Common Mistakes People Make When Looking For Mortgage Financing
While obtaining the right mortgage can help you finance your dream home, the process of applying for mortgage financing can be lined with several complexities. Unfortunately, even the slightest of mistakes can affect your chances of being approved for a mortgage. Finding accurate information on the subject and seeking expert assistance can help you make more informed decisions. To be better prepared and avoid costly errors, Vic Lehan & Associates has compiled a list of the most common mistakes people make when looking for mortgage financing.
1. Assuming that a pre-approval will certainly get you qualified
A pre-approval is an indication that you may qualify for a mortgage. But it doesn’t look at all the factors. Quite often, when someone goes to the bank to get a pre-approval, they don’t even look at credit. Credit is the biggest single reason people are denied financing.
2. Not clearing credit early on
Clients often assume that bad credit is cleared off their credit bureau as soon as it is paid in full. However, it takes six years for items on the credit bureau, good or bad, to fall off completely. As that six-year period moves on that credit has less and less effect on the credit score.
3. Thinking that credit score is all that matters
There are several companies out there that advertise about knowing your credit score. While it is part of the credit mix, it is best to have a mortgage broker look at it to give you the full picture. Other than your credit score, assessing your finances and income is essential when procuring a mortgage.
4. Skimping on the downpayment
The three pillars of mortgage financing are good credit, downpayment, and income. Quite often, people forget investing in downpayment. It’s necessary that you decide where you’re going to source your downpayment from the time you decide to buy a house. Ask a professional mortgage broker to help you look at options to fund your downpayment.
5. Not paying enough attention to income
Income is sometimes a stumbling block for a mortgage application. One does not have to have an hourly job to qualify for a mortgage. Income could be in the form of a pension as well. Another part of the income could be the Canada Child Benefit. This is usually for those who have children twelve or under in age. Banks usually don’t accept that. Income for those who are self-employed also works but first ask you mortgage professional for the details.
6. Focusing only on the interest rate
Clients tend to ask what the lowest interest rate is, but it is only after looking at a full application that a mortgage broker can tell you what you qualify for. Many think that a sliver of a difference in interest rate will save them thousands of dollars. It usually doesn’t. If someone is serious about saving money on interest, then they should put more downpayment or pay with a weekly or biweekly accelerated payment and put some extra money on the mortgage each year.
To steer clear of these and other mistakes related to mortgages, reach out to Vic Lehan. As a licensed mortgage agent in Leamington, ON, I can match you with the optimal mortgage for your situation by assessing your finances and needs. Regardless of your mortgage needs, I can help you save thousands of dollars by giving you some of the best interest rates in town. I offer first time home buyer mortgages, mortgage refinances, mortgage renewals, bruised or bad credit mortgages, private mortgages, and other mortgage services to clients across Leamington, Kingsville, Harrow, Essex, Wheatley, Windsor, and all across Ontario.
To learn more about the services I offer at Vic Lehan & Associates, please click here. If you have any questions related to mortgages, I’d love to hear from you. Please get in touch with me by clicking here.