Getting a mortgage is a big part of your life, and something that should never be taken lightly. It is always a difficult decision, and it’s important that you don’t make any mistakes so that you can get the right terms and price.
Finding the best mortgage rates Canada has to offer can be tough if you don’t know where to look and what to avoid. Here we will take a look at the top five things to avoid when shopping for that perfect mortgage.
Never have a job change
The first thing you need to remember is that a lot of getting a mortgage is to do with how financially stable you are. If you have moved to a new position with a different company then you are seen as a risk. This is because of the general probation periods when you first begin. Similarly, if you are a serial job changer, then you could also be seen as a risk in terms of credit. So, save any job change for after you’ve received the keys.
Be wary of big purchases
A huge TV might suit your new living room perfectly, or that new Mazda might look a dream on your new driveway, but don’t buy them – yet. There are many ratios that lenders look at, but the biggest one is your debt-to-income ratio and this can be affected greatly by a large purchase. High credit with low debt is what you want, so hang on until you have bought the house before going for luxuries.
Keep your accounts steady
By this, we mean that no new accounts should be opens nor should existing ones be shut when you are applying for the loan. You are having a big shake up in your life, and are looking at credit, finances and where the money. You decide that there’s no need for those credit cards you don’t use – well, you’d be wrong. Active and open trade lines can make up for as much as 35% of your score and this means that closing just one of your cards could be the difference between a yes and a no.
Steer clear of being self-employed
Being your own boss is something that many people dream of and, if done right, it can be an awesome way to live life. However, if you work for yourself then it can take two or three years of accounting to get you considered for the mortgage you need. Similarly, those who works for themselves tend to be careful when it comes to tax and while it might seem good to adjust a huge income to say 10 thousand a year, that doesn’t look good to your lender, does it?
Do a thorough search
It can seem like the obvious option to just stroll into your bank and pick the deal that they suggest, but how do you know that this is right for you? Consider comparing mortgage rates with ratesupermarket.ca and you will be able to see which terms and pricing works best for you. A mortgage is likely to last you a long, long time so be sure that you do the right research.