There are various choices and whilst we recommend you do get your research up to date, we also recommend involving a professional as once you have chosen the mortgage option that is best for you, you will need someone to ensure that the wording of the mortgage contract is fair to you, not only the financial institute.

Remember: Financial institutes will assess your creditworthiness and your ability to service the debt. They will ask if you want a fixed rate or a rate that goes up and down with the credit percentage rate. You will also need to decide the number of years you wish to take to pay off your mortgage. Lastly, the bigger your deposit, the less your mortgage and the more manageable your repayments will be.

Conventional Loans

Conventional loans do not come with insurance or guarantee by CMHC. Usually, it is a fixed rate. This helps you with future planning. They do have stricter approval requirements, and a deposit/down payment is a must. They are usually the most cost-effective. An increase in the level will attract a higher loan percentage rate. There is a lot more literature on these loan types, but it gets quite complicated and would be best if we chatted to you directly.

In a fixed-rate mortgage, you get a rate that is fixed at a specific rate for the lifetime of the loan. There is always a core treasury rate, which seldom adjusts, but if it does, it will be by tiny amounts i.e. half a per cent.

The alternative i.e. a variable-rate sometimes called interest-only or adjustable rate is the right choice for homeowners who are confident that their income will rise substantially over the lifetime of the mortgage. It usually gives you a softer entry to the loan world and may give you a higher threshold to the loan limit. The obvious risks are a) your income doesn’t materialise as expected and b) the interest rate grows to a far greater level than expected.

Finance Info Needed From You

Your eligibility for a loan is calculated via a dual method. The finance house will look at your credit rating, and they will then work out your risk to loan profit value and will also work out a projection of how good you will be at servicing you loan repayments, i.e. capital plus interest.

So your history of credit behaviour will be looked at. If you don’t have credit history or a problematic credit history, some finance houses advise that you don’t apply yet for a mortgage, instead apply for a credit card and run your credit card pristinely for at least six months. This will push up your credit rating. It would help if you were very well behaved with it though, pay it off 100% each month. You aren’t using it for credit; you are merely paying for things that you would typically buy with your debit card or cheque. Take out any other credit facilities you can and pay them off 100% each month. Don’t incur debt; your significant debt is coming in the form of a mortgage. These are avenues to show that you are a poor reformed performer.

You must state all channels of income regardless of what your full-time job is. If you make and sell wooden sculptures on the side, if you rent out a room or any other legal activity.

Fixed-Rate or Floating Rate – Which Is For You?

Another consideration is whether to obtain a fixed-rate or floating-rate (also called a variable rate) mortgage. In a fixed-rate mortgage, the rate does not change for the entire period of the loan. The obvious benefit of getting a fixed-rate loan is that you know what the monthly loan costs will be for the whole of the loan period. And, if prevailing interest rates are low, you’ve locked in a fair rate for a substantial time.

What Should You Do For Your Mortgage Financing?

Take your time to do research on yourself, yes, yourself.  Carefully calculate your long term income projections and that of your partner if they are involved. Plan additional income streams if you need to and if you can, i.e. if you are buying a property with a granny apartment or garage apartment register the rent as future income. Calculate whether you should save for a bit longer to reach a 20% down payment.  This will make you an attractive client to finance houses.

A good broker will guide you through subjective decisions, missed opportunities and long contracts. Come to meet the broker armed with your top-quality research on yourself, and you will get the best advice.

If you would like assistance or guidance on your home loan mortgage financing give us a call today P: 250-758-5524  and let’s start finding a solution for you. We are also available by email E: and online.

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