage Consultant will know what information is important to which financial institution and how to present that information to your best advantage.

Second Mortgages

You may wish to consider a second mortgage instead of a personal loan (because the interest rates are lower) for home improvements, major purchases, children's education or consolidating debts. The interest rate on a second mortgage is generally one percent above the current first mortgage rate and is amortized over a shorter period than the first.

To get a second mortgage you must meet all of the same qualifications as you did when you were approved for your first mortgage. You may also be required to have a professional appraisal done to accurately determine the present value of your home.

Types of Mortgages

The mortgage industry is very competitive and Canadian financial institutions have been quite innovative in the creation of new mortgage products in order to lure new business. A Mortgage Consultant can help you wade through the options and decide on what type of mortgage is best for you.

Some of the possibilities:

Fixed or Variable Rate
Convertible Rate
Open or Closed Term
High Ratio First or First & Second Combination
Short Term or Long Term
Re-Advanceable Mortgages
Secured Line of Credit
Split Mortgages
Second Mortgages
Progressive Draw (Builder's Mortgages)
...etc.

If that isn't enough to confuse the average home buyer, many banks, credit unions and trust companies are offering 'reduced interest for first year', 'no payments for 3 months' and 'cash back at closing' deals as well as discounted rates. Which deal will save you the most? Which deal will make life easier for you considering your particular situation? Do you qualify for any or all of these specials? Your Mortgage Consultant can calculate the cost or savings of these special offers and you can make a decision based on facts not hype.

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