Mortgage Checklist

If you decide to get a mortgage, it is important to shop around and see what mortgage products and features different mortgage providers are offering. The more mortgages you compare, the greater your chance at getting one that best suits your needs.
 
Note: The term “mortgage” includes all types of debt secured on property (e.g., a house, condominium, land, etc.).
 
To make the most of comparison shopping, you need to know what options are most important to you and have questions prepared to clarify what different options are available. You may wish to ask potential mortgage providers, brokers or agents the following questions:
 
1. What type of mortgage is best for my needs? In particular:
 
  • a fixed, variable or adjustable rate mortgage
  • an open, closed or convertible mortgage
2. What mortgage features and options are best for my needs? For example:

 

  • a short or long mortgage term
  • a short or long amortization period
  • frequent or less frequent mortgage payments (e.g., monthly versus biweekly payments)
  • the ability to make prepayments or lump sum payments (e.g., to pay an extra $200 each month or an extra $2000 per year)
  • the option to transfer my mortgage to another home if I sell my home
3. How will different factors (e.g., frequency of payments, amortization, etc.) influence the total cost of my mortgage?
 
4. What are my options if I cannot make a payment? For example, can I skip one payment per year or apply any prepayments I have made to a current payment that is due? 
 
5. What penalty charges may apply if I want to break my mortgage contract or renegotiate a new one? How are they calculated?  
 
6. Will I have to pay an additional fee if a payment is late? 
 
7. How can I change the size of my mortgage payments?  
 
8. What fees are involved in setting up, discharging or renewing my mortgage? How are they calculated? 
 
9. How can I save on interest charges?
 
You should also come up with additional questions, based on your individual needs and preferences.
 
Getting a mortgage is an important decision. You may want to consider putting together a team of professionals, which could include a real estate agent, mortgage provider, financial adviser, accountant and/or lawyer, to help you with your decision.
 
When you apply for a mortgage, you and/or your spouse or partner will need to provide your mortgage provider, broker or agent with personal information about your finances. It is a good idea to have the following documentation ready:

 

  • confirmation of your income and/or employment earnings
  • your current banking information
  • evidence of your down payment (Note: If your down payment is a gift, you generally need a written letter from the donor stating that the funds do not need to be repaid)
  • a list of your assets and liabilities
  • the full address of the property
  • a copy of the real estate listing, if applicable
  • contract and building plans, if applicable
  • a mortgage preapproval certificate, if one was issued
  • contact information for your lawyer or notary
  • a copy of the agreement of purchase and sale
  • estimates of your monthly housing costs (e.g., property taxes, utilities, etc.)

Note: Different mortgage providers, brokers and agents may require different documentation.

 

Consumers’ Checklist for Mortgage Brokerages, Brokers and Agents

 

If you plan to use the services of a mortgage brokerage, broker or agent, make sure the individual(s) and business are licensed with the Financial Services Commission of Ontario (FSCO)— the government agency responsible for overseeing the mortgage brokering industry in Ontario. To check if an individual or business is licensed to deal or trade in mortgages in Ontario, visit the Mortgage Brokerages, Administrators, Mortgage Agents, and Mortgage Brokers Licensed in Ontario page of FSCO’s website.
 
Note: Some persons or entities are exempt from the requirements to be licensed as a mortgage brokerage, broker or agent, and therefore will not appear on FSCO’s website (e.g., financial institutions such as banks and credit unions, and other persons and entities, such as lawyers, under certain conditions).

In Ontario, mortgage brokerages, brokers and agents are required to:

 
  • Take reasonable steps to ensure that any mortgage presented for your consideration is suitable for you.
  • Indicate in writing whether written information that is disclosed to you, is an estimate, or is based on an assumption.
  • Disclose in writing the material risks of each mortgage the brokerage presents for your consideration.
  • Disclose in writing for whom the mortgage brokerage is acting (i.e., information about whether/when the brokerage is acting for the borrower, the lender, or both, without preference to either the borrower or the lender).
  • Disclose in writing any conflicts of interest that the mortgage brokerage, broker or agent may have in connection with the mortgage.
  • Provide written disclosure of the cost of borrowing. You are entitled to this information at least two business days before you make a mortgage payment, or enter into the mortgage agreement. (Note: Under the Mortgage Brokerages, Lenders and Administrators Act, 2006, this timing requirement does not apply if you consent in writing to waive it before you enter into a mortgage agreement or make a mortgage payment)
  • Disclose whether the mortgage brokerage, broker and/or agent will/may receive any fees, remuneration or incentives from other individuals or businesses in connection to the mortgage, and if so, to whom and how they are calculated.
  • Disclose whether the mortgage brokerage has paid/provided, or will/may pay/provide any fees or remuneration to other individuals or businesses in connection with the mortgage, and if so, to whom and how they are calculated.
  • Disclose whether any fees or other types of remuneration will be received by the mortgage brokerage for referring a borrower, lender or investor to another person or business, and a description of the relationship with the other person or business.
  • Provide all written disclosures to you in plain language.

Mortgage brokerages, brokers and agents cannot require you to:

 

  • Sign the mortgage agreement, without first providing you at least two business days to review it, unless you choose to waive this time period in writing.
  • Make an advance payment or deposit for any services to be provided or expenses to be incurred by the mortgage brokerage, or by any person or business (if your mortgage is $300,000 or less).
  • Get a product or service as a condition for getting another product or service from the mortgage brokerage.
This checklist outlines only some of the things that mortgage brokerages, brokers and agents are required to do. For more information on the requirements of mortgage brokerages, brokers and agents, visit FSCO’s website at www.fsco.gov.on.ca.
 
Note that the disclosure requirements in this checklist apply to the mortgage brokering industry, not financial institutions, such as banks. You may have different rights and responsibilities when getting a mortgage with these institutions.

 
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