Financing your Home Purchase

Financing, if needed, is a critical piece of the puzzle. Considering homes are not selling for the asking price and there are so many guidelines and restrictions imposed by lenders, you have to make sure you are selecting a mortgage agent or a bank specialist that is experienced and is working for you.  Don’t assume because they have a license or work for a national bank that they are experts. Get references and ask about experience.

My usual recommendation is to always use a mortgage agent or broker for financing your home. A mortgage agent or mortgage broker is licensed by the Financial Services Commission of Ontario (FSCO). Both designations are required to take classes and must take continuing education to renew their licenses every two years.  A mortgage broker has taken some additional classes and requirements in order to manage a mortgage brokerage.  Mortgage Bank employees are not required to have a mortgage license to provide mortgages although some may have licenses. 

The benefits of a mortgage agent are that they represent dozens of lenders and banks so that they can find the best mortgage to suit your needs.  When talking to your mortgage agent, disclose everything including the purpose of the purchase, how long you plan to live there, if you are expecting any life changes such as marriage, divorce, children, moves, career, or job change.  They can only help you based on the information that they know. 

Banks have fewer financing options to offer and tend to have many restrictions when it comes to lending.  By all mean use a bank if are comfortable and that they are providing you good service.  Banks are good options when you have stellar credit and have been banking with that institution for many years.

Mortgage agents are your only option if you have bruised credit, are self-employed, have commission-based income, or work as a contractor.  Mortgage agents have access to lenders that will provide you financing for these scenarios.

In most cases it will not cost you to use a mortgage agent, however, there are certain times when it may cost you a fee if a mortgage agent has to seek alternative financing.  Be prepared to pay a fee if you have very poor credit, show very little income, or have been denied by other financial institutions.