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What is your best rate?

General Brandon Gervais 9 May

One of the most common questions asked in the mortgage industry is. What is your best rate? You would automatically think this is a pretty easy question to answer, but I can assure you it’s not quite that simple. Today is a totally different market, here are some of the variables that come into play when quoting your best rate.

1. What’s your credit score? A 700 FICO score is the new 650 for many lenders as their investors demand better quality borrowers.

2. Where is the property located? Rural areas are getting harder to finance.

3. Is it an insured file, are you putting less than 20% down payment?

4. Is it insurable? Are you putting down more than 20% on the purchase but it can qualify under the stress test, currently 5.34%?

5. Is the loan to value going to be 65% or less? You get the same rate as the guy with 5% down and have to qualify with the same criteria.

6. Are you looking to refinance or buy a rental? Sorry, both are uninsurable and have to qualify at 5.34% but you have to pay a higher interest rate.

7. So how about your employment; have you been on your job or at least in the same industry for the last 2 or more years?

8. Down payment requires a 90-day statement of where it has been kept, please be sure that it was in a bank as anything else seems to be picked to death. Larger gifts lately have required the gifter to show the money was in their account. God forbid they should have won it at a casino as they will want the print out from the cage boss.

9. How fast is your deal closing, as there are quick close rates usually for insured deals.

10. While supposedly everyone is to be able to qualify at 44%TDS and 39% GDS, it’s not always the case as CMHC is still in some instances lower than a 680 FICO score and is wanting the client to be qualified at the old standard of 42% and 35%, which again cuts back the qualifying amounts.

As you can see what’s your best rate has a lot of things come into play today and anyone who gives you a rate over the phone has hopefully asked you at least some of these questions. The best rate today is more about what fits your situation but the old adage of who, what, where and how still apply. Once we have asked the questions, we have to audit the answers to make sure it’s the best fit for your situation. If you have any questions, contact me at 289-682-7633 or by email at bgervais@dominionlending.ca.