In simple terms a mortgage a is a loan that is secured by real estate. The real estate can be a house, townhouse, condo, cabin, bare land and the list goes on. When looking for a mortgage a lender will mainly use the following criteria to determine the mortgage approval: credit, income, equity (aka down payment) and real estate.
Credit is typically reviewed via an Equifax or Trans Union credit bureau report. This is a listing of all of your current and past debts with the payment history, limit and balance showing. This useful tool allows lenders to see how a prospective borrower manages their credit.
Income can come from multiple sources. The simplest form would be a full time hourly or salaried job. There are, however, many other sources of income that are viable when seeking mortgage financing. Self employed, pension, part time and contract income can all be used in various types of mortgages. Peet & Cowan Financial Services broker team are all very experienced in alternate sources of income and funding.
Equity / Down payment
The equity (refinance) or down payment (purchase) determines whether your application will be insured high-ratio (less than 20% down) or conventional (more than 20% down). Less money down brings more strict lending criteria but a Peet & Cowan mortgage specialist can assist in structuring your deal so that it gets approved. The source of down payment has become extremely important to lenders in Canada. Typically any borrower on any product will be asked for a 90 history on their account(s) and large transactions can be questioned. This is due to the Anti Terrorism and Anti Money Laundering rules that institutional lenders must abide by.
Typically most borrowers will be seeking a single family dwelling, a townhouse or a condo/apartment. These are the typical acceptable forms of security to all lenders. Other properties such as leasehold, bare land or mobile homes carry with them some added complication and many lenders will not finance them. Peet & Cowan is well versed in unique property and knows immediately where to go with property that does not fit conventional guidelines. Using a Peet & Cowan broker will save you time and money because you will have an experienced expert working on your behalf.