Five Mortgage Tips
When buying a home, applying for a mortgage may seem overwhelming, especially if it’s your first time. Using a mortgage broker can help you navigate the myriad of options and programs that are available but here are a few tips to help you feel more confident as you approach the process.
1 Keep your credit balances in check - when it comes to your mortgage application lenders are looking for an appropriate debt-to-income ratio. In other words, you need to have more income than you have debt. Avoid running up a balance on your credit cards and pay down existing debts as much as possible.
2 Know your credit rating – as part of your approval process lenders will obtain and review your credit report and use your ‘Beacon Score’ as a determinant in your approvability and the interest rate you receive. You can obtain a copy of your report from either www.equifax.ca or www.tuc.ca . Even if your credit score is less than favourable I can most likely still obtain mortgage financing for you at a national lender.
3 Be realistic about what you can afford – you may be over or under estimating what price range you can be shopping for. A good idea is to check out your situation using an online calculator. You can input your down payment and income information to give you an idea of what the maximum mortgage amount you can qualify for would be. This is a handy tool http://www.mortgagegroup.com/site/bc/calculators.asp to give you an idea of what you can afford but it is a better idea to contact a mortgage broker in order to assess your full financial picture and provide you with a pre-qualification mortgage number. I can also get you a rate hold which is a good plan in this time of rising rates.
4 Learn about your down payment choices – if you don’t have a large down payment there are several options available to you. High ratio mortgages, gifts from family members, using RRSP savings (for first time home-buyers) and the new BC Home Partnership Loan are all available under certain conditions.
5 Know your closing costs – it helps to know what closing costs are so you can minimize last minute complications. When calculating costs you need to factor in the Property Transfer Tax as well as legal fees and other incidentals such as moving fees etc. Again, a mortgage broker can give a detailed idea of what these might be.
TMG The Mortgage Group Canada Ltd.
Jerry Sims is a licensed Mortgage Broker with TMG The Mortgage Group Canada Inc. and a member of Mortgage Professionals Canada