Mortgage Basics

What does a mortgage broker do?
A mortgage broker works as a liaison between client and lender. They understand all the options and solutions that are available for their clients and make recommendations based on what is best for their individual situation. They help guide the client through the entire mortgage process.

What is the difference between a fixed-rate and adjustable-rate mortgage?
In a fixed-rate mortgage, the rate and payment remain the same for the duration of the term. In an adjustable-rate mortgage, the rate and corresponding payments, fluctuate with increases and decreases in the policy rate set by the Bank of Canada.

How much can I borrow for a mortgage?
How much you can borrow is based on your credit score, financial information and how much you can afford.

What factors determine mortgage interest rates?
There are several factors that affect what interest rate you will be eligible for. These include credit risk, size of downpayment, length of your mortgage term, type of mortgage you choose (fixed, variable or a combination) and if you are self-employed.

Pre-Qualification and Pre-Approval

What is the difference between pre-qualification and pre-approval?
A pre-qualification is a general assessment of your borrowing capacity based on approximations of your financial situation and does not require a credit check. A pre-approval, on the other hand, is a thorough review of the aspiring homeowner’s finances and requires the completion of a mortgage application and credit check. A pre-approval provides you with a better idea of the interest rate you will be eligible for and puts you in the position of being a serious buyer as you will know your budget.

How do I get pre-approved for a mortgage?
Start with completing an online application with a One Link Mortgage Broker. They will follow-up with you to discuss your situation and ask for any required documentation. Once everything has been obtained, it is submitted to a lender for approval.

What documents for I need for a pre-approval?
You typically will need to provide the following documents:
Employment and Income Verification – letter of employment, recent pay slips, T1 General, Notice of Assessment, any additional income sources.
Financial Information – a list of current assets and liabilities, bank account information
Confirmation of your down payment – savings or investments statement from within the last 90 days, sale of an existing property, and a gift letter if applicable.
Property details of the home you would like to purchase if applicable

Does being pre-approved guarantee a mortgage loan?
No - a pre-approval is not a guarantee that you will receive a mortgage loan. The mortgage can still be denied by the lender even if it was originally pre-approved.

Mortgage Application Process

What documents are needed for a mortgage application?
The documents required for a mortgage application include:
A copy of government issued ID, pay stubs, Tax forms (T1 General of T4), NOA, letter of employments, bank statements, proof of assets/investments, mortgage pre-approval letter, other sources of income.

How long does the mortgage application process take?
The timeline will depend upon several factors including your individual situation, the availability of the lender and the property information. It can vary from a few days up to a few weeks.

What happens after I submit my mortgage application?
The mortgage broker will review your application to ensure that you can afford the payments to carry your mortgage loan. They will calculate your Gross Debt Service Ratio and Total Debt Service Ratio to see if you will fit within lender guidelines for a mortgage approval.

What factors can impact a mortgage approval?
There are several factors which can affect your mortgage approval. These include the size of your down payment, your credit score, your income, your employment history and current work status, current debt, your Debt-to-Income Ratio, your credit history and what assets you have.

Mortgage Types and Options

What are the different mortgage term options?
The length of your mortgage term will impact the type of interest and the interest rate you are eligible for. Terms can range from a few months to 5 years or more and your mortgage can have a fixed or variable interest rate.

Can I pay off my mortgage early without penalty?
You can speak to your mortgage broker about increasing the amount of your payments, even by small amounts, to help pay off your mortgage faster. You may also be able to make lump-sum payments.

What is CMHC insurance?
This is mortgage loan insurance which helps protect lenders against mortgage default and enables consumers to purchase homes with a minimum down payment starting at 5 per cent.

Closing Process

What happens during the closing process?
Closing refers to the final step in the homebuying process. This is when the deal is finalized, funds are dispersed, documents are signed and the buyer can take legal possession of the property from the seller.

How long does it take to close on a house?
In Manitoba, the entire process shouldn’t take more than 30 to 60 days depending upon your individual situation.

What costs are involved in closing a mortgage?
There are several different costs associated with closing and they may include legal fees, Land Transfer Tax, insurance (home, fire and title) and interest adjustment to seller (if applicable).

What documents do I need to sign at closing?
You will meet with your lawyer and sign your offer to purchase and mortgage documents. There could be additional legal documents included depending on your personal circumstances.

Loan Servicing and Repayment

How do I make mortgage payments?
Your lender will let you know what repayment options are available to you. Payments may be made online or through the lender’s app, for example, but most likely will be automatically deducted from your bank account.

Can I change my mortgage payment due date?
Mortgage payment dates are set when you finalize your mortgage, but you may be able to change them. Your mortgage broker will be able to advise you what is possible.

What options do I have if I can’t make my mortgage payment?
The first thing to do is contact your lender and let them know your situation. They will be able to discuss possible options.

Refinancing

What is mortgage refinancing?
It is using the equity from your home to complete home renovations, pay off excess consumer debt or to use for life experiences such as a trip, furthering your education or to help loved ones.

How do I access the equity in my property?
You are able to refinance up to 80% of the value of your home. Contact your mortgage broker for further details.

What are the costs associated with refinancing?
A simple property evaluation and legal fees will help you access the funds required.

What happens to my mortgage when my term is up?
Contact your mortgage broker to find out what options best suit your needs. Some examples include moving your mortgage to a different lender for a lower interest rate or accessing the equity in your home to complete any renovations etc.

Additional Resources

Are there any first-time homebuyer programs?
In Manitoba, there is the Home Buyers’ Plan (HBP) and the First Time Home Buyers’ Tax Credit (HBTC). The Home Buyers’ Plan allows you to withdraw up to $35,000 tax-free from your RRSP as a loan to build or buy your first home while the HBTC allows buyers who acquire a qualifying home to claim a rebate on their tax return.

What type of mortgages do you offer?
We offer residential home mortgages for the purchase of a single-family dwelling, condo and vacation properties as well as commercial mortgages for business properties.

What are the current interest rates?
We have access to over 50 mortgage lenders and we will provide you with the best mortgage rate that you qualify for.

How much can I borrow?
Contact your mortgage broker to determine the maximum mortgage that you can qualify for based upon your unique situation.

What is the minimum down payment required?
The minimum down payment is 5 per cent or greater depending on your unique situation.

What fees are associated with getting a mortgage?
Legal fees, property evaluation fees, and closing costs are typically associated with getting a mortgage.

Can I get pre-approved for a mortgage?
Yes, you can! That is something that One Link Mortgage specializes in.

Can I switch my mortgage to another lender?
Yes, you are able to switch lenders upon the expert advice of your mortgage broker.

How does my credit score affect my mortgage application?
Your mortgage broker will be able to determine what interest rates you will qualify for based upon on your credit score and history.

What options are available for self-employed individuals?
Your mortgage broker will determine your best mortgage options based upon your unique business for self situation.

Can I negotiate the terms of my mortgage?
Your mortgage broker will negotiate on your behalf, the term that works best for your individual situation.

Do you offer mortgage insurance?
Your mortgage broker will ensure you receive the coverage you are eligible.

Are there any special considerations for investment properties?
As each case can be unique, your mortgage broker will be able to give you advice.

What are the potential risks associated with a mortgage?
Your mortgage broker will guide you on the positives and negatives involved the securing a mortgage.