If you’re planning to buy a home in the future, you need to learn more about how mortgages work. After all, getting a mortgage to fund your dream home can be one of the most important decisions you make in life. If you brush yourself up with the right information, you can avoid problems that may complicate your entire buying process.
Here are 8 things to consider before getting a mortgage in Vancouver:
1.Mortgage brokers
If you want to deal with the home loan market quickly, you should find a good mortgage broker who can assist you through the process. They don’t only provide expert guidance, they also have reliable resources to help you choose the most suitable loan option for you.
It’s also important to work with verified brokers like GLM Mortgage Group who have access to a variety of home loan deals. That way, you can get the most out of your choices when it comes to getting the right mortgage loan for you.
2.Income
Typically, mortgage lenders want to ensure you’ll not borrow money that’s beyond your budget. If you like to qualify for a mortgage, you need to have a good source of income because the lenders will look at your ability to pay based on your earnings.
If you’re self-employed, you may have a difficult time getting a mortgage as banks and other lending companies view irregular income as a risk. However, they may consider your application if you have a considerable amount of savings and a good credit score.
3.Down payment
Conventional mortgage loans usually require you to pay 5 to 20 percent of the home’s total value. Fortunately, it’s possible to acquire a mortgage without a down payment. All you need to do is to get acquainted with some legitimate programs that allow you to apply for a mortgage with very little to no money down required.
Furthermore, paying a down payment may also affect the value of equity you have in your home. If you spend a large down payment, you’ll begin with more equity in it.
4.Credit score
Applying for a mortgage is a huge responsibility that you shouldn’t take lightly. Because of the bank’s nature of business, they have to be more cautious when it comes to mortgage applications. And to qualify for one, having a good credit score is essential. If your credit score is 660 or higher, you’ll have a lower interest rate but higher chances of getting approved.
However, if your credit score falls below 620, you’ll get a much higher interest rate and may possibly be disqualified for a mortgage. If you’re looking for a simplified guide on how to keep your credit in good shape, take a look and watch this video,
, for more information.
5.Loan types
When getting a mortgage, you may need to consider some loan types to see if you have a higher chance of getting approved. If you apply for conventional loans, you may not be required to pay for mortgage insurance, but you may have to pay higher down payments.
However, with the government-insured loans, you may deal with different terms and requirements. For example, first-time homebuyers may qualify for mortgage loans, as long as you’re backed up by the Federal Housing Administration.
6.Interest rates
Regardless of the loan types you choose, the calculation of the interest rates may depend on a variety of factors. These include the state of the economy, credit profile, and the current market conditions. If you select a fixed-rate mortgage, the interest rate remains the same.
However, it varies the moment you pick an adjustable-rate mortgage. In addition to interest rates, your lender may charge points which will affect the total value of your mortgage.
7.Mortgage insurance
In most cases, lenders may ask you to have a mortgage insurance to protect them in case you fail to pay your loan. However, not all applicants are required to pay for mortgage insurance, especially when you put down less than 20 percent of the purchase price. This means you can avoid having that kind of coverage if you make a higher down payment, or pay a higher interest rate.
8.Sales price
The sales price of a home can affect your mortgage approvals. Purchasing a house with a sales price higher than your pre-approval limit means you’re required to pay large down payments or ask the seller to bargain and accept a lower offer. Having a cheaper house means a lower down payment and monthly housing payment.
Conclusion
If you want to get a mortgage quickly, conduct your research now and study your financial situation. With the list of factors mentioned therein, you can narrow down your options and be able to shop around for the right mortgage deal that meets your situation. Finally, get to know the entire process involved and enjoy your first new home in no time.
Author Bio:
- Geoff Lee delivers expertise thanks to more than 28 years of experience in all areas of real estate investment. With this extensive knowledge and experience, Geoff founded not only a successful mortgage brokerage firm, but also co-founded the Investor’s Network (IN) – a full-service real estate investment firm. In addition to years of refining his expertise in the Greater Vancouver Area, Geoff promises outstanding customer service and honesty, and guarantees a fast “YES” at the sharpest rate. Geoff never tires of enriching his mortgage industry proficiency, exploring current trends and programs through the Mortgage Brokers Association of British Columbia (MBABC) and Mortgage Professionals Canada (MPC) to better serve his clients. In addition, he shares his expert knowledge serving as a keynote speaker to the Investors Network (IN), the Business Network International (BNI), the Investor’s Network (IN), Canadian Mortgage Professional magazine (CMP), the Vancouver Sun and Mortgage Broker News. Geoff partners with leading Canadian mortgage brokerage Dominion Lending Centres and was awarded the 2012, 2013, 2014 and 2016 DEMS Silver Award, as well as the 2015 and 2017 DEMS Gold Award. Recipient of the Dominion Lending Centres Master Award for 2015,2015 and 2017. Additionally, Geoff’s ongoing quest for excellence in the industry has led to a multitude of accolades, including:
- Ranking in the Top 1% of mortgage brokers in Canada
- Ranking 50th among 18,000 mortgage brokers in Canada
- 2016 Winner of Canada’s Best Customer Service Award
- 2015 Best of the City Award Geoff is a member of the Better Business Bureau (BBB), Mortgage Professionals Canada (MPC), the Mortgage Brokers Association of British Colombia (MBABC), the Chamber of Commerce (COC) and the Business Network International (BNI). This means his clients can rest assured that he applies his expertise and trustworthiness to succeed in every negotiation. Geoff is not only passionate about finding his clients the best property loans, but also about giving back. Geoff and his wife, Kim, are co-founders of Imani Orphan Care, where he serves as Director. Imani Orphan Care supports abandoned, orphaned and rescued children in Kenya, Africa, though life-transforming sponsorships and self-sustaining projects. Geoff, along with Kim and their boys, visit regularly, staying involved at the grassroots level and effecting positive change for these needy children.
