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The process of obtaining a mortgage can be a complicated and exhausting process.

Kiran Kaushal, President and Principal Broker of Interfinance Mortgage Corporation, enjoys making this process simple and straightforward for her clients by analyzing their financial issues and teaching them how to avoid making mistakes in the future. She solves their problems by giving her clients a dose of honest financial advice on a host of issues relating to debt and lending.

“I am direct and straightforward with my clients,” Kiran says. ”When we work out a solution together, I don’t sugarcoat because I want to help my clients have great lives in homes they love.”

Kiran loves the mortgage industry particularly because she enjoys assisting her clients in finding and staying in their dream homes. Home is particularly meaningful to Kiran, who grew up in the North York community. That is why she chose to establish her business in North York and why she chose to study Information Management at Toronto’s Ryerson University.

Kiran’s love of the community has pushed her to establish her company, Interfinance Mortgage Corporation, as a premier brokerage and has differentiated herself by offering in-house private lending. Kiran’s clients tend to be self-employed individuals or builders looking for construction financing.

Often, they may have bruised credit and require debt consolidation loans. Sometimes, the issue is a rushed closing on a new home because the client’s original mortgage fell through at the last minute. Kiran’s ability to act as a broker and a lender means that she can give her clients quotes on a mortgage or consolidation loans promptly. Kiran explains, “We can do all our mortgage under-writing on the spot, and that can help people out of stressful situations. We service a wide variety of clients, and we often see individuals who require our services in the short-term. We help clean up their credit and, after a year, they are ready to move to a bank. We give people choices.”

On January 1st, 2018, legislative changes were made to mortgage qualifications. Because of these changes, Kiran says, “You often see situations where newly built homes have closings coming up, and the buyers no longer qualify for the mortgages they had planned because of the regulatory changes. In those cases, getting a private mortgage can save their deposits. It’s another way of helping people fulfill their dreams when banks are not an option.”

Even when banks are an option, people can benefit tremendously by using a mortgage broker like Kiran. A bank’s mortgage specialist only sells the mortgage products their bank offers. Brokers shop around for the best product as it pertains to each case and Kiran’s knowledge of the market allows her to find the products that provide the most significant benefit for each client’s unique circumstances.

That being said, clients must endeavor to understand several factors at play in the mortgage process. Thanks to her trademark directness, Kiran ensures that her clients grasp these concepts before making a decision.

Kiran Kaushal’s Seven Essentials of Mortgage Debt Literacy:

1. Rate.

Most of us are familiar with the prime mortgage-lending rate. Whether you qualify for that interest rate, or not, is determined by the amount of your down payment, the size of your mortgage, your income, your employment stability, your credit history and many other factors.

Because mortgage brokers are always keeping up with the constantly evolving lending market, they can find the product that is best for your situation. For some of Kiran’s clients, that might mean finding an alternative lender, a business that lends money but is not one of the major banks.

“For example, Triple-A clients who have a high net worth may go to a monoline lender, who offers special promotional rates that can be lower than the banks,” Kiran says.

2. Product.

Mortgages are lending products. The term of the mortgage is the length of time in which the parameters of the mortgage are valid. At the end of that period, the client will have either paid off the loan, found another mortgage to repay the remaining debt (refinancing/switch or transfer), or sold off the property to pay the mortgage, among other scenarios.

During this term, the interest rate is either fixed (remaining the same) or variable (will fluctuate based on the prime rate).

“Rate and terms are features of a product you will have to compare with others for similarities and differences,” Kiran says. “I will look at everything that is available to you in your situation and bring you different options to examine.”

3. Pre-payment privilege.

Usually, a mortgage is paid off over a set period according to a predetermined payment schedule. However, if you have a windfall, like a lottery win or an inheritance, you may want to pay down more of your mortgage earlier than planned to save money on interest.

“How much can I pre-pay per year? It is a question that is important to a lot of people,” Kiran says. “In each mortgage product there are different payment options and each lender has a different prepayment privilege. You need access to a variety of different lenders to find the most flexible prepayment privilege in case your circumstances improve.”

4. Penalties.

If you sign a 5-year term mortgage contract, for example, and then need to sell your home before the end of the term, you will need to break the term, and that may mean penalties will apply.

“Unforeseen events happen,” Kiran says. “If something happens, you need to know what the penalty is for breaking the mortgage contract. Some lenders have open mortgages that will let you pre-pay a certain amount of the mortgage at any time, while others are closed and put a restriction on how much of the loan you can pre-pay per year. If you go over that pre-payment limit, again, penalties may apply.”

5. Fees.

Many lenders charge lender fees and some mortgage brokers charge brokerage fees for mortgage services.

“Everyone needs to know who is charging how much for what service and whether or not that amount is competitive,” Kiran explains. “You should always have an idea of what it costs to get the mortgage arranged.”

6. Term.

As was previously mentioned, the term of the mortgage is the length of time that the legal parameters of the mortgage apply for. Most people are used to hearing about five, seven, and ten-year term mortgages. However, term lengths can be arranged on a more custom basis depending on the unique situation of the client.

“If someone has great income, but borderline credit they may not qualify for a long-term mortgage with a bank,” Kiran explains. “So, in that case, we would work with a Non-A lender with a one-year term at a slightly higher rate. After that, they can switch back to an A lender for a longer term at a lower rate.”

7. Insurance.

Different kinds of insurance come into play when you are negotiating a mortgage to buy a home. Title insurance, for example, is an insurance policy that protects homeowners and lenders against losses related to the property's title or ownership. This includes unknown title defects, title fraud, existing liens against the property's title, encroachment issues, etc. “It is very difficult to close on a mortgage without title insurance. To protect our customers, we ensure that all mortgages we close on are title insured,” Kiran says.

Another type of insurance called mortgage protection insurance helps cover your mortgage payments if you become seriously ill or die unexpectedly. The lender is usually the beneficiary while the borrower pays the premiums. Some clients forgo this type of insurance if their life insurance policy covers the mortgage in a timely manner.

Kiran says, “In my opinion, everyone should have some kind of insurance.

”Once the essentials of mortgage debt literacy have been mastered, Kiran can help her clients through the mortgage process in an informed manner.

“Usually clients have some idea of what they can get approved for,” Kiran says, “but they don’t always know why. My job is to explain it to them so that they thoroughly understand their financial situation, and I get to ensure the process is completed with honesty and integrity.”

That honesty and integrity have also motivated Kiran to give back to the community. In 2010, Kiran and her family founded the Shayam Kaushal Charitable Foundation in honour of her brother who died of bone cancer in 2009. The foundation seeks to express the hope, strength, and determination Shayam brought to the world by raising money for charities that teach others to persevere in the face of serious challenges. To date, the foundation has raised significant donations for the War Amps, Free the Children, Autism Ontario, Sick Kids Hospital, Mount Sinai Hospital, and many other worthy causes.

Kate Baggott's technology and business journalism has appeared in the Technology Review at MIT, the Globe and Mail, Canada Computes, the Vancouver Sun, and on the Business to Business News Network

Kate is the author of two short story collections.


220 Sheppard Avenue West North York, M2N 1N1

(416) 445-4890

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