Working With Lenders

Shop for a mortgage in the same way you shop for any other product. Banks, trust companies and other financial institutions are offering more ways to finance a new home purchase than ever before, so it is a good idea doing some checking before you make a final decision. Get information

  • The Internet. Mortgage lenders and insurers offer a wealth of online information about the borrowing process and financing options.
  • Printed information. Most lenders have a wide range of brochures and worksheets. Drop in at local branch offices for copies of these materials.
  • Personal consultation. Make an appointment with a mortgage specialist to discuss your buying intentions and get mortgage pre-approval. A growing number of lenders offer flexible business hours, including evening and weekend meetings.
  • Professional new home builders. Larger companies, in collaboration with financial partners, may offer mortgages to their customers at preferential rates. Mortgage experts may be available in show homes during peak hours. At a minimum, your builder can refer you to lenders.

Choose your lender…

Your relationship with your lender should be based on confidence and personal comfort. You want to get your mortgage from someone who clearly knows the mortgage business. Someone who takes the time to understand your needs and can answer all your questions. Someone who will pre-approve your mortgage and is committed to working with you throughout the buying process.

Don't hesitate to visit several lenders. Ask questions about options, features and services, and compare the answers. Then choose the lender that's right for you.

…or work with a mortgage broker

A growing number of home buyers are opting to arrange their financing through a mortgage broker; currently more than 25% of all mortgages are done this way. Mortgage brokers have access to a wide range of lenders (e.g. banks, trust and life insurance companies, credit unions) and will in essence "shop around" for you for the best possible mortgage to fit your needs. Usually, you will not be charged a fee for this service, as brokers are paid a referral fee or commission by the lender.

Apply for your mortgage

Home buyers have several options when it comes to applying for a mortgage loan. Simple applications can often be made over the Internet, or you can get the process started with a phone call. You may still need to visit the lender or broker in person to finalize the application. Alternatively, they may come to your home to make the process more convenient for you.

Today's mortgage specialists are well trained and well equipped and able to process your application quickly. This reduces the stress and uncertainty of waiting for an answer; in a "hot market", a quick turnaround can be key to getting the home you want. You can often get the results of your application immediately. This may be a conditional approval, pending verification of income, and so on.

If the mortgage represents 75% or more of the value of the home, the loan must be insured against default. A separate application must be submitted to a mortgage insurance company, but electronic networking between lenders and insurers means little or no delay for mortgage customers. In fact many applications are approved on the spot, and the majority within a few hours.

Source: Canadian Home Builders' Association