Mortgage Broker Surrey BC

16 Apr

Posted at 15:19h in Mortgage Broker Surrey BC

Planning to apply a mortgage to buy a property in Canada? As a prospective homebuyer, you must be aware of the type of mortgages and rates available in the market to make the right choice. A mortgage broker in Surrey, BC can help you make the right choice by making you understand the ins and outs of the mortgages and the importance of choosing the right rate type.  

There are two main types of rates available, mainly fixed and variable rate that comes with their own advantages and limitations. In this blog, we’ll explore the interest rate options in Canada:

  • Fixed Rate Mortgages

A mortgage approved with an interest rate that stays the same or fixed for the duration of the mortgage or loan period is known as a fixed rate mortgage. This implies that you pay the same proportion of interest on the borrowed money whether you are in the first or the last year of your mortgage term. Fixed-rate mortgages are easier to budget for as you already know the interest rate you are going to pay, making them more predictable.

Advantages of fixed rate mortgages include:

  1. Financial Stability: It is simpler to project monthly payments you need to pay in coming years in advance with a fixed-rate mortgage.
  2. Consistent Rate: The interest rate and monthly payment stay the same throughout the duration of the loan.   
  3. Risk Protection: Since interest rate is fixed, it won’t fluctuate with the market, thereby protecting you from future rate increases.
  • Variable Rate Mortgages

A variable rate mortgage is a type of loan or funding with an interest rate that fluctuates based on the market state or scenario on a regular basis. It usually starts with an initial term which is usually more than a decade, where the interest rate is a little bit lower than it would be for a fixed rate mortgage. When the loan enters its adjustment period, the rate may be changed in accordance with the current market conditions. This can result in an increase in your rate and a larger monthly mortgage payment. Because of this, variable rate mortgages are considered quite riskier.

Advantages of variable rate mortgages include:

  1. Lower Starting Rates: Variable rate mortgages frequently begin with lower interest rates, resulting in lower initial monthly payments and higher purchasing power.
  2. Potential Savings: If interest rates fall, the rate adjustment may result in lower monthly payments and long-term savings, though this is not guaranteed.

Which Mortgage Is Best For You?

Whether you are looking for a residential mortgage or need construction loans in Surrey, fixed rate mortgages have been more popular among buyers, particularly those who want to own their property for an extended period of time. Selecting the right mortgage type needs careful analysis of your financial condition and long-term objectives, including risk tolerance and specific circumstances. If you are looking for a reliable mortgage broker in Surrey to help you with fast mortgage approvals, look no other than Satbir Bhullar.

08 Apr

Posted at 13:07h in Mortgage Broker Surrey BC

Are you on the lookout to find a home? Canadians love buying and switching homes and have a deep love for mortgages too. With the rising mortgage rates and the changing mortgage pricing, the big question that often arises is how much can you afford to borrow or are eligible to mortgage.

Here’s a brief overview of key factors that impact mortgage affordability in Canada as explained by a Surrey mortgage broker:

  • Gross Debt Service (GDS) & Total Debt Service (TDS) Ratio

Followed by leading mortgage default insurers like CMHC, Genworth, and Sagen, the GDS that includes your housing costs, including the mortgage principal, interest rate, property taxes, and heating costs should not exceed 30%. Similarly, the TDS that includes car loans, credit card payments, and other debts must not exceed 44%. 

A minimum credit score of 680 is needed to meet the GDS and TDS requirements. Even a slightly low credit score of 600 – 680 may work.

  • Rising Interest Rates

Your monthly mortgage payments may be considerably impacted by even a slight increase in interest rates. When planning to apply for a mortgage, it’s critical to understand how any recent developments in the interest rates and any prospective future changes can impact your scope of qualifying. Before applying for a new mortgage, adding the stress test could mean the difference between getting approved or not.

  • Housing Location

The cost of housing varies greatly throughout Canada, thanks to some highly developed cities. Compared to smaller cities and sub-urban places, buying a home in hot markets like Toronto & Vancouver may mean spending fortunes. A standard proverb that’s still influencing Canadians to make mortgage leaps is “Drive till you qualify.” Given the ability to work remotely, many Canadians are now following the mortgage plan that meets their budget needs rather than accessibility.

  • Down Payment Criteria

Your monthly payments and the amount you need to borrow are directly impacted by the size of your down payment. A larger down payment decreases the total amount of your loan and your monthly mortgage payment. The required minimum down payment is 5% for homes under $500,000.

You’ll require mortgage default insurance, which will incur additional costs, for down payments of less than 20%. In addition to borrowing more money when you make a down payment of more than 20%, you can also extend the amortization period to 30 years and look for other options from lenders who can provide more affordable payments.

So, these were some factors that may impact your mortgage affordability in Canada. Make sure you increase your mortgage affordability by:

  • Boosting Your Income
  • Reducing The Debt
  • Saving On Insurers
  • Shop Around for Rates

Bottom Line

Affordability is important, but keep other things in mind too. Consider upcoming costs such as property taxes and upkeep. Evaluate your lifestyle realistically to find out how much space you actually need.

If you are looking for a professional mortgage broker in Surrey, BC to help you out, talk to our mortgage experts at Satbir Bhullar. We can help evaluate your financial status, suggest appropriate mortgage products, and take you through the pre-approval procedure. It’s better to choose a home that comfortably fits inside your budget and meets your housing expectations at the same time.

For more information on mortgages, schedule a detailed consultation with our experts.

 

12 Mar

Posted at 15:07h in Mortgage Broker Surrey BC

Embarking on a construction project, whether building your dream home or renovating an existing property, can be an exciting yet daunting endeavor. 

One crucial aspect of such projects is financing, and this is where construction loans come into play. If you’re in Surrey and considering undertaking a construction project, understanding the fundamentals is essential. 

In this guide, we’ll dig into the basics of construction loans Surrey, the types available, and what you need to qualify for one.

 

Types of Constructional Loans

Constructional loans come in various forms, each tailored to meet specific needs. Here are some common types:

Construction-to-Permanent 

This type of loan transitions seamlessly from the construction phase to a traditional mortgage once the project is completed. It simplifies the financing process by combining both phases into one loan.

Construction-Only 

As the name suggests, these loans cover only the project’s construction phase. Once the construction is complete, borrowers must secure permanent financing separately.

Renovation 

If you’re looking to renovate an existing property, a renovation loan could be the ideal solution. These loans provide funds to cover the costs of renovation and repairs.

Owner-Builder 

Designed for those who want to act as their general contractor, owner-builder loans offer financing for self-build projects. However, they often come with stricter qualification requirements and additional responsibilities.

 

What Do You Need to Get a Home Construction Loan?

Securing a construction loan typically requires meeting specific criteria and providing documentation demonstrating your ability to repay the loan. Here’s what lenders usually look for:

  • Good to Excellent Credit: A strong credit score is crucial when applying for a construction loan. Lenders want to ensure that you have a history of responsible financial behavior.
  • A Good Debt-to-Income (DTI) Ratio: Lenders assess your DTI ratio to determine your ability to manage additional debt. A lower DTI ratio indicates that you have sufficient income to cover your existing debts and the proposed loan payments.
  • Necessary Documentation: Be prepared to provide documentation such as detailed project plans, construction estimates, proof of income, and financial statements.

 

You Might Consider a Construction Loan If:

  • You Want More Design Flexibility: Unlike purchasing an existing home, building from scratch allows for greater customization and personalization according to your preferences.
  • You Want to Add More Later: Construction loans Surrey offer the flexibility to incorporate additional features or expand the property during construction.
  • You Want More Land: If your dream home requires a specific location or a larger plot of land, a construction loan can help finance the acquisition and development.

In Surrey, navigating the complexities of construction loans can be made easier with the assistance of a knowledgeable mortgage broker. A reputable mortgage broker in Surrey, such as Satbir Bhullar, can guide you through the process. We will help you find the right loan product and lender to suit your needs.

In A Nutshell

Construction loans are a valuable financing tool for individuals embarking on construction projects in Surrey and beyond. Whether building a new home, renovating an existing property, or undertaking a self-build project, understanding the nuances of construction loans is essential for a successful outcome. 

By familiarizing yourself with the types of construction loans available, the qualification criteria, and the role of a mortgage broker in Surrey, you can confidently navigate the journey towards turning your construction dreams into reality.

06 Mar

Posted at 13:56h in Mortgage Broker Surrey BC

In the homeownership journey, navigating the complex world of mortgages can be daunting. From understanding various loan options to finding the best deals, it’s easy to feel overwhelmed. 

This is where a Surrey mortgage broker steps in to simplify the process and help you secure the keys to your dream home. But what exactly does a mortgage broker do, and how can they benefit you? 

Let’s explore the intricacies of their role and how they operate in the bustling real estate market of Surrey, British Columbia.

Here we go!

What is the Difference Between a Mortgage Broker and a Lender?

To comprehend the role of a mortgage broker, it’s essential to distinguish between them and lenders. While lenders are financial institutions that provide the funds for a mortgage, mortgage brokers are independent professionals who act as intermediaries between borrowers and lenders. 

However, understanding the distinction between a mortgage broker and a lender is crucial for anyone looking to secure a mortgage. Here’s a breakdown of their roles:

Mortgage Broker

  • Acts as an intermediary between borrowers and lenders.
  • Offers access to a wide range of loan products from various lenders.
  • Works to find the best mortgage terms and rates tailored to your needs and financial situation.
  • Provides personalized guidance and support throughout the entire mortgage process.

Lender

  • Provides the funds for the mortgage.
  • Offers specific loan products and rates directly to borrowers.
  • Typically, operates under stricter lending guidelines compared to brokers.

 

Which Option Helps You Find The Better Deal For Your Personal Objectives?

When it comes to finding the best deal for your personal objectives, working with a Surrey mortgage broker often proves advantageous. Here’s why:

  • Access to Multiple Lenders: Mortgage brokers have access to a vast network of lenders, including banks, credit unions, and private lenders. This enables them to shop around and negotiate the most favorable terms and rates on your behalf.
  • Expert Guidance: Mortgage brokers possess in-depth knowledge of the local real estate market and lending landscape in Surrey. They can provide valuable insights and recommendations tailored to your unique financial goals and circumstances.
  • Saves Time and Effort: Instead of individually approaching multiple lenders, a mortgage broker streamlines the process by handling all the legwork for you. This not only saves time but also eliminates the hassle of navigating complex paperwork and negotiations.

 

Mortgage Broker Cost: How Do They Get Paid In Surrey?

One common concern among prospective homebuyers is the cost of hiring a mortgage broker. In Surrey, mortgage brokers typically get paid through one of the following methods:

  • Commission from Lenders: When a borrower successfully secures a mortgage through a broker’s assistance, the lender pays the broker a commission. This commission is based on the loan amount and terms, but it is typically covered by the lender and not passed on to the borrower.
  • Broker Fees: While most mortgage brokers in Surrey operate on a commission basis, some may charge additional broker fees. These fees can vary depending on the broker and the complexity of the mortgage transaction. However, it’s essential to clarify any potential fees upfront to avoid surprises later on.

 

Conclusion

In the competitive real estate market of Surrey, British Columbia, a mortgage broker plays a pivotal role in helping prospective homebuyers navigate the mortgage landscape with ease and confidence. By leveraging their expertise, extensive network, and personalized approach, mortgage brokers empower individuals to make informed decisions and secure the best possible mortgage terms and rates for their dream homes. 

So, whether you’re a first-time homebuyer or a seasoned investor, partnering with a reputable mortgage broker Surrey BC can make all the difference in achieving your homeownership goals.