7 Biggest Mortgage Mistakes!


Mortgage seem to be the most intricate and daunting process especially for people with little or no experience in borrowing or dealing with debt. 

When searching for a new home, you may begin by counting rooms, windows and bathrooms. But other important elements need to be taken care of to avoid the biggest mortgage mistakes when buying the property.  

For example, a small mistake or error like Paying even 0.5% higher in interest on a mortgage amount can end up costing big money over the entire mortgage term. 

So, it is imperative not to make a mistake and do some research before wading into the world of financing. 

Understanding these mistakes is crucial: If you avoid them, you will be able to uplift the odds that your mortgage application moves smoothly through the process. If you don’t avoid them, you will either probably slow the process or you will even scuttle your chances to even be eligible for the mortgage. 

Dodging the numbers whether for income or debts is never a good idea. New numbers can lead to a delay and you might never be eligible for the mortgage. So be upright and truthful throughout the process. Also, mistakes made before or during the process can lead to a higher interest rate or not getting approved for the mortgage. 

To save yourself money, time and headaches, and avoid making a financial mistake that can plague you for decades. Start your journey to homeownership and secure a financially sound mortgage by avoiding these most common mortgage mistakes; 

1. Shopping for a house before a mortgage 

It is thrilling to look for homes, visiting various properties and dreaming about homeownership than to focus on finances. But this is a common mistake that can be costly in the long run. It is not a smart decision to not learn about the amount you can borrow before finalizing the property as it can lead to rejection at a later stage. So, get your pre-approval letter to know the estimated amount you can borrow before finalising the home. It will show the sellers that you are a serious buyer. 

2. Not checking credit reports or score and Erroneous Information.  

If you are planning to buy a house, pull your credit report and score well in time to know where you stand. As borrowers with higher credit scores tend to get a low-interest rate and those with a bad credit score will have to make changes to improve their credit score. So, it is best to get the full picture well in time. Also, scout for erroneous or incorrect information in your credit report that might have slipped through the cracks as with these mistakes you will end up paying more interest rates and shelling our money from the pocket! 

3. Applying for additional credit before closing 

The period while you have applied for a mortgage is the most critical, try and leave your credit alone during this time. Applying for a new credit card even though you don’t use it or buying a new car etc. can hamper your credit score thereby affecting the mortgage process. 

Though it is true new credit cards can be alluring and enticing but it could be an admonishment to the lenders that can lead to further sinking of the credit score. 

4. Changing Jobs/Employment 

Steady employment most probably a job for two years is considered as financial stability by the lenders to be eligible for the mortgage. New job opportunities can have a myriad of benefits but a change in job or employment can affect your mortgage deal so avoid shifting or changing your job before closing. 

5.Waiting Too Long After Finding a Good Rate 

Though homeownership is a critical decision and one should not hastily decide but once you get a good rate that suits you it is imperative to bring it to a conclusion well in time before the rates change. As mortgage rates tend to change over the months, so embrace it before the situation changes and opportunity vanishes. 

6.Not Shopping Around 

Many people are fearful and apprehensive of shopping or exploring too many lenders. Though there are slight drawbacks but it is not wise to miss out on a bag full of benefits for minor shortcomings. As even the slightest or fraction of a lower interest rate can save you boatloads of money over the years (till the mortgage term). Trust us, a cluster of inquiries and exploring different lenders will not hurt your credit score as much as the hard pull for monthly credit card payments. 

7. Overlooking the other hidden costs of homeownership 

As we all know homeownership is a life-changing decision and includes countless expenses but most of us fall into the trap that by applying for a mortgage, we only need to bear the expenses of down payment and the rest all will be taken care of. This is another major mistake made by homeowners as apart from down payment be prepared for expenses like home inspection, appraisal, title fees on top of the down payment. Apart from these expenses like routine maintenance, utility bill payments etc. should also be calculated as these will also need your attention soon after the purchase. 

Purchasing a home is a decision that needs to be pondered, calculated and planned a bit before jumping to the conclusion. Make sure to contact MMC, we have lenders and financial advisors to see the correct options that suit your specific financial situation. 

Fascinating Mortgage Industry Statistics


The Canadian  housing industry is constantly changing and so are the statistics of Canadian Mortgage industry.

Year-Over-Year and Quarter-Over-Quarter comparisons provide spellbinding insights into Canadian mortgage trends. 

Mortgage Rate Trends 

In January of 2019, Mortgage professionals of Canada released its State of the Mortgage Market Report. The report also includes an assessment of the mortgage stress test, it also highlighted other statistics about what all is happening across the industry.

According to the reports, in 2018:

  • 3 million homeowners had mortgages, out of total 9.8 million homeowners in Canada.
  • 6 million Canadians had Home Equity Line Of Credit (HELOC)
  • 68% of mortgages in Canada had fixed interest rates 
  • 27% of mortgages had variable and adjustable rates 
  • 89% of mortgages had an amortization period of 25 years or less
  • The average amortization period was 22.2 years
  • The average mortgage interest rates in Canada was 3.09%, up from 2.96% in 2017
  • 68% of those who renewed in 2018 saw their interest rates rise.

Home Equity Trends:

In 2018:

  • Canadian homeowners had an average of 74% home equity.
  • 10% of homeowners took out equity in 2018 (up from 9% in 2017)
  • The average homeowner took out $74,000 in equity ( up from $54,500 in 2017)

Most frequent utilization for equity includes:

  • Investments ($23.8 Billion)
  • Home renovation and repair ($17 billion)
  • Debt consolidation and repayments ($16.4 billions)
  • Purchases ($8.6 billions)
  • Other ($6.2 billions)

Home Buying Trends:

  • There was a 11% drop in resale activity from 2017 to 2018
  • The average down payment made by first-time home buyers was 20%

The top sources for down payments were:

  • Personal Savings (52%)
  • Funds from parents or family members (20%)
  • Loan from a financial institution (19%)
  • Withdrawal from RRSP (9%)

Mortgage Arrears

As of November 30, 2018, The Canadian Bank Association reported that out of 4,759,706 mortgages in Canada, 0.24% were in arrears – 11,246 or, about one in 423 mortgages.

Saskatchewan had the highest arrears rate with 0.82% (1,064 or 130,328 Mortgages)

Ontario had the highest amount of mortgages (2,008,299) but the lowest arrear rates (0.09%) with 1,836.

Mortgage Broker Lender Share

In 2018, Canada’s big 5 banks lost 2.7% of the market share in Ontario in 2018, according to the 2019 Q1 Teranent Market Insight Report

Teranet also found that mortgage refinancing was down to 48.7% in 2018 from 54.6% in 2017, but switches were on the rise, going from 45.4% in 2017 to 53.1% in 2018. 

In the switch-outs themselves, more mortgage were moving away from the largest financial institutions and towards the replacement, such as credit unions, private mortgage lenders, and trust companies

According to the Canadian Mortgage Trends, in Q4 of 2018, Scotia Bank led with 28% market share. First National followed with 13% of market share, and then MCAP/RMG with 10.8%, TD Canada Trust with 9.6% and Merix Financial with 6.3%