HOME PURCHASING
ASTRA MORTGAGE
Now, more than ever, financial institutions are regularly launching new products and programs, making it easier to get into that new home sooner. Today, interest-only loans, self-employment programs, rental purchase programs, vacation property programs, and a host of other innovative financing alternatives are dotting the home purchase landscape, making homeownership a reality for more people than ever. Whether you are first-time buyer or an experienced buyer with excellent credit, we have access to the very best products and rates available across Canada. Give us a call, we think you’ll be pleasantly surprised.
Purchasing a home is one of the most important decisions of your lifetime. It is easy to become overwhelmed at the idea of finding, purchasing and finally owning your own home. You may feel that you are comfortable renting. Following are some good reasons why owning a home can be one of the best investments in your future you will ever make. Instead of paying someone else’s mortgage, you can build equity in your own future.
It will bring a level of comfort that they will see no payment interruptions during a term. So, what do you do if you are self-employed or earn money in a way that you cannot always show conventionally? You need equity! Generally, you will require 25% equity in your home to qualify under a Canadian B lender, but some programs will enable clients to borrow up to 80% of their home’s value.
The freedom of owning your home cannot compare to the restrictions that renter’s experience. You can paint the walls any colour you like, hammer a nail in any wall, decorate a nursery, landscape the yard, anything you like!
Homeowners are different from renters. When you live in a neighbourhood or complex that is primarily owner-occupied, your neighbours, like you, have invested in and care about their property. Naturally, they are willing to invest time and money and effort to improve their property and community, which in turn, improved the value of your property.
Over time rents tend to rise. If you have a fixed-rate mortgage, your payments of principal and interest remain the same. Imagine how much rent might be in ten, fifteen, or even thirty years from now? Which makes more sense?
Rental payments are gone once you have made them. But, with each mortgage payment, you are buying something tangible, building up equity in your home. The longer you own the home typically the larger your equity.
A home is an investment that helps you keep up with inflation. Real estate has historically kept pace with and usually appreciates faster than the rate of inflation.
As long as you make your mortgage payments on time, you can live in your home for as long as you wish. Your landlord will not have control over the sale of your home.
Unlike rent which goes on forever, the mortgage on your home will be paid someday, providing you with rent-free living for your retirement.
When you purchase your home, you are leveraging your money. With as little as 5% down, you can acquire 100% ownership, a great return on your investment.
A renter typically gets no financial benefit from any of the improvements they make on the property, either to the home or yard. But as a homeowner, you can realize some or even all of the costs (and maybe even a profit) from improvements when you sell your home.
Even if your first home isn’t your dream home, you will be working your way up to it. With appreciation and the possibility of a return on your improvements, it may provide you with enough equity to make a down payment on your dream home later.
For some, second single-family homes or condominiums are proving to be good income investments and tax shelters. You will be realizing profits and tax benefits from renters who may not know the benefits of owning a home.
Both indoors and outdoors, you will probably have more space if you own your own home. Even moving to a condominium from an apartment, you are likely to find you have much more room available – your own laundry and storage area and bigger rooms. Apartment complexes are more interested in creating the maximum number of income-producing units than they are in creating space for each of the tenants.
Some people are just not good at saving money and a house is an automatic savings account. You accumulate savings in two ways. Every month, a portion of your payment goes toward the principal. Admittedly, in the early years of the mortgage, this is not much. Over time, however, it accelerates. Second, your home appreciates. Average appreciation on a home is approximately five percent, though it will vary from year to year, and in some years may even depreciate. Over time, history has shown that owning a home is one of the very best financial investments.
SOLUTIONS
HERE's How we can help!
Astra Mortgage Centres mortgage professionals can lock-in an interest rate for you for anywhere from 60 – 120 days while you shop for your perfect home. By locking in an interest rate, you are guaranteed to get a mortgage for at least that rate or better. If interest rates drop, your locked-in rate will drop as well. However, if the interest rates go up, your locked-in interest rate will not, ensuring you get the best rate throughout the mortgage pre-approval process.
In order to get pre-approved for a mortgage, a mortgage professional requires a short list of information that will allow them to determine your buying power. A mortgage professional will explain to you the benefits of shorter or longer mortgage terms, the latest programs available, which mortgage products they believe will most likely meet your needs the best, plus they will review all of the other costs involved with purchasing a home.
Getting pre-approved for a mortgage is something every potential home buyer should do before going shopping for a new home. A pre-approval will give you the confidence of knowing that financing is available, and it can put you in a very positive negotiation position against other home buyers who aren’t pre-approved.
Are banks turning you away because of bad credit? If you don’t have a good credit rating, many lenders will deem you to be high-risk.
Some of Canada biggest lenders have all but ended lending to people who fall short in income and credit. The good news, if you’ve been turned away by traditional lenders, there are options.
Who are the bruised credit lenders in Canada?
There are plenty of bruised credit mortgage lenders in Canada, you just need an expert to help find the right one. That’s where a mortgage broker can help.
Astra Mortgage Mortgage Services focuses on mortgages that are hard fund. Since we only deal with difficult mortgages we have more choices than other mortgage brokers in the industry.
Astra Mortgage works with you in order to best source out the lender, explain the solution and derive a plan to return to ‘A’ sector – resulting in success and efficiency for everyone.
How do I qualify with a bruised credit mortgage lender in Canada?
While it can be upsetting to be turned down by your bank because of bad credit, there are many institutions and alternative lenders who don’t use credit or income to approve mortgages where credit is bruised. Trust companies and credit unions and private lenders are still approving a number of mortgages.
While the stats show lenders are increasingly reviewing every deal case by case, which means fewer mortgage loan applications involving bruised credit are being declined.
It’s important to remember outside of the big banks, equity is more important than credit for many lenders. The larger your down payment, the more likely you are to get approved. If you’re purchasing a home and you don’t have good credit, you should have 20% down, in addition to closing costs.
Mortgage lenders who deal with bruised credit are often willing to look past a variety of credit issues including:
- An unpaid payday loan(s)
- Consumer proposal & bankruptcy
- Tax debt
- Instalment loans, unsecured loans & credit cards in arrears
- Property tax arrears
- Mortgage arrears
As you can see, no matter your credit situation, there’s always a lender out there to help as long as you equity or a large downpayment.
Fixed rate mortgages often appeal to clients who want stability in their payments, manage a tight monthly budget, or are generally more conservative. For example, young couples with large mortgages relative to their income might be better off opting for the peace of mind that a fixed-rate brings.
A variable rate mortgage often allows the borrower to take advantage of lower rates – the interest rate is calculated on an ongoing basis at a lenders’ prime rate minus or plus a set percentage. For example, if the current prime mortgage rate is 5.5 percent, the holder of a prime minus 0.5 percent mortgage would pay a 5.00 percent variable interest rate.
As a consumer, the best option is to have a candid discussion with your mortgage professional to ensure you have a full understanding of the risks and rewards of each type of mortgage.
Your credit report itself is simply a listing of all of your mortgage and consumer debt. Here in Canada, the two main credit reporting agencies are Trans Union and Equifax. Both agencies have a credit history file on anyone who has ever borrowed money. Every time you borrow money, or make a payment on a loan or credit card, the lender then reports the information about the transaction to these two agencies. In addition to credit information, you will also find liens and judgments on your credit report as well as your address and possibly your work history. The accumulation of all of this information is called your credit report.
The information on your credit report varies based on your creditors and what they have reported about you. Potential lenders and others, such as employers, view your credit history as a reflection of your character. Whether we like it or not, our financial habits have a lot to say about the way in which we choose to live our lives.
The credit score, or beacon score, is a number which gives mortgage lenders an idea of your lending risk. Credit scores range from 300 to 900, the higher your credit score the better. The mortgage products and interest rate that you will qualify for are often determined by your credit score.
One thing that many people do not know is that you have the legal right to obtain a copy of your credit report. A mortgage professional can help you obtain a copy of this report and go through it with you to verify that all of the information is true and correct.
The good news is that your credit report is a working document. This means that you have the ability over time, to repair any damaged credit and increase your credit score.
There are many factors, either in the financial markets or in your own life, which you will also have to take into consideration when you select your mortgage term length.
If paying your mortgage each month places you close to the financial edge of your comfort zone, you may want to opt for a longer term mortgage, for instance ten years, so that you can ensure that you will be able to afford your mortgage payments should the interest rates increase. By the end of a ten year mortgage term, most buyers are in a better financial situation, have a lower principle balance due, and should interest rates have risen, will be able to afford higher mortgage payments.
If you are shopping for a mortgage for an investment property, you will likely want to consider choosing a longer mortgage term. This will allow you to know that the mortgage payments on the property will be steady for a long time and allow you to more accurately project your future income from the property.
Choosing the right mortgage term is a unique decision for each individual. By understanding your personal financial situation and your tolerance for risk, a mortgage professional can assist you in choosing the mortgage term which will work the best.
With a little bit of thinking ahead, and a small bit of sacrifice, most people can manage to pay off their mortgage in a much shorter period of time by taking positive steps such as:
- Making mortgage payments each week, or even every other week. Both options lower your interest paid over the term of your mortgage and can result in the equivalent of an extra month’s mortgage payment each year. Paying your mortgage in this way can take your mortgage from 25 years down to approximately 21.
- When your income increases, increase the amount of your mortgage payments. Let’s say you get a 5% raise each year at work. If you put that extra 5% of your income into your mortgage, your mortgage balance will drop much faster without feeling like you are changing your spending habits.
- Mortgage lenders will also allow you to make extra payments on your mortgage balance each year. Just about everyone finds themselves with money they were not expecting at some point or another. Maybe you inherited some money from a distant relative or you received a nice holiday bonus at work. Apply this money to your mortgage as a lump-sum payment and watch the results.
By applying these strategies consistently over time, you will save money, pay less interest and pay off your mortgage years faster!
Many Canadians have successful small business ventures and would not trade the lifestyle for anything in the world. However, many begin to question their lifestyle and business choices when they first attempt to obtain financing for their home, or even something as simple as a new credit card or vehicle. The nature of self-employment income can sometimes leave the self-employed looking like poor credit risks, even though they may actually have a more stable source of income than those who are working 9 to 5 for an employer.
Thankfully, Canadian mortgage lenders are starting to understand the importance of self-employment in our culture, and are making great mortgage programs available to the self-employed to finance their primary residence and even their vacation homes.
Licensed mortgage professionals are experts at assisting self-employed individuals with getting a mortgage, and they will ensure you get the best mortgage available through one of Canada’s largest lenders.
Obtaining a mortgage if you’re self employed has never been easier, and you will be excited to learn that the mortgage products available today are structured to help you succeed in your business and your personal life.