What’s the Difference between a Broker and a Bank in Grande Prairie?
Choice! Your mortgage broker will help sort through a variety of lenders, to find the lender that suits you best. Different lenders will accept different types of income, have different underwritting policies or different ways of lending. And of course, since we work for you, not the banks – we negotiate a better mortgage rate for you.
Different Lenders Accept different types of income
Have you ever gong to a bank for a mortgage and heard, ” I’m sorry your dream home is out of reach given your income?”. Although you might be out of luck at that bank, it doesn’t mean you should stop trying! There are a variety of incomes that some banks will not use to qualify you for loans. Child tax benefit, rental income, vehicle allowances are just a few types of incomes that not every lender will accept.
Let’s look at rental incomes.
My Home in Grande Prairie has a $200,000 mortgage, so $1250 a month, and I have a lease for $1800 a month.
- Lender 1 – $1700-1250 = $450 x 50% = net rental income $225 a month
- Lender 2 – $1250 x 1.4 = $1750 $1700- $1750 = net rental income $-50 a month
- Lender 3 – Only considers rental income as a valid income with two years history of rental income on T1 general tax documents. You have a good accountant who has made it possible to record a capital loss both years. Averaging out the rental income reported to the govement over two years…. Net rental income $-100 a month.
Given a choice rental property owners would choose Lender 1. “But how do I find out which lender has the best rental income formula?” Well that’s where calling your broker comes in. We spend all week, week after week understanding and learning which lender is best for various situations. Your banker… may be able to expain how they calculate rental income, but they will not have any indepth or accuate knowledge on how the competitors calculate rental income. So call a broker, they specalize in this sort of comparision.
Child Tax Benefit Income
Truthfully there are very lenders who will accept child tax benefit income, but if you need just a little more income to qualify for that dream home we know of a couple that lend in Grande Prairie. The same applies to how much overtime you can use to qualify, or if you can use a vehical allowance. Not every lender accepts ever income type, so trust your broker to find a lender that maximizes and makes use of multiple income sources.
Different Mortgage Types Between lenders
Fixed Rate or Variable? Reverse mortgage or a Home Equity Line of Credit? Manulife One account or a flex down mortgage? Interest Rate adjustible Penalty or three months interest? Open mortgage or closed? Portable? Able to end mortgage term without fee’s if I’m dead?
The Canadian mortgage space has many unique products. One great example is the CHIP Home Equity Reverse mortgage, which can help lower income seniors solve cashflow issue’s. (A senior with lowered income may not qualify under normal refinance programs.) We also have access to flex-down mortgages which can allow a portion of your mortgage to be interest only. Ideal for rental property owners trying to lower borrowing cost’s in the short term.