Mortgages: your rights
Mortgage professionals must be licensed and follow rules set out in the Mortgage Regulation Act and regulations. The legislation outlines your rights in relation to getting and paying back a mortgage.
By law, mortgage professionals must give you the details of the mortgage (like interest rate and the relationship the mortgage brokerage has with mortgage lenders) and explain the terms for prepayment before you sign the mortgage.
Types of mortgage professionals
Mortgage professionals include mortgage brokerages, mortgage brokers, associate mortgage brokers, mortgage lenders and mortgage administrators.
A mortgage brokerage employs mortgage brokers and associate mortgage brokers to act as an intermediary between a borrower and lender for a mortgage.
A mortgage lender is a person or organization that lends money that’s secured by real property or represents themselves as a mortgage lender. Mortgage lenders regulated under the Mortgage Regulation Act include credit unions, trust companies and finance companies. Federally regulated banks are not regulated under the Mortgage Regulation Act.
A mortgage administrator acts on behalf of an investor to receive mortgage payments from a borrower, make mortgage payments to the investor and monitor payment activity.
Licence type and licence number
You have the right to ask a mortgage professional to provide their licence number, as well as the type of licence. You can also check that a mortgage professional is licensed in Nova Scotia under the Mortgage Regulation Act and regulations – licensed mortgage brokerages, mortgage lenders and mortgage administrators and licensed mortgage brokers and associate mortgage brokers.
Before a mortgage professional provides mortgage services
A mortgage broker or associate mortgage broker needs to give you a completed Mortgage Brokerage Disclosure Form before providing any mortgage services to you. You and the mortgage brokerage must both sign and date the form. Keep a copy for your records.
The Mortgage Brokerage Disclosure Form includes:
- obligations the mortgage brokerage has to you (the borrower)
- how the mortgage brokerage acts in your best interest and determines which mortgage is most suitable for you
- relationship that the mortgage brokerage has with mortgage lenders
- how the mortgage brokerage will be compensated for a mortgage application or transaction
After a mortgage professional submits a loan application to a mortgage lender
A mortgage broker or associate mortgage broker needs to give you a completed Mortgage Brokerage Recommendation and Assessment Form after they submit a loan application to a mortgage lender on your behalf.
The Mortgage Brokerage Recommendation and Assessment Form includes:
- details about the recommended mortgage
- criteria used to determine which mortgage is most suitable for you
- if the mortgage brokerage or representatives of the mortgage brokerage have any interest (benefit or advantage received directly or indirectly if the mortgage transaction proceeds) in the recommended mortgage
The mortgage brokerage needs your written acknowledgement that you received the Mortgage Brokerage Recommendation and Assessment Form at least 1 day before you sign the mortgage or make a payment.
Before you sign the mortgage or make a payment
The mortgage brokerage needs to make sure that the mortgage lender prepares and provides you with a disclosure statement.
The disclosure statement includes:
- cost of borrowing and a summary of the mortgage details
- total amount of mortgage and interest rate
- payment information (like mortgage term, total mortgage payment and payment frequency)
- details of prepayment terms (if the mortgage lender doesn’t provide this, you have the right to prepay the mortgage)
- amortization table that shows how each payment is split between paying interest and paying down the principal
The mortgage lender must provide the disclosure statement to you at least 2 days before you sign the mortgage or make a payment.
Mortgage lenders and mortgage brokerages can’t charge, collect or try to collect a mortgage fee from you until:
- mortgage lender provides you with a written commitment to fund the mortgage (this letter states the lender will fund the mortgage and includes the terms of the mortgage)
- you accept the written commitment from the mortgage lender to fund the mortgage
- mortgage lender provides you with a copy of the signed mortgage
Requirements to operate
Mortgage professionals (mortgage brokerages, mortgage brokers, associate mortgage brokers, mortgage lenders and mortgage administrators) must be licensed to do business in Nova Scotia.
Mortgage brokerages, mortgage lenders and mortgage administrators must have a permanent business address in Nova Scotia.