Why Use Stonefield Mortgage Brokers in Toronto & the GTA?

A mortgage broker is an independent, licensed professional who acts as the liaison between homebuyers/homeowners and mortgage lenders.

Mortgage brokers in Toronto do not work directly for financial institutions or lend their own money to their clients. Instead, they assess their clients’ financial needs and negotiate the best mortgage solution from their list of lending partners — this may include banks, credit unions, trust companies and private lenders.

As the service of a mortgage broker is usually free to the borrower, there is no downside to engaging with a mortgage broker in Toronto to evaluate your options.

Sure, some folks are comfortable enough shopping around and approaching lenders independently – even if it means sinking time and weekends into the project, driving from bank to bank or remaining on hold for hours. The majority of people, however, like the turnkey option: the experience, expertise and guidance of professional mortgage brokers.

Stonefield Mortgage brokers have a history with many lenders, allowing the opportunity for exceptions to be made. In some cases, incentives like cash back from the lender or covering specific fees can make an offer more attractive than a competitor.

Mortgages can be tricky, and if you’re unclear on the terms and conditions, you could end up paying more than you bargained for. Working with a mortgage broker in Toronto can help you ensure that you find the best possible product and terms that meet your unique needs. Whether that is a higher loan amount, the ability to buy multiple properties, the lowest possible rate or the most flexibility, mortgage agents and brokers know the right questions to ask to find the right solution for your needs.

Working with mortgage brokers and agents in Toronto can help you streamline your efforts and choose the right financial path for you and your family. Working with mortgage brokers in Toronto is beneficial when you’re looking for any of the following mortgage solutions:

• Purchasing a Home
• Second Mortgage Financing
• Renewing a Mortgage
• Private Mortgages
• Low or Bad Credit Mortgages
• Mortgages for Self-Employed Individuals
• Bridge Loans
• Deposit Loans

At Stonefield Mortgage, we work closely with our clients to ensure they have suitable options and can make informed decisions based on their financial needs. We’ll look at your goals and current situation holistically. Then, we’ll work tirelessly to secure great options at great rates. Finally, we’ll collaborate with you to achieve the best possible solution.

The minimum down payment required to buy a home is 5% of the overall purchase price for homes up to $500,000. For every dollar of the purchase price above $500,000, you’ll need to have 10% down. For a purchase price of $750,000, the minimum down payment would be:

 $500,000 x 5.00% ($25,000) + $250,000 x 10% ($25,000) = $50,000.

Any home purchased for $1,000,000 or more requires a 20% down payment. This is $200,000 based on a $1,000,000 purchase price.

Remember that first-time homebuyers are eligible for down payment help through various federal programs, including the Home Buyers’ Plan and the First-Time Home Buyer Incentive. (FTHBI is pending cancellation, yay it wasn’t great anyway!)

When it comes to looking for mortgage solutions, you’ve likely come across the terms mortgage brokers and mortgage agents. Understanding the similarities and distinctions between both terms is an important part of working with mortgage companies in Toronto and the GTA.

A mortgage broker is a mortgage company or an individual with a license to work on mortgages and hire agents under their brokerage. A mortgage agent is an individual who works on behalf of the broker. Both brokers and mortgage agents are licensed by the Financial Services Commission of Ontario and have access to the same lenders. Typically a broker is more experienced than an agent but this is not always the case.

Mortgage default insurance is a mandatory cost for homebuyers with down payments between 5.00% and 19.99% of the purchase price of their home. Often referred to as mortgage default insurance, this additional fee generally ranges between 2.80% – 4.00% of your overall mortgage amount. This type of insurance serves a dual purpose — it makes homeownership more affordable for homebuyers and protects lenders from defaulted loans.

Key Tip: While most of the insurance premium can be added to your loan amount, the tax on this premium is usually due at the closing of your mortgage. If your insurance premium is $15,000, the PST added is 8%, which means that $1,200 would be due (to your lawyer to remit to CMHC) in addition to your down payment.

As with any loan, your credit score can affect your eligibility for a mortgage in Toronto or anywhere in Canada. Canadian homebuyers with a credit score of 700+ are generally considered low-risk candidates and are more likely to be approved for a mortgage with a better rate.

While that’s not to say you can’t obtain a mortgage with a lower credit score, you may be subject to higher interest. Borrowers with credit scores as low as 400 can still get mortgages at affordable rates, but we’d need to demonstrate a plan to improve this score to be offered mortgage products.

If you have a low credit score and are looking for mortgage options, we recommend chatting with us (click that “Book a Call” tab in the top-left corner). We’ve developed numerous workable solutions for Bad Credit or Low Credit Mortgages, and would be happy to help you.

While both will give you an idea as to how much home you can afford, there are some significant differences between pre-approval and pre-qualification:

Pre-Approval

A lender will take a high-level view of your current income, debt and assets and develop a ballpark figure of how much they’d be willing to lend you (an estimate, not a guarantee). A rate hold is one of the most valuable benefits of pre-approval, which may protect against interest rate increases for 90-120 days.

Pre-Qualification

Pre-qualification is an immensely helpful gauge for understanding what you can qualify for and how much home you can afford. The idea is to collect ALL YOUR DOCUMENTATION up front as if you had a live transaction happening now so that we can foresee any issues and give more accurate answers to you. Although having a condition of financing is always safest, pre-qualification is the next best thing we can offer to allow you to assess the terms and products you are likely to be provided by our lenders.

Mortgage affordability is based on multiple factors (or calculations). Some of the most important are:

• Debt Servicing Ratios
• Credit
• Down Payment

What are Debt Servicing Ratios? (GDS/TDS)

 Debt servicing ratios are determined by dividing your monthly debt obligations by your (eligible) monthly gross income.

Gross Debt Service Ratio (GDS)

 Your overall housing costs, including your mortgage payment, condo fees, taxes and heating costs (should be no more than 39% of your gross monthly income).

Total Debt Service Ratio (TDS)

 Your total debt commitment(s), including credit cards, loans and housing costs (should be no more than 44% of your gross monthly income).

Your mortgage lender will look at your GDS and TDS ratios when determining how much you can reasonably afford, and your approval will be based on this amount.

Below is a typical list of required documents to provide when seeking a mortgage pre-approval or pre-qualification from a lender. Not all of these are necessary in every case, so your mortgage agent or broker will request the necessary documents to get the most accurate picture of your profile during the application process.

• 2 pieces of I.D. (one with photo)
• Proof of employment
  • Employment confirmation letter from work, most recent pay stub
• Tax documents, Notice of Assessment, T4, T1, etc.)
• Proof of down payment (and ability to cover closing costs)
• Information about your other assets (i.e. your vehicles, investments)
• Information about your debts
• Information about any properties you currently own (Property taxes, existing mortgages, Rental income)

Those applying for a mortgage in Ontario must undergo a mortgage stress test. In short, the test is meant to ensure you can continue to afford your mortgage in the event of a rate increase. To pass, mortgage applicants must prove they can qualify at the contracted mortgage rate (established by the lender) plus an additional 2% or the Bank of Canada’s conventional five-year mortgage rate (whichever is greater).

While the timeframe will vary based on your unique situation (the documents you’ve provided, the type of mortgage you’re seeking, etc.), a mortgage approval can take anywhere from a few hours to a few days.

Most mortgage applicants choose between a fixed and variable rate loan:

Fixed-Rate

Your mortgage rate is locked in for a fixed term. You’ll pay a set monthly amount despite rising or falling market interest rates.

Variable Rate

Your mortgage interest rate will vary along with market interest rates. This means you could pay less or more than the average fixed rate, depending on current conditions.

Our Toronto mortgage agents can help you understand your options for a home mortgage so you can decide which choice is right for you. Book a complimentary 15-minute call today to learn more about fixed and variable mortgage rates.

Stonefield Mortgage is proud to offer a selection of professional mortgage services in Toronto and the GTA, including:

• Mortgage Refinancing
• Mortgage Renewals
• Second Mortgages
• Buying a Home
• Debt Consolidation
• Private Mortgages
• Self-Employed Mortgages
• Low/Bad Credit Mortgages

Our convenient application process allows us to act as your advocate with mortgage companies in Toronto, ensuring your short-term and long-term financial goals are met.

Schedule a complimentary 15-minute consultation today to learn more about the benefits of working with Toronto’s best mortgage brokers.

At Stonefield, we’re more than mortgage agents and brokers in Toronto — we’re your financial advocates, champions, coaches, guides and cheerleaders all rolled into one!

We understand the importance of affordable and flexible financing solutions. That’s why we communicate directly with Toronto’s top mortgage companies to determine the right mortgage solution for your situation — ensuring you’re only presented with fair rates.

With long-running access to over 40 of the top lenders in Canada, we have the connections and experience to ensure your financial goals are met. And we take a client-centric approach every step of the journey, treating you like collaborators rather than consumers. That’s what sets Stonefield Mortgage apart.

Stonefield Mortgage is proud to be a trusted mortgage broker in Toronto, specializing in simple and efficient mortgage solutions in the GTA. We act as a liaison between our clients and AAA mortgage companies in Toronto.

With over 15 years of industry experience and access to the top lenders in Canada, we have the tools and resources to save you time, money, and effort.

Our mortgage services are available in:

• Vaughan
• Mississauga
• Brampton
• Etobicoke
• Pickering
• Ajax
• Aurora
• Oakville
• Markham
• Richmond Hill
• Scarborough
• Newmarket
• Whitby
• Toronto

Contact us today to schedule a free 15-minute consultation.