Mortgage - Home Financing Made Easy

2. Synopsis

3. Top Reasons to Consider Making Lump-Sum Mortgage Payments  You have to understand that your regular monthly installments are only going to tackle the interest and may do a little to lower the principal. The lump-sum contributions are going to cover the principal though. Therefore, it is a great idea to make larger contributions whenever possible to bring the principal down.  By making lump-sum payments, you will end up saving a lot of money on the internet along with saving years on your amortization period – the amount of time you require to completely clear your loan is the amortization period. By reducing this period, you will wind up paying less interest, which is going translate into big savings by the tie you pay off your loan completely.  Expect large savings when making larger payments. For instance, you may end up saving $17,774 in interest if you pay $2,000 per year on your $300,000 mortgage. You will also end up paying off your loan at least 6 years sooner – that is when you have a mortgage at the rate of 2.99% with a 25-year amortization.

4. Worried about Your Mortgage Rate? Know How to Save Thousands!  Do not forget to check what prepayment privileges are available. It is true that with an increase in the interest rate, you will be paying more to meet the interest rate than settle the principal amount. Therefore, it is of immense importance to select a deal that offers prepayment privileges and allows you to make large lump-sum payments to pay your loan faster. For this, you may be better off working with non-bank lenders because they are likely to offer lower rates and throw more generous prepayment privileges your way. Just be sure to consider non-traditional lenders that come with a solid track record.  Be sure to consider penalties when taking out a loan. You should know in advance exactly what you would go through if you ever need to break your mortgage. You may wind up breaking your mortgage for many reasons – some do it after they get divorced, while others may have to do it after losing their jobs. You need to consider those unexpected circumstances because breaking a mortgage could cost you thousands in penalties. Therefore, you should practice care and read the fine print carefully. In Canada, you usually have to pay 3-month's interest upon breaking your mortgage – that is when yours is a variable-rate mortgage. You may end up paying much more than that in case of a fixed rate mortgage – you may have to pay a much larger amount calculated considering your current mortgage rates as well as your remaining mortgage balance. So, be sure to ask your lender to explain their terms and conditions related to mortgage penalties.

5. Interested in a Mortgage Preapproval? Do Not Forget Some Important Points for Success!  You are likely to get a pre-approval without having to go through a lot of hassle if you come with all verifiable information, especially a letter that states your income. You do not have to worry about down payment verification if you can provide a proof of your income. If the lender thinks you have satisfactory income, they might be willing to offer a pre-approval with fewer conditions.  Work with the mortgage broker and ask them to check your credit history and ensure that there is nothing that they would like to be changed. It is true that most lenders are not going to check your credit history at the time of pre-approving your mortgage but they will eventually do it at the time of final mortgage approval. Therefore, it makes sense to have it done as early in the process as possible. At this stage, you may also be able to get important advice from your broker to build your credit history, if of course, you do not have any. You can take a number of steps during the soft stages of buying a home to improve your credit score.  Stay away from making any lavish purchases while looking for a mortgage. Many people do not realize that running up credit cards or making lavish purchases can have a direct impact on how much amount they can qualify for. Your lenders will feel much better when they know they are dealing with a financially responsible person. Similarly, it is going to hurt you if you change your job often; in fact, it can affect how much money you can get if you change your job in 6-8 months of buying a property.

6. Finding it Difficult to Approve Your Mortgage? Learn What Lenders Consider Before Approving Your Application!  Understand that lenders consider the ability to repay a mortgage in different ways. They check your unique circumstances and pay attention to your credit history to check if you have borrowed anything in the past and repaid it too. Interestingly, you are likely to get your application approved if you have taken a loan in the past and repaid it than never taking a loan in the past. They want to know that you know how to manage mortgage payments.  At the same time, they are going to consider your capital. It means that they want to ensure that you have accumulated some assets in the past and that you have something to repay their loan if things do not go as planned. They are also going to be quite concerned about collateral. In case, you are looking for a mortgage, you will be offering your home as collateral.  Experts believe that lenders will always consider your 'capacity' before they approve your application. Capacity, in this case, refers to 'debt servicing'. It means that they will consider that your housing cost stays well below 30% of your gross income. Along with capacity, they are also going to count in your character before finalizing a decision. They will consider the nature of your job and how well you have been managing things in your workplace. They are likely to consider your current residence and the duration of your stay in that location.

7. The End For more details, please visit: https://mortgagesolutionsgroup.ca/mortgage-pre-approval/