Tips on Getting the Best Mortgages
By Nicole Rodgers
Shopping around for a mortgage is not as difficult as it may seem. Although there is a lot of paperwork involved, comparing offers and searching for a good deal is worth your effort. Before going for a mortgage loan you should understand how things work and then try to get lower interest rates. Here are some tips on getting the best mortgage:
Improve Your Credit Rating
Before you start shopping for a home loan or mortgage, check your credit record. Paying down your financial obligations and getting rid of debt is a good start. Individuals with a poor credit record have a difficult time finding competitive deals. It is highly recommended that you improve your credit score before applying for a mortgage. Credit scores over 620 are usually approved.
Shop Around and Compare Costs
Although you might be tempted to go to a local bank because you have a checking account there, it is advisable that you first research your options to make an informed decision. Contact a broker, use the Internet to get loan quotes and search for information in your local newspaper. Each bank, loan association or mortgage company has its own interest rates, so be sure to evaluate a number of offers from different providers.
Make a Large Initial Deposit
The size of your deposit is very important when it comes to getting a mortgage. The best rates out there are available only to those with a large deposit. The larger the deposit you have, the more money you will save. The good news is that there are a couple of things you can do in order to build up your deposit. Getting an unsecured loan is a viable option. You may also ask your family or friends for help, reduce daily expenses or use your other savings.
Decide on the Right Mortgage
If you decide to apply for a mortgage, be sure to do proper research. Potential homeowners can choose from various types of loans. Some of them prefer a 30-year mortgage, while others opt for fifteen-year fixed rate loans. Evaluate your budget and decide how much you can afford paying every month. Remember to ask each lender and broker about the loan’s annual percentage rate (APR). The APR includes broker fees and points, as well as the interest rate that applies to the loan.
Act Fast
Once you find an offer that suits your needs, act quickly to secure the mortgage. Although you need to do research and evaluate your options, it is important that you act quickly to avoid disappointment and get the best deal out there. You may hire a broker and ask for expert help. A good broker can move quickly to secure funds for you.
Applying for a mortgage loan requires your full attention. Be sure to get all the information you need from several lenders or brokers. Ask about the lender’s requirements for a down payment and try to find out what each fee includes. Make lenders compete with one another for you. Examine your credit report and make sure you don’t borrow more money than you need. Don’t hesitate to contact a broker; he can help find a loan that best suits your needs. Get loan quotes from multiple sources and check the reputation of the brokers and lenders you interested in working with.
Nicole Rodgers has been in the mortgage industry for 4 years; she currently contributes to blogs dealing with ways for people to refinance a home loan and how online trading can help families earn extra income.
Mortgage Home Loan Questions To Consider
By Nancy Smith
You may have dreams of buying your own home but are not able to fulfill those dreams because of lack of resources. Mortgage loans may help you bring your dreams to reality. Mortgage loans are loans that are secured in order to pay for a house or for a piece of property. The property that you purchase with this loan is treated as the collateral on this loan. This means that if you do not make the mortgage payments, then your property will be taken away from you.
There are other mortgage questions that you should consider before you opt for the loan.
What is the principal amount of the loan?
The principal implies the amount that you will need to borrow. It is the value of your house or property after the down payment has been deducted. Based on how much you earn and your credit score you can look around and find out how much banks are willing to offer you.
What type of mortgage you should opt for?
You must find out in advance what type of mortgage loan you would want to take out or is available to you. There are two types of mortgage loans the fixed interest rate mortgage loans and the adjustable rate interest mortgage loans. When you opt for the fixed interest rate loan you pay a fixed amount as payment towards your mortgage every month. However, when you opt for the adjustable rate mortgage loan you pay a lower rate of interest which changes gradually with changes in the market. Thus, you must find out which type will be suitable for you.
How much money can you borrow?
One of the most important mortgage questions is how much can you borrow. To find this out you have to consider various factors. Some of those factors are as follows.
1. Amount you pay as down payment: Down payment is the amount of money that you pay towards your house or property from your own pockets. Your mortgage amount is also affected by the amount that you are willing to pay as down payment. After the economic crisis some mortgage lenders are not granting loan requests if the borrowers are not able to make 20% down payment on their homes. However, the down payment requirement may vary from lender to lender so speak with your mortgage broker or bank. You should also be aware of the fact that you may take out FHA loans or Federal Housing Administration loans by making 3.5 % down payment on your home.
2. Your total monthly income: An important factor that determines how much mortgage you will get is your monthly income. In most cases banks suggest that it is best if your housing expenses are not 25% to 28% greater than your gross monthly income. Thus, you must be aware that the amount that you earn is also an important determinant in how much you can borrow.
3. Your credit score: In order to find out how much you can borrow you must find out the state of your credit report. Your credit score is bound to affect the rate of interest that you are charged with. This will directly affect the amount that you can borrow.
These are a few mortgage questions that you must consider before you opt for a mortgage loan.
This is a guest post by a Community Mentor of MortgageFit and she has been contributing her suggestions to the Community since 2005. Not just that, she has also made notable contributions through the various articles written on different subjects related to the mortgage industry and solved various mortgage questions. Few of her popular articles would include names like ‘Mortgage that you can afford’, ‘Mobile Home Loan with Bad Credit’, and How much mortgage can I borrow?’
Canadian Housing Trends and Affordability
Are you thinking about buying a home in Canada in the next year? If yes, the following information could prove invaluable. The Royal Bank of Canada has released a report outlining the latest housing and affordability trends in Canada.
Housing affordability improved in the third quarter
Bucking its rising trend since the middle of 2009, the cost of homeownership moderated in Canada in the third quarter of 2010. Lower mortgage rates and some softening in home prices, relative to the previous quarter, combined to reduce the monthly mortgage charges associated with owning a residential property at going market values. At the national level, the RBC Housing Affordability Measures fell for the first time since the second quarter of 2009, going down between 1.4 and 2.5 percentage points depending on the housing type (a decrease represents an improvement in affordability). This result reversed almost two-thirds of the cumulative deterioration that took place in the four preceding quarters thereby returning the measures to their levels as of the end of 2009 (for the most part). After appreciating rapidly during the strong rebound in resale activity last year and early this year, national home prices have retreated modestly in recent months, as market conditions cooled considerably during the spring and summer from their earlier boil. While this represented a decline from the second quarter, home prices were still 5.8% to 6.8% higher year-over-year. Conventional fixed-mortgage rates came down in the third quarter, with the five-year posted rate (the basis on which the RBC Measures are calculated) falling more than 50 basis points to an average of 5.52%, entirely reversing the rise in the second quarter.
The improvement in affordability in the July-September period has reduced some of the stress that had been mounting in housing markets in Canada during the past year; however, the RBC Measures continue to stand slightly above long-term averages, suggesting that some greater than usual tensions persist for Canadian homebuyers. In our view, these tensions are unlikely to derail demand for housing in the near term but will act as a restraint on growth in market activity going forward.
Owning a home becomes easier to afford everywhere in the country All provinces saw improvements in affordability in the latest quarter. The most sizeable drops in the RBC Affordability Measures occurred in British Columbia, where elevated property values amplified the effect of the decline in mortgage rates on monthly mortgage charges. Further contributing to the improvement have been lower home prices, particularly for bungalows (which fell 3.0% quarter-over-quarter). Ontario also experienced some notable drops in homeownership costs, pushing down the RBC Measures below their longterm average in the province for bungalows and condominiums. Elsewhere, the affordability improvement in Saskatchewan and Manitoba was especially strong in the two-storey home category, while it was moderate in all housing segments in Alberta, Quebec and the Atlantic Provinces. Alberta and Manitoba are the only two provinces where the RBC Measures stand below their long-term average in all housing categories, indicating to us that there is little stress in these markets.
British Columbia — Some reprieve at last
The B.C. housing market won some welcomed reprieve in the third quarter from the significant deterioration in affordability recorded since the middle of 2009. The reprieve came primarily from lower prices and lower mortgage rates. Amid much cooler resale activity during the spring and summer, and greater availability of properties for sale, home prices either fell (notably so in the case of bungalows) or remained stable (in the case of condominium apartments). The decline in mortgage rates that was felt positively across the country had a most powerful effect on B.C. affordability. The province’s elevated home price levels relative to income amplify the effects on affordability of movements in mortgage rates. In the third quarter of 2010, the RBC Housing Affordability Measures for British Columbia dropped between 1.8 and 5.0 percentage points, representing the largest declines since the first quarter of 2009. Still, all RBC Housing Affordability Measures remained significantly above long-term averages. Very poor affordability is likely to weigh on provincial housing demand in the period ahead.
Alberta — Among the most affordable in Canada
Despite substantially improved housing affordability in the province since early 2008, housing demand in Alberta is still a shadow of its former self from just a few years ago, and there are few signs that it is picking up meaningfully. Market conditions remained quite weak in the third quarter, and buyers have emerged clearly in the driver’s seat, causing home prices to decline (down between 0.6% and 2.2% depending on the housing type) and contributing to further
Saskatchewan — House hunting resumes
Spurred in part by a decline in homeownership costs, Saskatchewan homebuyers resumed house hunting in recent months with home resales in the rebounding since August and reversing most of its slide in the firsthalf of this year. The earlier softening of activity, nonetheless, had a lingering effect on home prices in the third quarter, which fell across all housing types relative to the second quarter. In turn, this lingering effect, along with lower mortgage rates, contributed to a significant improvement in affordability. The RBC Affordability Measures dropped between 1.8 and 2.2 percentage points, which was the most since early 2009. While lower than they were a year ago, the measures are still modestly above their long-term average, thereby suggesting to us that current market conditions are stretching homebuyers’ budgets to a degree. However, those budgets are likely to be boosted from a strong expected rebound in the provincial economy and, thus, family income this year and next.
Manitoba — Quickly back on track
Any concerns that housing demand in Manitoba would slip into a slump dissipated in recent months with housing resales picking up smartly in September and October, swiftly turning the page on a particularly weak summer period. No doubt, homebuyers in the province lately took advantage of fairly attractive affordability, which improved for all housing types in the third quarter. The RBC Measures fell between 0.9 and 2.3 percentage points, reversing one-half to three-quarters of the increase that occurred since the spring of 2009. Lower mortgage rates in the third quarter were particularly helpful in bringing down homeownership costs in the province although some price declines (particularly for two-storey homes) also contributed. Manitoba is one of only two provinces, alongside Alberta, where the measures for all housing types are currently below long-term averages, which will be a supportive factor for demand going forward.
Ontario — Taking a positive turn
Housing market conditions took a positive turn in Ontario in recent months. After four consecutive quarterly increases, the cost of homeownership declined in the third quarter thanks to lower mortgage rates and some softening in property values. RBC’s Housing Affordability Measures fell between 1.3 and 2.4 percentage points, fully reversing the increase in the second quarter. Meanwhile, existing home sales ended their earlier precipitous slide by sustaining three straight gains (on a seasonally adjusted basis) from August to October. This recovery confirmed our earlier expectation that the slowdown in activity in the spring and summer largely reflected various transitory factors – including the HST and changes in mortgage lending rules – that brought demand forward to the start of this year. With the market now back in balance, the recent softness in home prices will likely prove to be a healthy recalibrating following a strong rally.
Quebec — On its way towards stability
The Quebec housing market is making its way toward more stable activity levels. As in other parts of the country, home resales in the province gyrated wildly in the past two years – plummeting to six-year lows at the end of 2008 and then surging to all-time highs at the start of this year; however, the downswing that occurred this spring and early summer turned out to be fairly restrained in Quebec, reaching bottom at levels that were less than 10% below those that prevailed before the housing downturn in 2008. The modest recovery since the end of the summer suggests that activity is being restored to a sustainable path. Supporting this trend in the near term is an improvement in affordability in the third quarter. Following four consecutive increases, the RBC Measures for the province fell 1.4 to 1.8 percentage points (depending on the housing type). Still, the Measures remain close to the pre-downturn peaks and above their long-term average, which will act to restrain growth in demand in the period ahead.
Atlantic — Picking up some steam again
Propelled by stronger activity in the Halifax and, to a lesser extent, Moncton areas, Atlantic Canada’s housing market picked up some steam early this fall. This trend follows a marked cooling in activity in the spring when home resales in the region fell back to the lows reached at the end of 2008 – although not as steep as the lows in other parts of the country. The recent strengthening has tightened up market conditions a little, but it was the earlier loosening that had a dominant effect on property values in the third quarter, which saw some modest price declines in the region. This result, along with the drop in mortgage rates, contributed to lower homeownership costs in Atlantic Canada. The RBC Housing Affordability Measures moved down between 1.0 and 1.5 percentage points in the third quarter, with the levels returning to roughly where they were in mid to late-2009. Overall, housing affordability continues to be quite attractive in Atlantic Canada.
To read the complete report click on the link below.
http://www.rbc.com/economics/market/pdf/house.pdf
Ready to Buy? Advice From A Realtor
By Colette Gerber
Ladies, did you know that it’s a Buyer’s market? And did you know about 35% of people buying their first home are single women? As a group we (yes, I too am single) have more disposable income than any other time in history. After you’ve made the decision to buy, the first step should be to obtain mortgage pre-approval.
Lenders are beginning to recognize the power women wield with their disposable income and are willing to lend generously to single females. Personally, I prefer to use a mortgage broker since they will shop a number of lenders to ensure you get the best possible rate without gender bias. Mortgage pre-appproval gives you clout when it comes time to make an offer to purchase. Knowing that you have financing in place, sellers will take your offer seriously. As well, the pre-approval letter-which you should get in writing- establishes how much you can spend on real estate. This ensures you are looking in the correct price range.
In the current Buyer’s market there is a larger inventory of real estate than there are people wanting to buy. As a Buyer, this gives you the opportunity to look at multiple properties and give some thought as to what you like. For most properties, multiple offers are not currently a concern. This is good news since it takes the pressure off having to make a quick decision. However, having said that, if you find something you really like you should have your Realtor write an offer as soon as possible. If the property is that good, chances are others will feel the same way and you don’t want to take a chance and lose the property.
Let’s talk about Realtors for a moment. Did you know that as a Buyer it doesn’t cost you anything to work with a Realtor? Realtors get paid by the Seller only when a deal completes. Working with a Realtor can save you time, money and inconvenience. Time: they search the listings every day to see if anything suits your criteria so you don’t have to spend time on the computer. Money: when it comes time to negotiate, they will do everything they can to ensure you get the best possible purchase price. Inconvenience: they know the pitfalls a Buyer can encounter so a good Realtor will stay involved in the entire buying process, until they hand you your keys. Women know the importance of listening. They understand you want great bathrooms, need closet space to accomodate your shoes and that you don’t care if the floor is ¼” or ½” real or faux wood. I encourage you to work with a female Realtor who “gets” what you want…..
Colette Gerber is RE/MAX Realtor who works anywhere in the Lower Mainland that the business takes her. She was recently awarded her Accredited Buyer’s Agent designation, joining the 1 ½% of BC Realtors with this prestigious accreditation. You can contact Colette by visiting www.colettegerber.com
Home Is Where Her Heart Is
By Kathryn Haley
TD Canada Trust has conducted polls for women home owners for 3 years. Here are the findings of the latest survey according to the TD Canada Trust website.
Home is where her heart is: 3rd annual TD Canada Trust Women and Home Ownership Poll reveals the growing importance of having a place to call your own
TORONTO, January 20, 2010 – Although financial security continues to top the list of home ownership benefits, the comforts of home are increasingly important to Canadian women. According to the third annual TD Canada Trust Women and Home Ownership Poll, which surveyed women who have purchased a home independently, key features of home ownership, including being able to renovate to suit individual tastes and having a garden, are now more essential to Canadian women than they were in 2008.
When asked to describe the best things about home ownership, Canadian women said it is about making a house a home. Having a place of their own (34%), being able to decorate or renovate the way they want (34%) and having a backyard or garden (32%) were some of the responses that increased dramatically from the first survey conducted in 2008. Women had cited having a place of their own at 22%, being able to decorate or renovate the way they want at 14%, and having a backyard or garden at only 5% back in 2008.
“Even though the comforts of home have become increasingly important to women, the financial reasons for home ownership have also increased in importance,” says Chris Wisniewski, Group Product Manager, Real Estate Secured Lending, TD Canada Trust. This year 44% of women ranked financial security as the best thing about home ownership compared to 23% of a similar sample of women in 2008. Second on the list of best things about owning a home was not having to pay rent or pay other people (38% versus 13% in 2008). “It’s not surprising that the financial reasons for ownership have increased in importance for people. People are looking for ways to feel financially stable again and see home ownership as a way to build equity and invest in their future.”
The financial commitment of owning a home can be a double-edged sword; for many women home ownership offers a sense of financial security yet the financial responsibility can be a headache for others. Twenty-nine per cent of women say that the additional expenses and financial responsibility related to owning a home are their least favourite things about home ownership.
In fact, getting more advice when talking to experts and asking even more questions is something most women surveyed wished they had considered when buying their first home. When asked which topics they wish they knew more about when they purchased their home, 40% of women wished they had more knowledge about the fees and costs associated with purchasing a home, 32% wanted more information about the expected annual expense of owning a property and 30% wanted more information about mortgage options.
About the TD Canada Trust Women and Home Ownership Poll
The TD Canada Trust Women and Home Ownership Poll surveyed women 18 years of age and older from across the country, to explore home ownership behaviour among women. The survey was conducted by Angus Reid Strategies with English and French speaking Canadians using the Angus Reid Forum. The sample size includes 1,000 women who have purchased a home independently. The answers from 361 women aged 20 to 45 were used to compare to the 2008 poll which surveyed this age group exclusively.
So what do you think? Do you agree with the results? Share your thoughts with us in the comments.
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