Finding the right home can be daunting. Finding a lender to finance the purchase can be worse. Here are a few tips that can help you make the best choices before you start shopping for a Mortgage or Home Equity Line of Credit (HELOC).
Not knowing how much house you can afford and all the costs associated with ownership.
As a first time homebuyer if you haven’t considered how much a home is going to cost to purchase and maintain, you are not alone. This is the most common mistake first time buyers make. They often spend a lot of time on real estate websites, looking at floor plans and dreaming of cold drinks on their own deck at the height of summer.
Make sure to talk to a lender before hand and talk to other home owners about what unexpected costs they have faced in their home ownership journey.
When talking to a lender, they can help you look at your financial situation to determine how much you can qualify for, but a good lender will also help you determine how large a monthly cost is reasonable for your situation. Don’t go for the top of your qualification, if it is going to leave you struggling paycheque to paycheque.
Going with the first lender you see.
The Canadian lending market is highly competitive. As such, shopping around for the best deal can save you thousands of dollars in interest annually. This is money that you can save by simply taking the time to talk to more than one lending institution or broker.
Creating a big credit rating problem while shopping around for a lender.
The higher your credit score, the better a lending rate you will get. Credit scores go down every time a lender looks into your credit history creating a “hard hit”. Many buyers will go to more than one lender to determine what kind of financing they can qualify for. Every lender who does a credit check will create one of these ‘hits’ to your credit score, this will make it harder and harder to obtain financing or other credit if your score drops too low.
For a small fee, prior to seeing any mortgage broker, bank or other lender, any buyer can first go to www.equifax.ca or to www.transunion.ca to get their credit report and score. Taking these in with you when meeting with banks or brokers will allow them to see your credit situation without having to do a search themselves. This will assist them in finding the right lender for you without creating problems with your credit score. Each report is valid for 3 months, allowing you time to shop around for the best rates.
Once you find the right lender for you and are read to being the purchase process, they will then need to do a full credit check through their system, but this will be the “hit” to your credit in obtaining financing.
For more ways to finance your home or for recommendations on reputable lenders and Mortgage Brokers, in Saskatoon and Warman, contact Marla Janzen at www.marlajanzen.ca.