
FREQUENTLY ASKED MORTGAGE
QUESTIONS
FAQ'S
A mortgage is a type of loan used to purchase real estate, where the property itself serves as collateral. When a borrower takes out a mortgage, they agree to repay the loan amount plus interest over a specified term. If the borrower fails to repay the loan, the lender can take possession of the property through foreclosure.
A mortgage broker is a licensed professional who acts as an intermediary between borrowers and lenders. They help clients find suitable mortgage products by comparing various options from different lenders, guiding them through the application process, and assisting with paperwork. Brokers can save borrowers time and effort in finding the best rates and terms.
Banks are financial institutions that provide a range of services, including mortgages, savings accounts, and investments. They usually have specific mortgage products and set rates.
Mortgage brokers, on the other hand, work with multiple lenders, allowing them to offer a wider variety of mortgage options and help clients find the best rates and terms for their individual needs. Brokers also provide personalized service and expertise in navigating the mortgage process.
Yes, a broker can often help you secure a better rate on your mortgage. Brokers work with a wide network of lenders, giving them access to a variety of options. This allows them to compare rates and find the one that best fits your financial situation, potentially securing lower rates than you'd find on your own.
An insured mortgage is a mortgage that is backed by a mortgage insurance provider. This insurance protects lenders in case the borrower defaults on the loan. In Canada, for example, mortgages with a down payment of less than 20% typically require insurance from the Canada Mortgage and Housing Corporation (CMHC) or private insurers. Insured mortgages often have lower interest rates due to the reduced risk for lenders.
A reverse mortgage is a loan available to homeowners aged 55 or older that allows them to convert part of their home equity into cash without having to sell their home. The loan is repaid when the homeowner sells the home, moves out, or passes away. This type of mortgage can provide seniors with additional income while allowing them to remain in their homes. However, it may reduce the equity available to heirs.
Mortgage renewal occurs at the end of your mortgage term when you have the option to renew your existing mortgage with your current lender, often with updated rates and terms.
Refinancing, on the other hand, involves replacing your existing mortgage with a new one, which can be done with the same lender or a different one. This is typically done to take advantage of lower interest rates, change the mortgage term, or access equity in your home.
The amortization period is the length of time it takes to pay off a mortgage in full through regular payments. This period can range from 15 to 30 years or longer. During this time, your payments will cover both the principal (the amount borrowed) and the interest. A longer amortization period generally results in lower monthly payments but increases the total interest paid over the life of the loan.
A B lender is a type of lender that typically offers mortgages to borrowers who may not qualify for traditional bank financing due to credit issues, self-employment, or other factors.
B lenders usually have more flexible lending criteria but may charge higher interest rates compared to A lenders (traditional banks). They can include credit unions, alternative mortgage companies, and private lenders.
The prime rate is the interest rate that commercial banks charge their most creditworthy customers, typically large corporations. It serves as a benchmark for other interest rates, including those for mortgages and loans. The prime rate can fluctuate based on changes in the economy and is influenced by the central bank's monetary policy.
CONTACT US
Julie Tran, Founder &
Mortgage Broker
778.241.8191
julie@westmortgagegroup.com
June Ellen, Mortgage Broker
& Underwriter




