Q. What is meant by mortgage term?
Term is the difference between the start and maturity date of the mortgage. You can choose terms of just 6 months, 1, 2, 3, 4, 5, 7, 10 or even a 25-year term. At the end of the term you can either pay off your mortgage, or renew with the same lender or another lender at terms of your choice.

Q. What is better - short-term or longer-term mortgage?
The usual thinking is that you should take a longer-term to lock in low interest rates; when interest rates are higher, you should look to a shorter term - 6 mos. or 1 year. Whenever the interest rate spread between short term and a long-term mortgage rates are significant it is always better to take the shortest term possible. Currently, rates are historically very low, so most people are locking in for terms of 5 or even 10 years.

Q. What is meant by amortization?
The amortization period is the number of years it takes to repay your mortgage in full. Often when you first get a mortgage it is amortized over 25 years. This means that if you maintained those terms and payment periods, your mortgage would be paid off in 25 years. However, in most cases the amortization period changes because different borrowing terms, interest rates and payments against the principal amount at each renewal vary the length of time required to pay off the mortgage. For example, going with a shorter amortization period - say 15 years for example - will result in higher payments per period, but save you money in interest by enabling you to retire your mortgage sooner.

Q. What is the difference between a fixed and variable rate mortgage?
Fixed rate means that the rate of interest charged for the term of your mortgage is a set amount and does not change over the term of your mortgage. A variable rate mortgage is one in which the rate of interest will fluctuate in accordance with a bank trend setting rate. This is typically the bank prime rate. Adjusted on a predetermined basis, usually monthly, the rate can be set below, equal to or above the trend setting rate and will move up and down accordingly with that rate. A drop in interest rates will mean that more of your mortgage payment will go towards reducing your mortgage principle. If interest rates rise then less money will be used for reducing your principle and will instead be taken up in the higher interest costs. If you think interest rates will fall over the next 3 to 5 years then purchasing a variable mortgage would make sense.

Usually fixed rate mortgages will cost you more since the lender is unprotected from the possibility of future interest rate increases. You generally pay less for a variable rate mortgage because it is you that is taking the risk of uncertainty as to how interest rates will move - up or down.

Q. What if I have variable interest rate mortgage and interest rates start to rise?
Most variable mortgages give you the right to switch to a fixed rate at any time, with no charge. If you think the interest rate rise is a long-term trend then you would exercise the option and switch to a fixed rate.

Q. It is possible to negotiate a better mortgage rate?
Often it is possible to get an additional ½ to 1% off the lender’s posted ‘best available’ rate, if you know how to go about it. Using a mortgage consultant allows you to effectively ‘shop around’ for the best rate among competing lenders. Often mortgagees will bid against each other when a buyer is represented by a consultancy service. And when you use a mortgage consultant, only a single credit report will be necessary.

Q. What is a high ratio mortgage?
A mortgage for more than 75% of the property value. Whenever you need a mortgage loan that is greater than 76% to 90% of the current market appraised value of your home it is considered a high ratio or insured mortgage. If you are a first time home buyer then you can borrow up to 95% value and only need to come up with a 5 percent minimum down payment. The Canada Mortgage and Housing Corporation (CMHC) insures the lender in case you default on your loan. You must pay for this insurance premium which is usually tacked on top of your loan. If the lender feels that you are still a risk for default even though you have paid more than 25% down the lender can insist that you insure the mortgage anyway. However, in this situation a mortgage consultant would probably shop this mortgage to a lender that didn’t insist on insuring. The fees for CMHC can be as high as 2.5% of the mortgage principal but is often not noticed by a borrower because of being added to your mortgage principal. Rates for a high ratio loan vary widely between lenders so it is best to use a mortgage consultant to explore the best options for you.

Q. How much better off am I with weekly vs. monthly payments?
Despite popular belief, and a lot of vendor marketing, the advantages in weekly vs. monthly payment frequency is slight. It is not really the frequency that makes a big difference but how much you pay. Any extra payment towards your principal dramatically improves your amortization period. Think payment amount not frequency of payment.

Q. What is the advantage of a pre-approved mortgage?
The purpose of a pre-approval is to confirm in writing the maximum amount of money that you can rely on for mortgage purposes. When interest rates are fluctuating, it’s an advantage to know what your borrowing limit is before you start house hunting. With a pre-approval, a lender will guarantee you for a specific mortgage amount for a period of time. If the mortgage interest rate drops before the lender advances the funds for a mortgage, you are given the lower rate. If the rates rise, you are given the rate at the time you had the mortgage pre-approved.

Q. What sort of lenders do mortgage consultants usually deal with?
Mortgage consultants typically do business with the leading lenders, including the chartered banks and mayor financial institutions. Ask us your question! Fill out the contact form and e-mail us your question, we’ll respond promptly with an answer from one of our mortgage consultants.

Q. How long can I expect to wait until I hear from a mortgage broker/lender?
If you do not hear from the recommended mortgage professional within one business day, please contact the professional directly.

Q. My credit record is not too impressive. Can I still get a loan?
Yes you can! Three Star Financial specializes in helping consumers with all types of credit - good and bad, find a mortgage loan to meet their needs. We search our nationwide network of mortgage professionals and put you in contact with the one best suited to help you find the right type of home financing. Having bad credit is not a problem. And you need not pay the highest rates.

Q. What do you charge for this service?
Absolutely nothing to you! There are no fees associated with the service, nor are your obligated to work with the recommended Three Star Financial member; however, we encourage you to review the offer carefully. Our match is the result of an extensive search of thousands of loan programs in your area and throughout the United States.

Q. What if I cannot afford a home? How can you help?
Shopping around for home financing will help you get the best deal. The best place to start is with a Three Star Financial recommended broker / lender. It's free, there's no obligation, and a mortgage broker / lender can help you explore all the options of homeownership. If you feel you can't afford a home, think again. Homeownership is just as affordable as renting - in some cases even more affordable. A mortgage is a product, and the price and However, while mortgage brokers research many lending sources, it would be nearly impossible for them to access every single lender and every mortgage product, simply because there are thousands out there. That's where we come in. Our large network of mortgage professionals overcome this problem. Which means you get the best offer possible.

Q. Will I have to pay more for my loan if I get it through a broker?
Not necessarily, though the broker does perform a service for which he or she receives a fee. When a broker processes the paperwork on a loan, it costs less for the lender to make the loan. Therefore, lenders often discount loans to brokers. Here's an example of how it might work: Say a borrower finds a loan on their own at a rate of 7.5 percent with two points. A broker gets the same loan for 7.5 percent, but pays only one point. The broker may then add one point to cover his or her fee, but the cost to the borrower is the same - 7.5 percent with 2 points. The borrower pays no additional cost and benefits from the broker's service. By state law, the broker's fee and the discount the lender offers the broker must be disclosed to the borrower.

Q. What should I focus on - lenders advertising the lowest rates or the type of institution I borrow from?
You can focus on the lender, but remember, there is no guarantee you will lock in at the advertised rate. The rates advertised may only be available for a 30 or 60-day period and there's no way you can be sure the loan will close in this period. Interest rates can also change daily. The best way to compare rates is to ask each lender what the rate would be if you closed in a certain time period, for example, 90 days. And be sure to get everything in writing. It is also possible to get a loan with a longer lock-in period but, in that case, you usually pay a higher rate.

Q. What documents will I need to provide when I apply for a loan?
To ensure smooth processing of your loan, have the essential documents ready. Be prepared to provide verification of income, including your pay stub and tax returns for the previous two years. You will also need to provide bank account numbers and details about your long-term debt, including credit cards, auto loans, child support, etc. If you are self-employed, you may need to provide financial statements for your business. Lenders want detailed information. For example, the lender may want to know how you propose to obtain money for down payment. Be sure to inform your lender of any changes in your employment, salary, debt or marital status between the time you submit your application and the time you close.

Q. Pre-pay my mortgage or invest the money? What shall I do?
Though pre-paying your mortgage will shorten your loan term, you may have to pay a penalty. And most of the time, payments are made toward the principal and not interest. This means you lose out on tax benefits.

If you mortgage rate is 8 percent per year, that's what you'll probably earn on your pre-payment. Compare that return with what you'd earn in other comparably safe investments, for instance, a Certificate of Deposit (CD). But wait! Here's more. Weigh the advantages of pre-paying your mortgage against paying off debt. If your credit card interest rate is 18 percent, it makes more sense to pay off this higher-interest debt rather than to pre-pay your 8 percent mortgage.

Q. Do I have to be a homeowner to qualify for a refinance ?
Yes, this offer is exclusively for homeowners. These loans are typically secured by residential property.

Q. How do I find out what my interest rate will be?
After completing an loan application, an Account Executive will be able to run your credit report and assess your information to determine the products and interest rates available to you. Rest assured we offer the lowest rates available on the market . The interest rates will be determined by your credit history, loan amount, loan-to-value ratio, property specifics and any rate reduction options that you select The term, or length of loan, will depend on whether you choose a loan or a line of credit but generally ranges from 15 to 30 years. (but can be paid off early at any point.)

Q. How do I know if Debt Consolidation & CA Mortgage Brokers will save me money?
After reviewing your online application, one of our approved financial institutions will compare what you are paying now on your high-rate debt to what your consolidated payment would be on your loan.

Q. Is the interest tax deductible?
Interest paid on your account may be tax deductible up to 100% of your home's value. Always consult with a tax advisor regarding your particular situation.

Q. Does filling out an application obligate me to complete a loan with you?
No. Filling out an application does not obligate you to anything.

Q. What are the advantages of a fixed-rate loan?
With a fixed-rate loan, the interest rate will be guaranteed for the life of your loan. The payments are fully amortizing so when your loan is paid off, so is your debt!

Q. How does the loan process work?
A Loan Broker will work with you to determine the products and interest rates available to you. We can usually pre-approve you in less than 20 minutes.  After pre-approval, you will receive a list of the documentation needed to complete your loan. It's that easy, documents will be drawn and before you know it you will be enjoying all the benefits of a new mortgage with the comfort of knowing you received the best rates available.terms are always negotiable.

Q. How do I know how much house I can afford?
As a general guide, you can purchase a home with a value of two or three times your annual household income, depending on your savings and debts. However, if you are buying a home for the first time, you may be able to take advantage of special loan programs for first time buyers.

Q. Which institutions offer home mortgages?
Several types of lenders offer home loans to consumers. These include thrift institutions, commercial banks, mortgage companies, and credit unions. As prices differ from lender to lender, it pays to contact several lenders to make sure that you are getting the best price.