Perhaps you're a first-time buyer, and you're finally ready to get onto that property ladder. It's all fascinating, but maybe the thought of a mortgage is terrifying. Don't worry, though, because as long as you plan it and do your research, then it doesn't have to be overwhelming. In fact, a Realtor Vancouver professional can also guide you through the process.
Preparing for a Home Mortgage
Every country is slightly different when it comes to mortgages. However, here are some of the critical points for dealing with Vancouver:
- Credit score
- Banking history
- Income status
- Type of mortgage
One of the first things that a lender will do is check your credit score. The good news is that you don't have to be blindsided. You can get your credit report before even talking to any potential lenders. In fact, it's effortless to get your credit report from the two main credit bureaus in Canada. These are Equifax and TransUnion.
Once you get your report, then you can review your score. From this, you'll get a sense of how likely you can get a loan. In Canada, the minimum score is 600. If you're below that, then there are things you can do:
- Get advice from a credit repair company
- Review your report and challenge any errors by following the bureau's online process
A key component of your credit score is how long you have been banking. This includes how you've managed any loans or credit cards. If you pay on time without issue, then this can actually give you a higher credit score. If you only use a small percentage of your loan, you are also considered a lower risk. You'll then be given a slightly higher score. Overall, you want a good debt-to-income ratio.
Naturally, you can't change your history overnight. Nevertheless, suppose you're not in a rush to buy with a Realtor Vancouver professional. In that case, you can start tidying up your loan status. Make sure everything is paid on time and pay off anything you can.
Another part of a lender's evaluation is your job history and how much you earn. They essentially want to know the likelihood of you being able to make your monthly payments. Therefore, you shouldn't change jobs just before applying for a loan. This makes lenders nervous because no one can guess how successful you'll be in that job or if you'll be made redundant. Clearly, this then puts your loan repayments at risk.
This one basically comes down to math. The more you can put down initially, then the more likely you'll get a better loan. A larger down payment makes lenders more confident because if you're putting down money, then you must already have some to pay their loan.
Type of Mortgage
You might already know that there are 2 major types of mortgages:
- Conventional Loans
- Government-backed loans
There are different requirements for each type of loan. Choosing which one to go for will depend on your personal circumstances, although this is where a Realtor Vancouver professional can guide you. In general, though, you need to review the terms, amortization period, payment frequency, and fixed or variable rates. Again though, a Realtor Vancouver professional will be a valuable source of advice.
How a Realtor Vancouver professional Can help with the Process
- Network of lenders
- Support process
- Hire a loan officer
It's worth knowing that great Realtor Vancouver professionals have a solid network whether you need legal or financial support. They often work with partners, and they'll be able to recommend some to you. Furthermore, you can be sure that these introductions are all professional and with a solid reputation. It might also be reassuring to know that it's illegal for Realtor Vancouver professionals to ask for referral fees. Regardless of the partner, you decide to work with, though, and your Realtor Vancouver professional will always be by your side to support you throughout the process.
An interesting final point to make is that some Realtor Vancouver professionals also act as loan officers in the US. This is not the same in Canada, but it might be worth bearing in mind in case anything changes in the industry. Either way, a loan officer is also a licensed individual and acts as the main point of contact for all borrowing needs. Whatever you do, though, a good start is to talk to your Realtor Vancouver professional for further advice.
Final Recommendations for Getting a Home Mortgage with a Realtor Vancouver professional
Getting a mortgage can feel overwhelming, but as long as you're clear about your timings and budget, then it's simply a case of following a process. Be open with your Realtor Vancouver professional from the start. They can also guide you to properties within your budget and mortgage abilities. You'll be less likely to end up with a nasty surprise after you've set your heart on a home. The more you collaborate with your Realtor Vancouver professional then, the more likely you'll get all your needs matched and so much more.