Are you planning to get a new residence for your family? If you’ve been staying in a rented house, it is very natural that you must be dreaming of getting yourself a new house. Almost everyone nurtures a dream of having a home of their own. There are many financial institutions that help a borrower materialize their dream. Most people will need to take out a mortgage loan in order to finance a residential property but always remember that a mortgage loan is the biggest responsibility on your shoulders and you must repay the loan on time to avoid any forceful repossession of your dream house.
1. Do adequate market research: Before you take out a mortgage loan in the market, do some market research so that you are informed of current mortgage interest rates and what is involved in obtaining mortgage financing. You do not have to be an expert but having a general understanding is important. Work with a mortgage broker for the best possible advice and mortgage rates. Check out my website for information on different kinds of mortgage products.
2. Boost your credit score: Maintaining a good credit score is important when it comes to taking out a mortgage loan. All lenders will check your credit score in order to understand what kind of a borrowing habits you have and if you meet your payments on time. Your credit score implies your financial background and a good credit score shows that you are a financially responsible person and a poor credit score implies just the opposite.
3. Down payment: You can put as little down at 5% on a new primary residence purchase. This will require paying CMHC mortgage insurance. To avoid paying CMHC mortgage insurance a borrower has to put down 20%. Naturally the more money you can put down the better as it reduces your borrowing costs however don’t let a minimum down payment stop you from purchasing a property. Paying rent so you can save up a large down payment does not make sense.
4. Lower your debts: When being approved for a mortgage all your current debt obligations are taken into account. So if you are planning on purchasing a new property in the near future try not to take on new debt from now until then. Sometimes a client may have too much debt and does not qualify for the mortgage loan they require. A strategy can be to put down a smaller down payment and use some of the down payment to pay down some of the debt to reduce the monthly debt obligation. This is where working a smart mortgage broker can be a big benefit.
A bank employee will either approve or decline your mortgage. They will not help you find ways to get approved.
5. Provide correct information to the lender: You must provide the correct information to the lender so that they may assess your financial situation and make sure that the mortgage loan that you’re taking out is in accordance with your present financial affordability. If you provide them with false information and they find out the mortgage loan can be taken back which would leave you in a really bad situation. Always be upfront with your mortgage broker. Disclose all information upfront because the lender and mortgage broker will eventually find out.
If you’re a new home buyer and you’re taken the plunge into the mortgage market to take out a mortgage loan, make sure you follow the mortgage advice listed above. Stay informed about the changes within the mortgage market so that you may make the best decision when it comes to your mortgage loan and check out my website at https://www.bestratesmortgages.ca for current information on mortgage financing, market trends, product and mortgage rate updates.