• Robert Floris CFP, AMP
    Lead Mortgage Agent
    M08004919
    905-574-9200 Ext. 215

  • Mortgage Hidden Costs

  • Mortgage Hidden CostsMortgage Hidden Costs

    The mortgage broker world can be confusing in terms of Mortgage Hidden Costs. At Mortgage Architects in Hamilton, we will try to take the mystery out of how the industry works and expose Mortgage Hidden Costs. Now it is true that every mortgage case can be different, but generally they fall into three categories. We will rank the system from A to C with A being the best and C being the worst. Let’s start with the seven star client. We will call them the “A Client” – the top!

    The Type “A” Mortgage Client

    Generally speaking they have good credit, good income, good equity and good capacity to pay.

    Pricing: this client should get the best pricing in terms of fixed or variable rates.

    Costs: very few Mortgage Hidden Costs. The broker should 100% be compensated by the lender institution. In some cases an appraisal may be required. A lawyer fee is required.

    The Type “B” Mortgage Client

    This type of client usually has one major flaw. A good mortgage broker will work on that weakness with the client to bring them up to the “A” level in time. The “B” type client has good equity, but the credit, income or capacity to pay requires an overhaul. It must be improved to get to the A-level.

    Pricing: the mortgage rates can be in the range of 1-3% higher. Since it is B rated, the clients pay for the higher risk.

    Costs: watch out for Hidden Mortgage Costs in this case. The lender will charge an amount of up to 1% of the loan. So if you have a $300,000 mortgage, the fee would be $3000. An appraisal fee and a legal fee will apply. The broker is compensated by the lender. Some brokers charge over and above the lender’s fee. At our office, there are no additional fees.

    The Type “C” Mortgage Client

    These are clients who are in deep trouble. This can be due to many factors including: very poor credit, poor repayment history, tax arrears, Government liens, power of sale proceedings called by the bank, spousal payouts, or self-employed clients who have little income to show. They cannot get a mortgage at a regular financial institution due to the above deep rooted problems but they have one valuable asset: equity.

    Pricing: can vary based on the amount of equity and risk but a first mortgage can run between 7% to 11%. A second mortgage can start at 8% and go as high as 15%.

    Costs: this is where it can get expensive and the Hidden Mortgage Costs can really mount. The lenders in these cases are generally private individuals or MICs (mortgage investment corporations) and can charge a fee of up to 4% of the amount of the loan. Some greedy brokers can also charge the same amount. Legal fees and appraisal fees also apply.

    In Conclusion

    We hope this helps you understand generally how the process works. We will always be available to answer your questions and give our thoughts. The best part is we are a non-pressure organization. We want our clients to be educated at Robert Floris’ Mortgage Architects.

    Robert Floris is a Mortgage Broker. His office is located at 651 Fennell Avenue East in Hamilton, Ontario. If you would like to speak with Robert, he can be reached at 905-574-9200 #215. Alternatively, you can contact Robert here.

    If you would like to apply for a mortgage online, please follow this link.

    If you would like to see our Google reviews or leave one yourself, you can do so here.

    Thanks for reading!

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