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Mortgage Mistakes

Avoid these mortgage mistakes in 2015 

Financing a home is a process most borrowers only go through a few times in their life and we know from experience it isn’t easy to stay on top of all the of the ins and outs of the financing requirements with all of the changes being mandated by the government over the past few years. If you’re thinking about getting a new mortgage in 2015 or making a change to the financing you already have, the 7 tips below should help you avoid costly mortgage mistakes.

  1. Not reviewing your condo documents

Most condo buyers don’t understand all of the documentation provided by the seller and should defer to their real estate lawyer to explain the pertinent details or at the very least, their realtor if experienced in condo’s. If possible, take the time to read through the minutes of the last year’s meetings of the condo association prior to removing your purchase agreement condo document conditions. These minutes provide not only details about the financial health of your condo fund, but also happenings around your complex too such as what unit is hosting loud parties or who isn’t picking up after their dog . You will also be able to see if there are any upcoming renovations required or more importantly, whether there will be any special assessments due to limited funds accumulated in the condo reserve fund. A special assessment could result in cash out of your pocket, so do ensure you are clear on what is in your condo documents before committing to purchasing the property.

  1. Choose the right professional for you

Your home will likely be one of the largest debts you will ever have so it’s important to ensure you are getting proper guidance about all of the products and services available to you before you make a commitment. Ask friends and family for referrals and if you are looking online, be sure to read any of the online reviews posted about that person. If you aren’t comfortable with the advice or opinions of any of the professional involved in the home buying process, don’t be afraid to get a second opinion. A trustworthy professional should send you in the right direction even if you are just making a preliminary inquiry and I don’t believe you should have to provide a detailed credit application if you’re just looking for general information. That can wait until you are 100% ready to proceed and know exactly who you want to work with. Nothing wrong with being upfront and honest in stating you are still in the “shopping” stage of who you want to work with. Once you are comfortable that you have found the right person for you, then be prepared to provide extensive details about your financial position along with supporting documentation.

  1. Paying attention to the wrong details

Rate is important, yes, but so are the payout penalties, the pre-payment privileges and the actual monthly payment amount. When it comes to borrowing a large amount, like a mortgage, it is imperative you read the fine print of all documents before you sign on the dotted line. Take the time to through all the details with your mortgage professional and ensure you have a thorough understanding of the commitment you’re making.

  1.  Ignoring your credit

I can’t stress enough how important a good credit rating is. Not only does it qualify you for best rates on everything from car loans, credit cards, and mortgages, even landlords are looking at your credit before renting you a place. Ask for a credit consultation from a qualified professional, by that I mean, if you want to get a mortgage, talk to a mortgage professional about how your credit needs to look in order for you to qualify for a mortgage at best rates. If you are not there yet, ask what you need to do and make a plan that you can commit to. If your credit needs extensive rehabilitation, determine your end goal and talk to a professional that shares that vision. You can obtain your credit rating by visiting Equifax.ca.

  1. Not getting a pre-approval

There’s nothing worse than putting in an offer on a home and then not qualifying for the financing.  Avoid the disappointment by getting a pre-approval. And further to that, when rates are on the rise it makes sense to get an interest rate held for you for up to 120 days.  Do be advised even if you are pre-approved, you still need to get the property and supporting documentation approved by your lender as well as the insurance company if you are putting down less than 20% of the purchase price and require a “high ratio” mortgage.

  1. Don’t throw out your important documents

If you plan on applying for any financing in 2015, be prepared to provide documentation confirming the details you stated on your credit application. Most importantly, income documents such as paystubs or tax returns and Notice of Assessments. Also important are any documents that have to do with your credit. If you’ve cleared up any derogatory credit such as collections or judgments, always keep the documents confirming that in case your credit report isn’t updated by the time you want to apply for any borrowings. By having these documents on hand and accessible, you avoid having to track the paperwork down at a later date.

  1. Don’t hesitate to wait

Last but not least, 2015 may not be your year to get a mortgage. Don’t hesitate in putting off getting a mortgage for another year as I believe it’s better to wait than to rush into an unaffordable situation. When it comes to getting a mortgage of any type, nothing replaces an in-depth consultation with an experienced mortgage specialist about the mortgage process and the many financing options available to borrowers in 2015. Get a head start on a plan for the new year by calling your favorite financial professional.

If you’re looking for an experienced Mortgage Broker, contact the Mortgagegirl at 780.433.8412 or info@mortgagegirl.ca. Stay in the loop my following on Twitter @mortgagegirlca.

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