A Guide To Solving Commonly Faced Mortgage Issues
Getting a mortgage is a great way to raise capital, and if you meet the criteria, a somewhat sure way to find significant sums of money when you need it. This said, there are many roadblocks, and with increasing regulations, qualifying for a mortgage can be a challenge. If you are new to the mortgage industry, it can be even harder to figure out the system and find the assistance you need.
To help you get the best mortgage for your circumstance and navigate the otherwise maze-like financial system, Nola Stairs has listed three commonly faced mortgage issues and offered tips that should be beneficial.
1. Problems coming up with the down payment
When purchasing a home, whether you are a first-time home buyer or have purchased many homes before. The minimum down payment for an owner-occupied home is 5% of the purchase price and 1.5% of the purchase price for closing costs.
We suggest you set up a monthly or bi-weekly savings plan with your bank. Have them take a set amount out of your regular account on payday and put it into an RRSP, a savings account, or TFSA. The lenders will allow a financial gift, which would require a deposit to your bank amount along with an accompanying gift letter supplied by the lender.
2. Dealing with a poor credit score
It used to be that if you had a credit score above six hundred, you could qualify for an insured mortgage. This is no longer the case, as in many instances, we are seeing that if your credit score is under 680, you will be unable to get an insured mortgage which means you will have to come up with a minimum of 20% down payment. Another option, in this case, would be to have a co-signor for the mortgage, which would be for about one year, possibly two, until you can qualify for that mortgage on your own. The same would apply if you had slow credit because of a situation and needed some time to re-establish yourself.
3. Unable to qualify for a bank mortgage
You may have a down payment of 25 to 35% down but not have anyone that can co-sign for a mortgage for you, leaving you unable to qualify for a mortgage. In this case, some private investors will lend 65 to 75% of the purchase price to purchase a home or refinance. On these types of mortgages, the rates are much higher. But as long as the home appraises and you can pay, you can generally get a mortgage no matter what. Another thing to note is that on these types of mortgages, you are required to pay a lender fee, a brokerage fee, and lawyers' costs.
For more information and ways to get the best mortgage products, reach out to me at Nola Stairs today. I am a licensed mortgage broker and a realtor in Prince George, BC, with over twenty-nine years of experience. I provide first mortgages, private mortgages, refinance, line of credit, reverse mortgages, etc. My services are available to clients across Prince George, Quesnel, Vanderhoof, Mackenzie, McBride, and Tumbler Ridge, BC.