Top Five Considerations For Your First Mortgage
Buying a first home or investing in a property for the first time is exciting. You get to find the perfect place to suit your needs, you can make renovations, and let’s not forget the important goal of making money, either by eventually owning your home outright and paying zero out-of-pocket costs for housing, or by getting income from others who are renting your property. Before you get started along the potentially long and windy road to getting a mortgage, take a look at these top five issues to consider for your first mortgage.
- Where will your upfront cash come from? Savings are great, however it’s also important to retain a certain amount of liquidity in case of emergency situations. Make sure that you consider the pros and cons all of the options available even if you had previously discounted them, such as borrowing from your RRSP or family members (and getting a much lower interest rate than anywhere else!).
- Think about getting a mortgage pre-approval, or simply getting your financial ducks in order before beginning the property-hunting process. The mortgage market can move quickly, and making sure that you meet the requirements for a loan and are able to provide the relevant paperwork can give you some peace of mind in terms of how much you can afford before emotions run high and/or a fast-paced, high pressure bidding war begins.
- Look into non-traditional options. This may include working with smaller lenders or getting a private mortgage. One way isn’t better than another way as long as it works best for your financial situation.
- Do you want to use a mortgage broker or a direct lender? The former serves as a middleman between the buyer and the lender and can shop around to get the best mortgage for you, while the latter may be an easier process precisely because there is no middleman. Maybe you want to do both: calling lenders directly and then comparing those rates with those from your broker. Either way, deciding which route you think you want to take before beginning the process will make it easier to locate a mortgage professional.
- Timing can be everything. If you’ve started a new job, moved around large sums of money, or have applied for any other credit recently, it can be beneficial to let the dust settle before applying for your mortgage. Lenders are tightening borrowing regulations, and you want to appear to be the safest borrower you can be, as opposed to someone without a steady income stream and who racks up debt.
This article was provided by WhichMortgage.ca, a Canadian based mortgage assistance website.