A Beginner’s Guide To Mortgages And Home Ownership
Do you plan on buying your first home or adding a new apartment to your property portfolio? Availing of a mortgage has the advantages of being cost-effective as the interest rates on a mortgage are generally lower in this case than for other types of borrowing. Similarly, lenders can offer a variety of mortgages such as fixed-rate, tracker, or discounted deals that are sure to meet your mortgage needs.
While it all might sound simple enough, don’t be fooled. Mortgages are not a straightforward beast. Qualifying for and closing your mortgage can be complex and stressful, and at times seemingly impossible.
To raise awareness for clients and outline the steps required to pretty much guarantee you financial assistance, Darrell Alexander - Mortgage Broker has put together a Beginner’s Guide to mortgages and homeownership that will hopefully be helpful.
Get your finances organized and in order: The first step towards a successful mortgage is getting your finances in order, clearing as much debt as possible, maintaining a steady income, and saving up for the downpayment. You should also check your credit report, fix any mistakes, improve your credit score, lower your debt-to-income ratio, and get your paperwork in order. At the same time, remember that actively saving for and offering a large down payment reduces the loan-to-value ratio, which increases your chances of getting the mortgage you want.
Get pre-approved: One of the best things any potential homeowner can do when starting the home buying process is to get pre-approved. Mortgage pre-approval requires submission and verification of your financial history and can help you determine your price range, understand the monthly mortgage payment associated with that price range and provide the mortgage rate for your first term.
Note that pre-approval does not mean that a lender has thoroughly reviewed your documentation, and you may still need the approval of a mortgage insurer. That said, it does have multiple benefits, such as assuring the seller that securing financing should not be an issue.
Advice From The Pros
Avoid taking on additional debt: Applying for additional loans or financing while you are currently in the midst of finalizing a mortgage contract can drastically affect what you qualify for. Additionally, it can jeopardize your credit rating. Save big purchases, such as a new car, until after your mortgage has been finalized.
Don’t change jobs or employers: As employment is one of the most critical factors determining whether or not you qualify for mortgage financing, it is important not to change employers if you are in the middle of the mortgage approval process. You see, lenders prefer to see a long tenure with your employer as this indicates financial stability.
Avoid credit mishaps: As mortgage financing is contingent on your credit score and your current debt, keeping these things healthy during mortgage approval is crucial. Do not go over limits on your cards, lines of credit or miss any payment dates when your finances are being reviewed. This will affect whether or not the lender sees you as a responsible borrower.
Work only with trusted professionals: When it comes to what is probably the most important purchase of your life, dealing with realtors and mortgage professionals you trust is critical to your and your family’s long-term comfort and stability. Always work with trusted and proven professionals who can guide you through the transaction from start to finish.
Darrell Alexander - Mortgage Broker aims to exceed your expectations when meeting your mortgage requirements. As the go-to mortgage broker in Lethbridge, Alberta, for all your mortgage and lending needs, you can feel confident building your future with me. I have had a business and finance background all my life and have access to many chartered banks and institutions that the average individual does not have access to, including private lending.