GOOD DEBT TO INCOME RATIO
For property owners this is the most obvious route to take when looking to finance their homes an effective way. Although these loans are readily available, there is certain criterion to be met and most importantly is a good credit score. Whether this is the first time you are taking on the loan or is a refinance mortgage for the property, a favourable credit history will make it easier to get a loan from different kinds of lending institutions.
From the credit score, the client has got to have a good debt to income ratio because this is a clear indication to the lending institution that the punter will be able to handle the mortgage payments with ease. Should this ratio fall below the recommended levels, then chances of the mortgage application being denied will go up exponentially.
A down payment is required by different residential mortgage companies as a sign of commitment on the part of the borrower though the amount required upfront may vary from one organization to the next. Down payment can be as low as 5% for High ratio (insured) mortgages, 20% for conventional (uninsured) mortgages and 20% to 35% for high risk or private mortgages.
As expected, there are different interest rate formats used by lenders in the residential mortgage industry. These include fixed and variable interest rates whose current amortization time limit stands at 30 years. You can get 35 year amortization for high risk mortgages.
If a borrower has verifiable income and a good credit score there are plenty of lenders to choose from and determining the best product and rate is the main focus. However if a borrower’s credit is damaged or income is hard to proof the list of lenders willing to do the mortgages is greatly reduced. That is why it is very important to work with a Toronto Mortgage Broker as they have access to a wide range of lenders and can always guarantee a mortgage approval.
Contact Robert Clancy today to learn more about our Residential Mortgage programs.