1. Frequently Asked Mortgage Questions

Frequently Asked Mortgage Questions

Kelowna Mortgage Brokers Blue Ellipse logo

Applying for a mortgage shouldn’t be hard or confusing,
let’s break this down and make it simple for you!

What is a reverse mortgage?

Reverse Mortgages are a type of lending that allows you access to up to 55% of the equity in your home, without having to sell or make regular payments.

What can I use the money from my Reverse Mortgage for?

The money from your reverse mortgage can be used for anything you choose, some examples are: covering medical expenses, consolidating debt, buying another property, renovating an existing property, or supplementing retirement income.

What are the requirements for a reverse mortgage?

Homeowners must be 55 or older and live in a province of Canada, the appraised value of their home must be at least $150,000 and the secured debt must be less than the reverse mortgage lending amount they are approved for.

Is it easier to get a mortgage through a mortgage broker?

In almost all cases, brokers make it easier to get a mortgage. You get:

  • The best selection of mortgage rates
  • More mortgage lending options
  • A full range of expert mortgage advice in one place
Is it cheaper to get a mortgage through a mortgage broker?

There’s no guarantee that it’ll be cheaper, but the better mortgage rates available through a broker can certainly translate into a lower monthly mortgage payment compared to what you’d get from the big banks. Here in Kelowna, we often help our clients get better mortgage rates than the retail rates offered by their banks. So, if you’re looking for a mortgage in Kelowna, take the time to contact us and get access to the best rates!

Can I only get a mortgage if I’m buying a home?

Nope! There are different types of mortgages, like vacation and rental property mortgages or construction mortgages that are ideal for supporting personal investments or business expansion. Even in Kelowna’s medium-sized community, we regularly get asked about mortgages for business purposes, so if you’re looking for lending to support something other than a home purchase, we can help recommend a suitable mortgage.

Are there any costs to get a Reverse Mortgage?

There are one-time fees for arranging a reverse mortgage, such as the appraisal fee, fee for legal advice, and fee for administration and registration.

Beyond that, there are no monthly payments required as long as the homeowner continues living in the home.

Are reverse mortgages risky?

No, in fact reverse mortgages are often recommended by financial professionals as a means of supplementing income instead of relying on a line or credit or mortgage.

Can I get a Reverse Mortgage if I owe on my current mortgage?

That’s ok! Reverse mortgages are commonly used to supplement income or pay off expenses such as an existing mortgage.

Do I lose ownership of my home with a Reverse mortgage?

You will retain full ownership and title of your home, though you are expected to live in the home and maintain the property, staying on top of property taxes and insurance.

How do I receive the money from my reverse mortgage?

You get to choose how you want to receive the money, either in one lump sum or through planned advances over a set period of time.

Do mortgage brokers work for the bank or a financial lender?

Neither! A mortgage broker has a portfolio of lenders they work with to meet their clients’ mortgage needs. That’s one of the chief reasons brokers help their clients get better deals – unlike banks or other financial institutions, brokers are looking to help you get the best deal on your mortgage, not fill up a target mortgage product quota.

Why is a mortgage insurance premium necessary?

Regardless of mortgage rates, if a down payment is less than 20% of the home or property value, mortgage insurance is mandatory in Kelowna (and across Canada). Mortgages have built in insurance premiums, so, therefore, the clients do not pay “out of pocket” for this expense. For mortgage lenders, a down payment of this size is more of a risk, so the mortgage insurance premium acts like a guarantee in the event of a default on the loan.

What is mortgage life insurance?

Mortgage life insurance provides coverage that would pay off in the event of death or disability of the home owner. Contact our office in Kelowna for more information and to find out about your mortgage life insurance options.

Can I transfer my mortgage if I buy another home?

Depending on your mortgage lender, yes. Most lenders are now offering options that allow you to take (or “port”) your mortgage with you. Typically you will not be assessed additional fees if the possession period between your old and new home is 60 days or less.

What minimum down payment do I need?

You can provide as little as 5% of the total price of the home if you have good credit. Even if you have poor credit, we have a network of lenders that are willing to work with poor credit buyers, providing you have a 15-35% down payment.

Does paying bi-weekly actually save me money or shorten my amortization time?

It does! With a monthly mortgage, you’ll make 12 regular mortgage payments annually. When you pay bi-weekly, you’ll make 26 half-payments, amounting to 13 regular mortgage payments annually.

That might not sound like much, but it adds up. A bi-weekly payment schedule could make you mortgage-free years sooner, saving you thousands in interest payments to boot!

Our bi-weekly payment calculator can give you more details.

What benefits do I receive for mortgage pre-payments?

Pre-payment typically allows you the following privileges:

  • Ability to increase your monthly payment (usually by 15-20%). Keep in mind that you cannot decrease your payments.
  • You are allowed to pay a percentage (usually 15-20%) of your principal per year.
  • You may be able to double your mortgage payment for a month or a number of months. Remember that you are not allowed to exceed the percentage that you’re permitted to pay down annually.
Why is an appraisal necessary?

Every conventional mortgage that includes a minimum 20% down payment requires an appraisal because the mortgage is uninsured. The lender wants to see that your purchase price is in line with the property’s fair market value. Lenders want to see that you are purchasing a quality property and that they will be able to recuperate the full amount if you default on the loan.

Should I consider a mortgage to help with debt?

Yes. In fact, this is a common use of a mortgage loan. Many of our customers obtain a mortgage to consolidate credit card debt, renovate their kitchen, or invest.

How much should I consider spending on a home?

Most mortgage lenders allow you to spend no more than 32% of your monthly income on your mortgage, and newer guidelines allow up to 44% of your monthly income for mortgage payments and other debt payments. Our mortgage calculators can help you determine your affordability.

I’m self-employed and cannot prove my income. Can I still get a mortgage?

Yes! Some lenders use your stated income only to qualify, on approved credit. You still get favourable Canadian mortgage lending rates and, depending on the lender, could get up to 90% financing. Simply complete your Kelowna mortgage application today!

Is it really safe to apply for a mortgage online?

Yes, Rampone-Marsh uses secure software for all their applications.  Applying for a mortgage online with Rampone-Marsh Mortgages is safe and secure. Our online application uses a 128-bit SSL (Secure Sockets Layer) server, that is verified secure by Verisign/RSA. This is the exact same type of system and software that most large banks use to secure your online banking

Why should I get a pre-approved mortgage?

There are several benefits to getting a Pre-Approval before you start searching for your next home.

  • Your mortgage rate will be secured for 120 days. Even if rates go up, yours won’t.
  • You’ll know what you can afford, helping to narrow down the search process.
  • Pre-approval will make you look like a more serious buyer, helping you find a good realtor and can give you negotiating power with the home seller.
  • A mortgage pre-approval will make the final closing faster since you already have most of the work completed.
Can I make my down payment with gifted money?

In most cases, the answer is yes. However, the funding must be from a family member. There are certain circumstances in which you cannot use gifted funds. For example, your mortgage product may have a limit on the percentage of the down payment that can be gifted. Rampone-Marsh Mortgages can find out if your gifted funds can be applied to your down payment.

What are Fixed and Variable rates?

In a Fixed Rate Mortgage, the interest rate is fixed for a specific amount of time. This period of time (the mortgage term) can range anywhere from 6 months to 10 years. Over the course of the mortgage, less of the payment counts toward interest and more toward the principal.

A Variable Rate Mortgage is one in which your interest rate will fluctuate with the Bank of Canada’s prime lending rate.. When rates go up, a larger portion of the payment goes toward interest. When rates go down, more of the payment goes toward principal.

My bank declined me. Can I still get a mortgage?

It’s possible. After we analyze your own situation we’ll discuss what possibilities are available to you. However, lenders that deal with non-standard credit usually charge a higher rate than normal bank approved credit.

What makes Rampone-Marsh Mortgages unique to other Mortgage Brokers?

The brokers at Rampone-Marsh Mortgages provide a higher level of service and see value in knowing our clients. We take the time to present you in the best way to the lenders. We are reliable and have a long history of providing great consistent services to our clients. We are your mortgage advisors. We provide the lowest rates that we can find for all of our clients. Roughly 90% of our business is generated because people who have used our services tell others to use our services. We are locally owned, and connected to large national partners.

Why should I choose a Mortgage Broker at Rampone-Marsh Mortgages instead of a bank?

Most banks focus on such a wide variety of projects and cross selling opportunities that their staff training is diluted and not focused. At Rampone-Marsh Mortgages, we provide excellent mortgage services for purchases, refinances, renewals and the list goes on. We know mortgages inside and out, and best of all we do all of the legwork! In most cases, our services are free and we have access to over 50 lenders.

What kind of clients do Mortgage Brokers work with?

Rampone-Marsh Mortgages works with homebuyers and homeowners from many walks of life.. These clients include:

  • First time homebuyers
  • Existing homeowners
  • Credit challenged homeowners
  • Self-employed Borrowers
  • Construction mortgages
  • Vacation properties
  • New to Canada 
Who are the mortgage lenders that you use?

We deal with Canada’s top lending institutions, such as Scotiabank, TD, MCAP, and First National, just to name a few.

I’ve heard that the more times I get my credit checked, the lower my credit score will be. Is this true?

Yes, the amount of inquiries to your credit bureau report can affect your credit score. One of the advantages of using The Mortgage Centre – BC Direct Mortgages is that we check your credit bureau report only once, and we are able to take your application to more than one lender without doing multiple credit checks.

If I choose a mortgage with a lender that is not my bank, do I have to change my bank account?

No, lenders simply require a void cheque to take the payments from your existing bank account.

Why use a Mortgage broker instead of my bank?

When you work with your bank, you get one choice- the one they offer you. But there are plenty of other lenders out there that may be able to offer you a product or rate better suited to your unique needs. Every bank says they have the best product or rate, but it’s just not possible for everyone to have the best.

Rampone-Marsh Mortgages is an independently owned Mortgage Brokerage that works for you. Because of our network of lenders, we’re able to present you with a range of choices, allowing you to select the best option. Lenders compete for your business, so you get the best deals. Best of all, you’ll have an experienced mortgage broker to help you make sense of your choices and understand the variety of products and how each one could benefit you.

What does a Mortgage Broker charge?

Typically there is no charge. Our fee is paid by the lenders we secure your mortgage through, not you. In special “credit challenged” circumstances, depending on the length and amount of the loan, we may have to charge a fee. However, we don’t charge our clients in the majority of cases.

What does a Mortgage Broker do?

A Mortgage Broker seeks out financing options for their clients. In other words, they facilitate the mortgage transaction between you and a Lender. Basically a Mortgage Broker offers advice, options and choice.  .They take care of the legwork of searching for the best mortgage product and interest rate by utilizing their network of lenders and financial institutions.

How long does the mortgage process normally take?

If we are able to get the necessary documentation, we might be able to get an approval in as little as 24 hours. Keep in mind, the longer it takes for us to receive your documents the longer your approval will take to secure. Take a look at our mortgage checklist, for a summary of what you’ll likely need to provide.

Are you Accredited?

Accredited members of Mortgage Professionals Canada & Mortgage Brokers Association of BC.

What is a down payment?

Part of the purchase price of a property that is paid in cash and not financed with a mortgage.

What is a credit report?

A report detailing an individual’s credit history that is prepared by a credit bureau and used by a lender to determine a loan applicant’s creditworthiness.

What are closing costs?

These are expenses over and above the price of the property that are incurred by buyers and sellers when transferring ownership of a property. Closing costs normally include an origination fee, property taxes, charges for title insurance and escrow costs, appraisal fees, etc. Closing costs will vary according to the area country and the lenders used.

What is an appraisal?

A written analysis prepared by a qualified appraiser and estimating the value of a property. The Appraised Value is an opinion of a property’s fair market value, based on an appraiser’s knowledge, experience, and analysis of the property.

What is equity?

The amount of financial interest in a property. Equity is the difference between the fair market value of the property and the amount still owed on the mortgage.

What is an earnest deposit?

This is a sum of money given to bind the sale of real estate, or a sum of money given to ensure payment or an advance of funds in the processing of a loan.

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Yeaaaaah mortgage!

There are other fantastic home mortgage products Rampone-Marsh can provide you with: second mortgages if you want to buy a second property, third mortgages and many more.

Just contact us, tell us what you need and we will deliver.

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