What you need to know when dealing with mortgages

January 29, 2015MortgagesNo Comments »

There are risks associated with any type of financial transaction and mortgages are no different.

One of the best ways to avoid these risks is to consult with a licensed mortgage broker so that you can be steered away from possible pitfalls before you sign on the dotted line.

However, you need to be sure that your mortgage broker is licensed and qualified to do the job.

At the end of the day, the financial risk is yours so why commit yourself to paying out for years when with a little prior research you could save yourself thousands?

Always check out your mortgage brokers’ qualifications, experience and the portfolio of lenders they work with before agreeing to work with them.

Questions to ask before signing up with any agent or brokerage company:

  • Are you licensed to broker mortgages?
  • Who do you represent – the lender, the borrower, or both?
  • Do you require me to sign a contract to engage your services?
  • What exactly are your services and how will they benefit me?
  • How much do you charge? Who pays you?
  • How extensive is your portfolio of lenders?
  • Who is your principal lender?
  • How many of the lenders in your portfolio did you actually do business with last year?

Don’t sign any mortgage broker contract without reading and understanding the details in full. If in doubt, ask questions.

Taking out a mortgage will mean lifestyle changes

A mortgage is a serious financial commitment and once you sign will have profound implications for the way you use your money.

  • Don’t over-commit to a mortgage you cannot realistically afford.
  • Think ahead to the long term and only commit to making payments that you know you will be able to make regularly and on time.
  • Don’t forget to plan for unexpected financial emergencies – how will you pay for these if all your available earnings go into mortgage payments?
  • Don’t forget to leave money available for vacations, starting a family, and other goals.

Defaulting on your mortgage will invoke substantial financial loss for you

If you don’t pay your mortgage on time you will be liable for penalty fees and may ultimately default and even have your property foreclosed.

If this happens you could lose not only your home and all the money you have invested to date, but if the home sells for less than you paid for it, you could end up paying out to make up the difference for months or years even after it is sold.

You could also create problems for yourself if ever you would like to take out another mortgage or loan in the future.

A good mortgage broker will help to steer you towards only taking out a mortgage that your financial situation will allow you to comfortably pay.

A mortgage is not the only cost

You will also have to pay legal and appraisal fees, closing costs, land transfer and property taxes as well as pay for moving, home owner association/condo fees, repair/repainting/renovation bills, and more.

Make sure you are clear of the bigger picture of the finances you will need apart from the mortgage to enable this property purchase.

This is where experienced mortgage brokers are worth their weight in gold – a good mortgage agent will help you assess the real financial situation and to decide exactly how much you can realistically and comfortably afford.

Committing to a mortgage may limit other goals

You may need to postpone your vacations, starting a family, setting up a new business or other goals in order to be able to make your mortgage payments. Be aware of your priorities and plan accordingly.

Be aware that property values can go down as well as up

A good mortgage broker knows the history of the market and will be able to advise you if you are paying top dollar or getting a great deal. Be aware of the state of the market before you commit so that you can appraise the potential investment value of the property you are interested in before you buy it.

For more information about mortgage risks and how to plan around them, take a look at the following article:


And for everyone in the Montreal area who is interested in taking out a first mortgage, second mortgage, mortgage renewal, debt consolidation, bad credit mortgage, or for information on other types of secured financial loans, please feel free to contact our experienced, professional, licensed brokers at Best Mortgage Montreal by filling in our easy-to-use online form or by calling:




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