{"id":10073,"date":"2018-08-17T10:10:59","date_gmt":"2018-08-17T17:10:59","guid":{"rendered":"http:\/\/www.roryc.ca\/blog\/?p=10073"},"modified":"2018-08-13T13:34:31","modified_gmt":"2018-08-13T20:34:31","slug":"mortgage-questions-will-help-first-time-homebuyers-on-the-right-track","status":"publish","type":"post","link":"https:\/\/www.roryc.ca\/blog\/2018\/08\/mortgage-questions-will-help-first-time-homebuyers-on-the-right-track\/","title":{"rendered":"Mortgage Questions will Help First-Time Homebuyers on the Right Track"},"content":{"rendered":"<p style=\"text-align: justify;\">Between considering mortgage terms and insurance to viewing properties with your realtor, buying your first home is a busy and stressful time. And when you\u2019re talking about the biggest financial commitment you\u2019ll probably make in your life, it can be pretty intimidating too. While there are mortgage professionals available to provide advice on your home purchase and help find the best mortgage solution for your specific situation, you\u2019ll still need to go into the meeting with your advisor prepared with questions. So even if you\u2019re totally mystified by the mortgage process, these five questions will help set you on the right track.<\/p>\n<p style=\"text-align: justify;\"><strong>1. How do I know if I\u2019m ready to buy a home?<\/strong><\/p>\n<p style=\"text-align: justify;\">\u201cKnowing if you\u2019re ready to buy a home could mean a lot of things and ultimately depends on the person\u2019s own situation,\u201d Wan Li, Mortgage Specialist at TD Group Financial Services, tells Livabl. \u201cPotential homebuyers need to consider how much they\u2019ve saved up for a downpayment, whether they have stable, continuous income and if they anticipate any large purchases or major life events in the future.\u201d<\/p>\n<p style=\"text-align: justify;\"><strong>2. What factors determine my eligibility for a mortgage loan?<\/strong><\/p>\n<p style=\"text-align: justify;\">Unless you\u2019re rolling in cash, most homebuyers will need to apply for a loan from a bank or mortgage broker. However, whether or not you\u2019ll be approved for a loan and the amount you\u2019re eligible for depend on many factors.<\/p>\n<p style=\"text-align: justify;\">\u201cEven if you have a large down payment and have cash available, a bank will not lend you money without a job and stable income.\u201d says Li. \u201cIt\u2019s also better if you\u2019ve worked for the same company for over half a year or at least have passed your probation period.\u201d<\/p>\n<p style=\"text-align: justify;\">Your credit rating is another important factor that can mean the difference between getting approved or denied for your loan. Credit scores range from 300 to 900 and are affected by late payments and debt level. The higher your score, the better chance of being considered for a mortgage.<\/p>\n<p style=\"text-align: justify;\">\u201cIdeally, you\u2019ll want to have a credit score of at least 600 to be approved by a bank,\u201d explains Li. \u201cAny less and you\u2019ll likely need to go to a private B-lender which aren\u2019t as strict, but have higher interest rates and charge administration fees.\u201d<\/p>\n<p style=\"text-align: justify;\"><strong>3. How much do I need for my down payment?<\/strong><\/p>\n<p style=\"text-align: justify;\">Depending on where you live and the total cost of the home, the minimum down payment you need can vary from 5% to 20%. However, if you have less than 20%, you\u2019re going to have to pay for mortgage insurance which protects your lender in the event that you can\u2019t pay your loan.<\/p>\n<p style=\"text-align: justify;\">\u201cIn Canada, those who put less than 20 per cent down will have to pay for the Canada Mortgage and Housing Corporation (CMHC) mortgage loan insurance,\u201d says Li. \u201cIt\u2019s typically calculated as a percentage of your mortgage and is added to your regular mortgage payments.\u201d<\/p>\n<p style=\"text-align: justify;\"><strong>4. What does pre-approval mean and should I get pre-approved?<\/strong><\/p>\n<p style=\"text-align: justify;\">Before you head out and start viewing properties for sale, it\u2019s highly recommended that you first get pre-approved. A mortgage pre-approval will help you determine your maximum budget for your new home and can also give you an edge on the competition should you find yourself in a bidding war. Plus, once you do find your perfect home, you\u2019ll be able to move on it quickly since you know you\u2019re already pre-approved on your finances.<\/p>\n<p style=\"text-align: justify;\">\u201cGetting pre-approved involves filling out a mortgage application and providing documents on your financial history to your bank or lender,\u201d says Li. \u201cThe bank will then look at your current income and credit history to determine if you qualify for a mortgage loan. The assessment will usually include a specific term, interest rate and mortgage amount depending on your situation.\u201d<\/p>\n<p style=\"text-align: justify;\"><strong>5. What\u2019s the difference between the term and the amortization?<\/strong><\/p>\n<p style=\"text-align: justify;\">The mortgage term and amortization period are two common phrases in the homebuying process that often cause confusion for first-time homebuyers. The mortgage term refers to the period of time that you have locked in the agreed upon terms and conditions, including the interest rate and monthly or bi-weekly payments towards your mortgage. Five-year mortgage terms are the most common, however they can range from three to 10 years. By contrast, the amortization period is the total number of years that you choose to pay off your mortgage and can be up to 30 years depending on your down payment.<\/p>\n<p style=\"text-align: justify;\">\u201cIf you put less than 20% down, your maximum amortization period is 25 years, but if your down payment is more than 20%, you can have an amortization period of up to 30 years,\u201d says Li. \u201cHowever, while a longer amortization may result in lower monthly payments, you\u2019re also going to end up paying a lot more in interest.\u201d<\/p>\n<p><a href=\"https:\/\/www.livabl.com\/2018\/08\/5-questions-every-first-time-homebuyer-should-ask.html\" target=\"_blank\" rel=\"noopener\">5 Questions Every First-Time Homebuyers Should Ask Their Mortgage Advisor<\/a> by James Bombales | Livabl<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Between considering mortgage terms and insurance to viewing properties with your realtor, buying your first home is a busy and stressful time. And when you\u2019re talking about the biggest financial &hellip; [<a href=\"https:\/\/www.roryc.ca\/blog\/2018\/08\/mortgage-questions-will-help-first-time-homebuyers-on-the-right-track\/\">read more<\/a>]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9],"tags":[],"class_list":["post-10073","post","type-post","status-publish","format-standard","hentry","category-mortgage"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Mortgage Questions will Help First-Time Homebuyers on the Right Track &#8226; Rory C Real Estate | Oakwyn Realty<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.roryc.ca\/blog\/2018\/08\/mortgage-questions-will-help-first-time-homebuyers-on-the-right-track\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Mortgage Questions will Help First-Time Homebuyers on the Right Track &#8226; Rory C Real Estate | Oakwyn Realty\" \/>\n<meta name=\"twitter:description\" content=\"Between considering mortgage terms and insurance to viewing properties with your realtor, buying your first home is a busy and stressful time. 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