Russian Library Dot CA: Future List Of Qualified Canadian Russian Speaking Mortgage Brokers.
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As the saying goes, everyone likes to own a beautiful house. However, owning a home is not always readily affordable for everyone. What about others, should they abandon their ‘dream’. Not necessarily, thanks to the mortgage industry.
People borrow money as a loan when they like to buy a house, purchase a car, pursue higher studies etc. or in an emergency. When they apply for a loan, banks or other lending organizations, known as creditors, seek evidence of ownership of some property by the borrower. The borrower pledges the property to the creditor. If the borrower doesn’t repay the loan according to the agreement, the lender may take legal steps to acquire the borrower’s property. A qualified Calgary Mortgage Broker Josh Tagg can help you understand how this works.
Steps involved in the mortgage process:
The prospective homeowner, who applies for a mortgage loan, approaches a mortgage processing company and fills up a form of request known as Mortgage Lead. A mortgage lead normally includes details such as Date of application, Personal information, Details of collateral property, Purpose and Amount of Loan required, affordable Down Payment, Applicant’s Annual Income and Credit Report. The mortgage processing firm sends the documentation to several lenders including banks, credit unions, and mortgage finance firms.
Whether the loan applicant seeks the lender directly or through a mortgage firm, chances of his obtaining a mortgage loan depend upon his Credit Profile or Credit Report. Credit Profile is documentation that shows how promptly or otherwise, the person repaid any previous loans. The loan advancing organization makes a very careful assessment of the credit profile and verifies the borrower’s bank statement and deposits.
Most loan advancing organizations like this mortgage broker in Edmonton use FICO credit scores to assess the credit report. In the FICO system, there are 5 factors that are considered by lenders when assigning a credit score based on percentages, as shown below. They are: Borrower’s Payment History [Loan applicant’s punctuality in repaying any earlier loan/s] (35%), Credit on various accounts (30%), Length of Payment history [A measure of how long did the applicant take to clear any previous loan/s] (15%), Applicant’s existing credit accounts and how they are used (10%), and New Credit Percentage [Ratio of newly opened credit accounts to that of total number of credit accounts owned] (10%).
Borrower’s chances of obtaining a loan depend heavily on the data disclosed, particularly credit profile, as documented in the mortgage lead. If the borrower has a good credit profile, chances of his or her dream house coming true is greater. When going in for a mortgage loan, the most important question that the borrower needs to ask is Can I afford a mortgage loan. The affordability depends on the mortgage rate. The mortgage rate is expressed as an Annual Percentage Rate and includes the rates of interest and additional fees charged on the loan. All mortgage companies and lending firms are expected to disclose their APR in loan agreements, in accordance with The Federal `Truth in Lending Act’. APR is a convenient parameter to compare the costs of loans or mortgage rates.
The following information is found on: https://www.reca.ca/professionals-learners/industry-101/four-industries/mortgage-brokerage/
A person who deals in mortgages on behalf of another for compensation, or holds oneself out as a mortgage broker, is required to have a mortgage broker licence from the Real Estate Council of Alberta (RECA), unless they are exempt by the legislation.
You do not need a licence if you deal in mortgage on your own behalf or lend your own money.
What is a mortgage?
A mortgage is a loan for the purposes of securing the repayment of the loan.
Activities that require a licence:
- soliciting a person to borrow or lend money secured by a mortgage
- negotiating a mortgage transaction
- collecting mortgage payments
- administering mortgages
- buying, selling or exchanging mortgages, or offering to do so
- holding oneself as a mortgage broker
Groups that do not require a licence:
- subject to regulations, a bank, treasury branch, credit union, loan corporation, trust corporation or insurance company
- an agent or employee of a person referred to in the previous bullet
- an employee of a person dealing in mortgages as a principal while that principal is so acting in a lawful manner and while the employee is acting within the regular course of employment on behalf of that principal
- a member in good standing of The Law Society of Alberta acting in the course of and as part of the practice of law
An individual designs, maintains, and hosts the website for a mortgage brokerage. The website includes information about current mortgage rates, brokerage services, and the contact information for a mortgage broker. These activities are not dealing in mortgages and a licence is not required.
A large multi-national corporation helps its employees by financing their primary residence. A corporation does not need a licence to deal in mortgages when it has a program to provide housing for its employees.
An unlicensed assistant is alone in the mortgage brokerage office and answers calls from potential borrowers. The potential borrowers provide their personal information over the phone—name, address, assets and liabilities, income, etc.—and request the assistant advise them on their ability to qualify for a mortgage. The assistant requires a licence to collect information and provide advice.
John, a real estate industry professional, is good friends with a lending officer at a financial institution. John sold a home to a client and agreed to help him obtain a mortgage through his friend. John negotiates mortgage rates and terms between the lender and his clients. John requires a licence as a mortgage broker to carry out these activities.
Amelia is not a licensed industry professional. Amelia’s son, Michael, wants to buy his first home. He needs a mortgage but does not want to go through a financial institution. She agrees to lend him the money and secure the loan with a mortgage. Amelia does not need a mortgage broker licence because she is lending her own money.
A real estate associate refers his buyer to a financial institution for a mortgage. The financial institution offers to pay the associate’s brokerage a referral fee. The brokerage cannot accept the referral fee because the associate is dealing in mortgages on behalf of that financial institution. If the real estate associate refers his buyer to a mortgage broker that deals with multiple lenders, the mortgage broker may pay the associate’s brokerage a referral fee. In the first example, the associate is dealing in mortgages because they are soliciting borrowers for a specific financial institution. In the second example, the associate is referring the borrower to a mortgage broker who deals with multiple lenders.
When it comes time to select the right mortgage terms that suit your needs the questions sometimes will arise, which is better, Fixed Rate or Variable Rate? First, let’s discuss the differences. A fixed-rate would be the rate that your mortgage would be financed at for the length of the term you choose (see the link to 5-year terms for more info). A variable-rate would fluctuate over that same length of the term. It could go higher, it could go lower, depending upon the economy and markets. So taking a variable rate mortgage is basically a gamble that the economy and markets will not force a rise in interest rates during your mortgage term. Taking a fixed rate is like either gambling that rates will trend upward or else avoid the gamble all together and just be locking into a comfortable and manageable payment for the length of your term.
The interesting thing to note is that over recent decades of watching interest rates go up and down, most of the consumers who have opted for the variable-rate mortgages have saved more money than those who have locked into fixed-rate mortgages! This is pretty amazing although it is no guarantee that this will be true for the future. We still recommend that first-time mortgagees take a fixed rate for simplicity purposes, but do recommend variable rates for those who are financially astute and actively manage their own money, investments, and debts.