Question 1

What does a mortgage broker do?

Accepted Answer

A mortgage broker takes one application and compares it across many lenders (8Twelve works with 65+) to find you the best rate and terms for your file. On a standard residential mortgage there's no cost to you; the lender pays us a finder's fee when the mortgage funds.

Question 2

Does using a broker hurt my credit score?

Accepted Answer

Not more than going to a bank. We pull your credit once when you apply and use that report to shop lenders, rather than you applying at several banks yourself. A lender may do its own check before it approves, but mortgage inquiries made in a short window are generally treated as one event by Canadian credit bureaus.

Question 3

How long does pre-approval take?

Accepted Answer

It depends on the lender and how complete your file is. Sending your income documents, ID and down payment proof with the application is the biggest thing you can do to speed it up.

Question 4

How much can I afford?

Accepted Answer

Lenders cap housing costs at about 39% of gross income and total debt payments at about 44%, tested at the stress-test rate (the greater of your contract rate plus 2% or 5.25%). The affordability calculator runs those numbers on your income, debts and down payment.

Question 5

Can I qualify if I'm self-employed?

Accepted Answer

Yes. Lenders look at your business income differently, usually through two years of tax returns and Notices of Assessment, and some have programs built for business owners whose taxable income understates what they earn.

Question 6

What's the minimum down payment in Canada?

Accepted Answer

5% on the first $500,000 of the purchase price and 10% on the portion between $500,000 and $1.5M. Homes priced at $1.5M or more need at least 20% down, because default insurance isn't available above that amount.

Question 7

Should I lock in a fixed or variable rate?

Accepted Answer

It depends on how much payment movement you can live with. A fixed rate keeps the payment and interest cost known for the term; a variable rate moves with prime. Your 8Twelve agent will walk through the trade-offs, including the penalty if you need to break the term.

Question 8

Can I switch lenders when my mortgage renews?

Accepted Answer

Yes. At maturity you can move to another lender without a prepayment penalty, though the new lender will want updated documents and may order an appraisal. Start comparing about four months before your renewal date, since most lenders hold a rate for 90 to 120 days.

Question 9

How much can I borrow if I refinance?

Accepted Answer

Up to 80% of your home's appraised value, minus what you still owe. Breaking a fixed-rate mortgage mid-term usually costs the greater of three months' interest or the interest rate differential, so the penalty needs to be weighed against what the refinance achieves.

Question 10

Do you charge any fees?

Accepted Answer

Standard residential mortgages are free for you because the lender pays us. Some specialty products, such as commercial or private mortgages, may carry a broker fee, and we disclose it up front.

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