Monday, March 28, 2011

How to Obtain an Ontario Mortgage Approval at Mortgage Terms that Fit Your Budget

For most people, buying a home is the biggest investment they will ever make. It can be both exciting and stressful, especially when it comes to the financial aspect of it. Before you even start shopping for that dream home, it is a good idea to crunch some numbers to see exactly what you can afford. So how do you get approved for an Ontario mortgage at rates that fit your budget?

Get all your eggs in one basket before you approach an Ontario Mortgage Broker or Brokerage. Create a financial report card that will detail in black and white exactly where you stand financially. The report card can contain the following information:

• Any outstanding consumer debt like credit cards, lines of credit, etc.
• A list of assets such as vehicles, property, investments, etc.
• A list of expenses including credit card payments, loan payments, utilities, car payments, groceries, insurance, etc.
• A history of consumer debt payments – do you pay your bills on time? Do you pay the balance in full or carry the balance month to month? Have you ever been contacted by a collections agency?

Once you have completed the financial report card, you should know what you can afford based on your income versus your debts and other monthly obligations. This is where the true research begins.

If your credit score is low or a traditional bank will not approve you for a mortgage, an Ontario Mortgage Broker also has access to many alternative lenders who may be more flexible with mortgage approvals. Additionally, an Ontario Mortgage Broker can guide you through a list of ways to repair your credit or increase your credit score to improve your chances of getting approved for a mortgage.

To get approved for an Ontario mortgage with the best mortgage terms that fit your budget, consider dealing with a licensed Ontario Mortgage Broker. An Ontario Mortgage Broker has built a solid relationship with banks and lenders to ensure the best mortgage terms possible. Working in tandem with that Ontario Mortgage Broker, visit your local banks or financial institutions to determine what mortgage rates they are currently offering based on the amount you believe you will need approval for. Take this information to your Ontario Mortgage Broker to see if lower rates are available.

Remember that the Ontario mortgage approval you receive must be on terms that fit your budget. Ask your Ontario Mortgage Broker to compare existing rates to make sure you get the best deal you need for the dream home you want to buy. Getting approved for an Ontario mortgage with terms that fit your budget is possible – it just requires a little research and a trusted Ontario Mortgage Broker.

For more information visit http://www.gtamortgagematters.com/

Monday, March 14, 2011

How to get Approved for the Lowest Interest Mortgage in Canada

If you want to get approved for the lowest mortgage interest rate in Canada then you are going to have to ensure that you are in tip top financial shape.

The lowest interest rates are offered to consumers who have excellent credit and a strong financial profile. So how do you know if that’s you?

First, request your credit report from Equifax. Lenders want to see that you have a minimum credit score/FICO score/Beacon Score of 680. Other things that are revealed on your credit report (even if your credit score exceeds 680) that the bank will frown upon are:
1. Too many applications for credit
2. Late payments
3. Too many credit products
4. Credit products that are near, at or over their limits

They also want to see that you can prove your income. Typically the bank will ask you to provide a T4 or paystub if you are employed. If you are self-employed the bank may ask you to provide two years of tax assessments.

They will also want to see that you have good stability and that your monthly payments to credit do not consume too much of your income. Your debt service ratios are calculations that your bank uses to measure what percentage of your gross income is consumed by housing and debt payments. As a rule of thumb your housing payment should not exceed 30% of your gross income and your housing payments plus consumer debt payments should not exceed 40% of your income.

These are all things that you should think about before you start shopping for a mortgage. Many consumers only approach a mortgage broker when they want a mortgage. A mortgage broker is an excellent resource to help you look at your financial profile and find ways to improve it so that you can qualify for the lowest mortgage interest rates that are offered in Canada.

For more information please visit www.gtamortgagematters.com.

Monday, March 7, 2011

Time to Lock In Your Mortgage If You Want Canada’s Best Mortgage Rates

Given the fact that Canada has raised its lending rate three times in the past year, now is a good time to look at your finances and consider locking in your mortgage. The Canadian economy is improving and one sign of this is the fact that the Bank of Canada has raised rates.

The Bank of Canada also recently cautioned Canadians about overuse of credit as the average Canadian household is carrying too much debt. This further signals that they want Canadians to reduce their debt because rates will likely continue to rise as long as the economy can sustain it.

If your household is carrying more than $20,000 in credit card debt, you may want to consider how you can use your home to improve your overall financial situation.

As the Canadian economy continues to improve, the Bank of Canada will continue to increase its lending rate. Refinancing your mortgage to consolidate debt can be a great option if you structure your new mortgage properly.

First, consider if it is time to lock into a fixed rate mortgage and commit to a longer mortgage term to avoid any fluctuation in your mortgage rate. Locking into a fixed rate mortgage could ensure that in the years to come you will have Canada’s best mortgage rate, even if the Bank of Canada’s lending rate continues to increase in the months and years to come. If you are trying to achieve short term financial goals and think you may be selling in the next 24 months then it may be a better choice to stay with a variable rate mortgage.

Second, when refinancing your home to pay debt, ensure that you reduce your mortgage amortization. For example, if you are currently 22 years into a 25 year mortgage amortization, do not refinance the mortgage back out over 25 years. You just wouldn’t believe how many people do this and the result is that you will start your interest all over again. If anything, in consideration to the new debt you are adding to your mortgage, consider reducing your mortgage amortization by one or two years.

If you want to lock in your mortgage and obtain Canada’s best mortgage rate consult your local mortgage broker and visit http://www.gtamortgagematters.com/

Tuesday, March 1, 2011

Do Variable Rate Mortgages Offer Canada’s Best Mortgage Interest Rate?

Generally fixed rate mortgages bear slightly higher interest rates than variable rate mortgages. This is because with a fixed rate mortgage the bank is guaranteeing your rate for a period of time no matter what happens in the economy. If Canadian interest rates go up and you have a fixed rate mortgage, your interest rate will stay the same.

Fixed rate mortgages also usually compound semi-annually (2 times per/year) where variable rate mortgages usually compound monthly (12 times per/year). If a bank it offering a variable mortgage rate that is within 1% of the fixed rate mortgage then the “amount” of interest that you end up paying is almost the same.

The reason variable rate mortgages are often offered at lower interest rates is because the interest floats with whatever the Bank of Canada lending rate is. If the Bank of Canada increases its lending rate and you have a variable rate mortgage, your interest rate will be increased accordingly.

In the past 10 years Canada has seen historically low interest rates and so many Canadian have gotten comfortable with variable rate mortgages while to the consumer they bear a higher risk. Low interest rates are a sign of economic instability and so when they are extremely low, they have nowhere to go but up. In Canada the Bank of Canada has announced 3 interest rate increases in the past 12 months.

So how do you decide what type of mortgage is best for you? Well that depends on your financial goals. If you plan to be in your home 5 years or longer it may be a good time to see what fixed rate mortgages are available. If you plan to move in the next year or two a variable rate mortgage may make more sense because interest rates are still very low and so you have less risk by choosing a variable rate mortgage and watching the economy. Most Canadian banks that offer variable rate mortgages offer an option to lock in.

The best thing to do to find out your options is consult a local mortgage broker. Mortgage brokers generally have relationships with all of the major Canadian Banks. They also deal with other banks like ING and PC Financial who offer mortgage financing in Canada but do not have a retail presence. A mortgage broker can educate you about your mortgage options and help you plan for a mortgage that will ensure you achieve all of your financial goals. For more information visit www.gtamortgagematters.com.