1. Frequently Asked Mortgage Questions

Frequently Asked Mortgage Questions

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

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 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 involved?

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.

What if I still owe money on my current mortgage?

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

Will I lose ownership of my home?

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?

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

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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.