The mortgage credit is a tool of great help when you try to acquire a new house. If you want to know what it is needed to request this financing product to buy successfully your new place. Here, we give you six tips for you to have into account.
- Keep as “clean” as possible your credit score
In Canada, there are five ranges in credit score. From 300 to 559 is poor, from 560 to 659 is fair, from 660 to 724 is good, from 725 to 759 is really good, and, from 760 to 900 is excellent.
Banks or financing entities look for your credit score to be over 620, which means fair or higher.
- Avoid getting more debts and catch up with the debit that you have
This can be a synonym of an alarm for your loaner as if you many debts, you might in another debt but from giant magnitudes. So, before presenting a request for a mortgage credit, pay what you owe.
- Get your credit history ready
You must know that your credit history will be detailed and inspected in every number and letter. According to Loans Canada, the banks or loaners would notice that you have meet the terms of your payments, if you had had debts in delay or if you have products that have not been paid yet.
- Have a stable job
The financing entities need to check your work records and financing registers that have had for at least twelve months consecutive. This would help them to analyze how high is the possibility of you not meeting the terms of your payments.
In case that you are an entrepreneur, you should demonstrate your annual incomes.
- Choose the mortgage that fits the best according to your financing situation
There are several types of mortgage in the maple leaf country. According to Canada Mortgage and Housing Corporation (CMHC), there are 8 types of mortgages, which are the most common, among there are: conventional mortgage, high index mortgage, open mortgage, close mortgage, fix rate mortgage, variable rate mortgage, assumed mortgage or pre-approved mortgage.
In this link, you can find information in more detail.
- Be conscious of what you can pay
You must consider that this is a debt that would last for years, although, it is not impossible to be paid. You must be conscious since the beginning about the amount you would have to pay monthly to avoid having issues with you loaner.
For example, obtaining a conventional mortgage, which is that the loan have to be a maximum of 80% of the rated value or the price to buy the house. You must start your relationship with the bank paying an initial amount of 20% of the real estate value. This means that between the more expensive tat the real estate is, the more amount that should be the preliminary payment.