Constant changes in the mortgage market can confuse borrowers

In securing a mortgage in today’s market, borrowers face challenges from constantly changes conditions and only partial explanations in the media.

If you’re a first-time homebuyer, it can feel like you need to jump through a series of hoops just for a shot at getting an approval. And for those of you approaching a mortgage renewal, perhaps staying with your existing lender is something you choose to do out of necessity and ease rather than by choice, or it is unclear when to seek a renewal and how changes to rates are best navigated.

But it doesn’t have to be that way.

There is a place beyond the banks that’s all about making the mortgage process work harder for (not against) you.

We’re talking about building a relationship with a mortgage broker.

And yet if your bank still tends to be top of mind when it comes to mortgage matters, you wouldn’t be alone. As evidence, only 39% of first-time homebuyers have a poor understanding of what brokers actually do or how they can help (that’s according to the Mortgage Professionals Association of Canada).

But what could make a broker the optimal choice for your mortgage needs over the banks?

Well, how about a better interest rate for starters.

While your bank might be positioned to dig deep into their coffers to offer you their most competitive rate—that doesn’t necessarily translate to the lowest out there.

That’s because mortgage brokers have access to a far greater catalogue of lenders.

It’s the kind of scale that enables brokers to source rates that are truly the lowest available at the time. And if your cash flow is already tight as is, even a few basis points can make a really big difference.

Still feeling unsure about going from a bank to a broker? Perhaps this will help ease your mind.

One of the biggest perks mortgage brokers enjoy for doing business with such a large roster of lenders is the fact they get volume discounts. These discounts span all the way from local credit unions to the biggest banks in the country. This enables brokers to secure rates that are usually lower than what you’d be able to negotiate yourself—even from your own bank.

In addition, brokers have the capacity to assist if you require special financial considerations.

For example, if your contract is only part-time (i.e. occasional teacher, support staff, etc.) or if you’ve ever had credit issues in the past, mortgage brokers also have access to alternative (or ‘B-type’) lenders. This allows them to search every corner of their network to secure a mortgage you perhaps wouldn’t have been able to find, let alone ‘lock in’ on your own.

That’s because to a mortgage broker, you are their first priority.

Although the mortgage specialist at your bank might make you feel special—the bank has shareholders to satisfy by making the most money possible. They have skin in the game, so to speak.

At Educators Financial Group, our accredited mortgage professionals have your best interests at the forefront as we are not a publicly traded company.\

Not sure how to go about haggling for the lowest rate with a mortgage specialist at your bank?

Your mortgage broker will do the negotiating for you with a multitude of lenders.

Uncertain about how much mortgage you can afford based on your budget or the stress test?

Your mortgage broker is a fully trained professional who can work it all out and more.

That’s because in addition to completing provincially regulated training, mortgage brokers are also required to continually take professional development courses in order to maintain their status and at Educators Financial Group our brokers carry an AMP (Accredited Mortgage Professional) designation which also requires continuing education components.This means they are always up to speed on all of the many rules and regulations regarding mortgages.

Take the stress test, for instance.

“It’s a thorn in the side for first-time and existing homebuyers alike,” says Chris Knoch (Educators Mortgage Agent Level 1 – Director of Lending Services). “With interest rates are continually in flux, first-time homebuyers can end up confused as to how much house they’re able to afford. Existing mortgage holders, on the other hand may not investigate their options 120 days before their mortgage matures and were at a competitive disadvantage because of the stress test but recent government mortgage rule changes have helped empower them with more options. Twhat separates us mortgage brokers from the banks. From changes to the stress test to interest rates and beyond, we go the extra mile to help education members make sense of it all.”

Speaking of the stress test, there’s good news on that front for those with uninsured mortgages.

Starting November 21, 2024, the Office of the Superintendent of Financial Institutions (OSFI) will remove the requirement for lenders to apply the Minimum Qualifying Rate (aka ‘stress test’) to straight switches of uninsured mortgages. This means that if you originally put a down payment of 20% or more, you’ll soon be able to switch from one lender to another, sans stress test.

Other notable mortgage policy changes to have on your radar beginning December 15, 2024:

• The federal government is raising the price cap for insured mortgages, increasing the limit from $1 million to $1.5 million. This means that clients qualify for lower tiered rates up for a purchase up to $1.5 million and they only need 5% of the purchase price for the first $500,000 and 10% for the remainder of the purchase price up to $1.5 million. As an example, a purchase of $1,499,999 would now need a down payment of $124,999 where prior to December 15, 2024, it required a down payment of $299,999.
• Another important change is the expansion of 30-year amortization periods for insured mortgages (less than a 20% down payment utilized). The extended amortization option will now be available to all first-time homebuyers and also for those purchasing new builds, provided the loan-to-value ratio is 80% or higher.

Don’t have time to stay on top of all of the ever changing mortgage policies and interest rates fluctuations?

At Educators Financial Group, we’re here to help. As a brokerage, we have access to a sea of lenders—putting us in a prime position to find you your best rate.

But we’re not just any brokerage.

As a financial institution dedicated to serving members of the education community (something we’ve been proudly doing since 1975), we can provide you with specialized mortgage products and advice based on where you are on the pay grid or what your pension income is like in retirement.

So, whether you’re shopping around for your first mortgage, coming up to renewal time, or thinking about purchasing a property, count on our team of professionals to help find you the right mortgage to suit your specific needs and budget.

Reach out to discover the difference of an educator-specific mortgage broker

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