Start 2019 Fresh: Make Sure Your Mortgage Strategy is Working for You
January 8, 2019 | Posted by: Dana Stauber
The beginning of 2018 saw the introduction of a stress test for conventional mortgages, which changed the mortgage marketplace considerably, essentially making it more difficult for all borrowers to get a mortgage. As a result, here’s what you should keep in mind to ensure the best mortgage for your needs, whether you are considering trading up, refinancing, or preparing to renew your mortgage.
1.
You need options. It’s become more difficult to qualify at a bank for the self-employed, those with past credit problems, or when the stress test is a challenge. Lending options available through mortgage brokers – credit unions, alternative and private lenders – are becoming increasingly popular and making a big difference for many.
2.
Be wary of “best-rates”. Mortgage rule changes have thrown mortgage pricing up in the air. Your actual rate depends on a whole slate of factors, which is why you can only get an accurate rate quote after an in-depth assessment of your personal situation.
3.
A 30-year amortization can help. A longer amortization (20% or more in equity required) allows you to minimize your mortgage payments and free up cash flow for uses like investing, business needs, post-secondary education, maternity leave, home maintenance, or other life situations. You have the flexibillty to keep your payments at the shorter amortization and then only use this option if and when the need arises. If you need wiggle room on cash flow, this strategy can help.
4.
Monitor your credit score. The best rates go to borrowers with the best credit scores. Lenders are also paying closer attention to any warning signals that clients may have trouble paying their mortgage. If your credit slips and your lender feels your risk has increased, you may be offered a higher rate at renewal. I can help you monitor your score or offer credit improvement strategies.
5.
Always try to plug your biggest money leak! If debt is choking your cash flow and you have enough equity in your home, you may be able to move that debt to your lower-rate mortgage and save thousands. Using home equity to pay down debt is one of my specialties.
New year. New chance to make sure your mortgage strategy is working for you and helping you build wealth. Get in touch for your annual mortgage review.
