There are many aspects to consider when applying for a mortgage that best suits your needs. Even a minor inaccuracy can have an expensive consequence, so here’s a quick guide for you to consider before you proceed.
What type of property?
It is crucial to understand the intended use of your property as this will determine what you should be looking for in the home.
Primary Residence, your family and yourself will be spending majority of your time in this home and it is important that the home has all the features that is unique to you and your family. You should also consider the amenities and location of the property.
Secondary Residence This property generally a cottage is something that is more comfortable but should not require a high degree of investment in luxurious amenities. Location is also not a key factor in determining this home so you can be flexible with where to purchase it.
Investment Property. The intention of purchasing an investment property is to generate income or positive cash flow. It is crucial that this is property is a desirable location and should be viewed from the potential tenants’ point of view.
It is highly recommended to work with a qualified real estate agent who will be able to understand these nuances and can effectively chose the right property for you.
Obtaining a Mortgage in Canada
Once you and your realtor have found the home that best suits your needs, in most cases you are required to obtain financing. You can either directly go to a Canadian Bank or Mortgage broker.
Choosing a Mortgage broker over a bank is explained clearly in this article for a better understanding. Choosing a mortgage broker will help you identify a plan that suits you the best as they have a clear understanding of the mortgage marketplace
Factors to consider when getting a Mortgage in Canada
Value of the property, repayment value over several years and the frequency of payments should be your initial set of considerations. As a rule of thumb, make sure any costs related to the home do not exceed 35% of your monthly income.
0.1 Term and interest rates
When obtaining your mortgage, your terms can range from a few months to even years. Depending on your balance of payment, you can keep renewing your mortgage.
Factors like a fixed or a variable interest rate, penalties required to pay if your mortgage is broken and how soon your mortgage will have to be renewed will have an impact on your total cost of borrowing.
0.2 Payment frequency
This refers to how often you will be required to repay your mortgage. Starting from weekly payments, two payments a month, or making one payment a month, you can even choose accelerated payments. Accelerated payments allow you to make a payment that adds up to cover an extra payment due, which will save you tens and thousands of dollars of interest.
0.3 Credit Rating
Your credit score and credit repayment history will impact which lenders are willing to accept your loan. It is important to pay all your bills on time and more importantly it is crucial to not over utilize any credit products. If you are allowable credit limit is $1,000 a general rule of thumb is not to exceed 75% of this allowable limit, in this case, you should not exceed $750.
It is also important to not shop your transaction with multiple lenders as every time your credit report is accessed by anyone but yourself it will cause the beacon score to decrease.
0.4 Getting approved with a Mortgage Lender
After carefully considering all the factors mentioned above you can reach out to one of the leading mortgage brokers in Canada, Mortgage24. Their services branch into Home Purchasing Mortgages, Mortgage Renewal, and Private Mortgages. With over a decade of experience in the financial and real estate industry, they follow a unique customized approach for every client. Following a discussion of your requirements in the initial meeting, Mortgage24 will devise a strategy to help you invest in your dream home. With their competitive rates, you will be guided through the process with a strategic road map provided to ensure long-term financial success.
Obtaining a mortgage in Canada is a step closer with Mortgage24!
For more information call our hotline 416 242 8205
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