Mortgage Blog
Canada's Mortgage Experts
Now is the best time to plan your mortgage strategy!
November 21, 2017 | Posted by: Dana Stauber
With all the recent changes by the Canadian government tightening mortgage qualification, whether you are looking to buy your first home, or move into your forever home, you can never be too prepared. If you'd like to discuss your personal financial situation, feel free to contact me anytime. With that said, here is a 30,000 foot view of what you need to know about buying a home in today's market, as it relates to mortgage financing.
Are You Credit-Worthy?
First things first: do you have a good credit? Having good credit is of paramount importance when applying for a mortgage. Establishing a good credit score takes some time, and most lenders want to see that you have managed your credit well over a minimum of a 2 year period. There are mortgage options if you have less than perfect credit, but if time is on your side, it's always a good idea to get your credit into a better place.
How Will You Repay Your Mortgage?
All lenders want to see that you have the means to pay back your loan. They want to know that you have a steady job, and will make you prove it through documentation. This is one of the areas the government has tightened restrictions for lenders with the latest set of rule changes. Lenders are obligated to scrutinize your documentation more than ever before.
Do You Have A Downpayment?
In order to borrow money from a financial institution, you're going to have to bring some money to the table. Of course the best down payment comes from an accumulation of your own resources, but there are other sources of down payment that are available to you. A 5% down payment will be the bare minimum required, and depending on the purchase price, it might be more.
How Much Can You Afford?
What you can afford on paper and what you can afford in real life are often very different. The amount you qualify to borrow is based on way too many things to include in a single newsletter, and the rules keep changing. Most recently, the government has introduced a financial stress test that forces all buyers (conventional and insured) to qualify at a mortgage rate that is at least 2% higher than the rate they will actually pay.
Regardless of where you are in the home buying process, it's never too early to talk about it.
Questions on your mortgage, or want to compare your mortgage to what is currently available? Please email me danastauber@invis.ca
