2016 brought the 6th set of mortgage rule changes since 2008 and while there is plenty of speculation on how the real estate market will be affected by them, I believe they were implemented with minimal immediate impact. For the majority of borrowers, financing a home is a process you will go through a few times in your life and we know from experience it isn’t easy to stay on top of all of the ins and outs of the financing requirements with all of these changes. If you are thinking about getting a new mortgage or making a change to the financing you already have in 2017, the 7 tips below should help you avoid costly mortgage mistakes as well as to increase your odds of mortgage success
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. I might suggest starting off by reading through the minutes of the last year’s meetings of the condo association. These minutes provide not only details about the financial health of your condo fund, but also happenings around your complex such as what unit is hosting loud parties or who isn’t picking up after their dog. You should also learn 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.
Picking a professional you don’t connect with
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 professionals involved in the home buying process, don’t be afraid to get a second opinion.
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 on all documents before you sign on the dotted line. Take the time to read through all of the details with your mortgage professional and ensure you have a thorough understanding of the commitment you’re making.
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.
Not getting a pre-approval
There’s nothing worse than putting in an offer on a home and then not qualifying for the financing. If you are unsure about your current finances or want a rate hold at today’s rates, avoid disappointments by getting a pre-approval. Be advised even if you are pre-approved, you still need to get the property and supporting documentation reviewed and signed off by your lender. The insurance company such as CMHC, Genworth or Canada Guaranty must also approve both you and the property if you are putting down less than 20% of the purchase price and require a “high ratio” or insured mortgage.
Don’t throw out your important documents
If you plan on applying for any financing in 2017, be prepared to provide documentation confirming the details you stated on your credit application. Most importantly and not limited to; income documents such as pay stubs, 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.
Don’t hesitate to wait
Last but not least, 2017 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 these days by the many different lenders. If you’re not ready to buy, a preliminary consultation allows you to get an understanding of any leg-work that may need to be completed before you can qualify.
New mortgage rules aside, achieving mortgage success should not be difficult; home ownership is an attainable goal for most, as long as you do the right things. If you’re unsure how to obtain a mortgage approval, the first place to start is by doing your own research. The tips above are just the tip of the iceberg, education will be your best tool in your quest for the ideal mortgage solution.
For all your mortgage needs, contact Jackie at 780.433.8412 or firstname.lastname@example.org. Stay in the loop my following on Twitter @Mortgagegirlca.