Mortgage Information

What is a Mortgage Broker?
A mortgage broker allows the borrower access to all mortgage products, and subsequently the best rates and privileges available ... with no arranging fees for the qualified purchaser.

Why deal with a Mortgage Broker?
Mortgage Brokers represent you, the customer, not the lender. Because they are not employees of a lending institution, Brokers are not limited in the product they can offer you. Brokers seek out the best lender package to suit your specific situation, whether it's with a Chartered Bank, Trust or Insurance Company, or Private Funds.

There is a wide assortment of options and features available to borrowers today. Shopping around takes a lot of time and effort - Many Canadians are intimidated by the mortgage process In today's very competitive marketplace, it pays to work with a mortgage professional who will represent you and ensure the mortgage you get is the one best suited to your needs. Choosing the wrong mortgage can cost you thousands of extra dollars.

If I have poor credit (low credit score or bankruptcy), am I still eligible for a mortgage? Can Rala Investments help me?
Some lenders will consider your mortgage application depending on the circumstances surrounding your bankruptcy and your credit history since the bankruptcy has been discharged. The best way to determine if you can qualify for a mortgage after being discharged from bankruptcy is to call a mortgage consultant.

Rala Investments is skilled and experienced at assisting individuals with poor or questionable credit to secure their dream home and set them on the path to financial peace of mind.

What should I budget for a home purchase?
Before making a home-buying decision, calculate both the one-time and ongoing costs associated with buying and operating the home. As a guide for preparing a budget, consider the following:

Costs associated with the purchase of a home include:
  • Appraisal fees
  • Cost to obtain a survey
  • Land transfer taxes
  • CMHC / GEMICO mortgage insurance (if applicable)
  • Moving expenses
  • Legal fees
  • Home Insurance
  • Property Tax Adjustment
  • Mortgage Fees

What is the minimum down payment required to purchase a property?
The minimum down payment is 0% to purchase a home, subject to maximum price restrictions. However, you must be able to confirm that you can cover costs incurred to close your mortgage. These costs may include legal fees, appraisal fees, survey certificates etc.

What can I use for a down payment?
  • Registered Retirement Savings Plan (RRSP's may be used as a down payment up to a maximum amount of 20,000 and is not subject to income tax if repaid within a specific time period)
  • Gift from immediate family
  • Accumulated savings
  • Sale of existing home
  • Sweat equity

What are the costs of dealing with a Mortgage Broker?
Mortgage Brokers do not always charge a fee for their services, but if a fee is warranted, it is negotiated up front and documented. Fees arebased on the complexity, strength and type of project. They are a one-time only charge, and are quoted once the details of the deal have been examined.

Your investment in the professional services of a mortgage broker/agent is generally returned very quickly, not only in time saved, but also in the quality of the financing received.

Why should I go to a Mortgage Broker first?
A professional presentation to a lender on the first application will get the best response and save you valuable time and money. Secondary applications with previous credit bureau inquiries may be more costly.

Often the success of obtaining mortgage approval depends on the way a proposal is presented and to whom it is sent. Your Mortgage Broker is trained to present your mortgage proposal where and how it will get the most immediate, positive result.

You don't call an insurance company for insurance - you use an insurance broker, because of their expertise, product knowledge and rates. So remember, call your mortgage broker first!

Can Rala Investments help me with both my residential and commercial financing needs?
Rala Investments can place all types of loans provided they are backed by mortgage collateral. All sizes of loans, from small loans backed by a residential property to commercial properties in the millions of dollars, are readily available.

What is CMHC?
Canada Mortgage and Housing Corporation is a federally owned and operated institution that evaluates the client and property to allow the borrower to purchase a home with a lower down payment requirement. This corporation insures the mortgage on behalf of the bank, through a premium added to your mortgage. This way the banks are obligated to provide a mortgage for those with less than a 20% down payment.

Why do I need a property appraisal?
When you are buying a home you will want to know two things, if you are paying the right price, and if the condition of the home is as promised. To determine the value of the home you may need a professional appraisal. If you are taking out a mortgage loan the lender usually requires a professional third party appraisal of the home to determine the lending value.

What is mortgage insurance?
Distinct from mortgage life insurance or home, property, fire and casualty insurance, mortgage insurance provides protection to the lender in the event of a default.

If the amount of the mortgage exceeds 80% of the lending value of the mortgaged property, the mortgage is considered "high ratio". Accordingly, and as required by law, mortgage insurance must be purchased for the full amount of the mortgage. Mortgage insurance is available from CMHC and GEMICO.

How can I save money on my mortgage?
The easiest way to reduce the interest costs on a mortgage is to pay it off sooner. Here are three ways this can be done:
  • Increase Payment Frequency - paying weekly or bi-weekly, rather than monthly, can save a significant amount of interest.
  • Prepay lump sums on your mortgage
  • Increase Payments - mortgage payments can be increased annually

What are 'mortgage terms'?
Mortgages are available with either a fixed rate or variable of interest for various terms, ranging from 6 months to 10 years, with payments amortized over periods of up to 40 years, or variable rate mortgages.