Mortgages in Canada - Risk and Resposibility

(NC)—Being ready for a mortgage involves much more than simply qualifying for a loan. Because of the amount of money you borrow, and the time it takes to pay it back, taking on a mortgage comes with certain risks. It’s important to know what these risks are and to be financially prepared for them. Therefore, before you shop for a mortgage, make sure you take a close look at your situation – your finances, future plans and lifestyle – and consider how much debt you can comfortably afford.

Over long periods, ffinancial setbacks may arise and not just when the economy is weak. Demands on your income increase for example, when you start a family, change career paths, launch a business, mismanage expenses, become ill, lose your job, get divorced, or lose a partner. According to the Financial Services Commission of Ontario (FSCO) – the government agency responsible for overseeing the mortgage brokering industry in Ontario – these are important things to consider if you’re thinking of getting a mortgage. Whether you’re late making mortgage payments, or cannot make them at all, not being able to meet your mortgage payments can have serious consequences. Before getting a loan, make sure you are fully aware of the default consequences.

When you’re shopping for a mortgage, keep in mind the following tips:

• Read the entire mortgage agreement and get answers to any questions you may have.
• Consider getting legal advice before signing the mortgage agreement.
• If you are using the services of a mortgage brokerage, broker or agent, make sure:
• The business and individual are licensed to deal or trade in mortgages in Ontario.
• The material risks of your mortgage are disclosed to you in writing and in plain language.
• You are given at least two business days to review the mortgage disclosure statement before you sign it, or before you make a mortgage payment, whichever is earlier.

To check if your mortgage brokerage, broker or agent is licensed with FSCO, and to learn more about the risks of getting a mortgage, visit FSCO’s website at www.fsco.gov.on.ca and select Mortgage Brokers.