Mortgage Shopping

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Shopping For A Mortgage

What is a mortgage?

A mortgage is a loan designated to help you purchase a home or property.

The Alberta Mortgage Brokers Association (AMBA) is the collective voice of the mortgage brokerage industry in Alberta. AMBA develops a standard of excellence for its members through advocacy, education, information and networking. AMBA promotes an ethical and sustainable industry for consumers and industry members.

A mortgage broker can help you to find the best mortgage option for your situation. Rather than working for one financial institution, they deal with many different financial institutions on a daily basis. This allows them to offer you more choices and competitive options.

What is a mortgage broker?

Mortgage brokers are independent professionals who work as liaisons between the borrower and the lender to negotiate mortgage loans. They are specialists who facilitate the transaction from start to finish.

Finding A Broker

AMBA members are the best in the business and adhere to strict ethical rules and regulations determined by the association.

Use our Find A Broker directory to search for an AMBA broker/associate to help you with your mortgage.

Mortage Shopping

How does a mortgage work?

When a home buyer purchases a home they make a down payment on the purchase price and then borrow the difference from a lender. In Canada, five per cent is the minimum down payment home buyers have to make.

The lender then provides a mortgage loan equal to the difference between the down payment and the purchase price of the home.

Once the buyer takes possession of the home, they begin to make regular payments to the lender to pay back the amount they borrowed, called the principal, plus interest, according to the terms and conditions negotiated.

The longer it take to pay back a mortgage, the more interest paid. The higher the interest rate, the higher the regular payments. If the owner defaults on the loan – that is, regular payments are being made – the lender can take ownership of the property.

Qualifying

Lenders will check whether you qualify for a mortgage by looking at your current assets, your income and your current level of debt.

Terms and Conditions of the Mortgage

Determining the terms and conditions requires some negotiating with the lender. These include:

The amount of the mortgage ¬– how much the lender will lend you.
The amortization period – how many years it will take to pay the mortgage off in full.
The term of the mortgage – the length of time the agreement with the lender is in effect.
How often payments will occur.
If it’s a fixed rate mortgage, the interest rate to be paid.