Get Advice Well Before You Buy

I've had many clients come to see me anticipating the purchase of their first home. But often that excitement is soon replaced by disappointment after I've examined their financial situation. If only they had come to see me a year ago, 6 months ago maybe they would now be prepared to buy.

Financial Institutions base their decision to lend money for a mortgage on many factors. The big one is credit. There are simple things the client can do to their credit to be in a better situation to buy. Make sure they have at least 2 revolving credit lines. Revolving credit is payments which could change every month such as a Credit Card. Those credit lines should have a limit of at least $2000. Many Financial Institutions also want to see at least 2 years history of activity on those cards.

The second thing about Credit is the balance on those cards. Your credit score increases if the balance on the card is not near the limit. Try to keep your balance less than 70% of the limit. If you are at 50%, even better. The key here is to use your card regularly but pay it off as soon as you can. So if you have a high balance on your credit cards, pay them down before allowing your credit bureau to be pulled.

The final thing I will mention is the number of inquiries on your credit bureau. When applying for a credit card, looking to buy a car or a house, companies will inquiry about your credit history. Too many inquiries, hurts your score. If you have many companies checking into your credit, it may look like you are desperate for money. A few checks a year is fine. But if apply for a credit card at every kiosk offering a free T-shirt, then you're credit will suffer. Keep this point in mind not only when getting ready to buy a home but once you're in your home as well.

Aside from Credit there is also the issue of saving for a down payment and closing costs. There is also your employment history to keep in mind. Most Mortgage Brokers will work with you for free to help get you get ready. It's never too early to meet with one, even if you are planning to buy years down the road. We will help put you on the road to becoming a home owner.

This blog is courtesy of Kevin Babin from Dominion Lending Centres in Saint John. For more information on mortgages you can contact him at 506-642-5363

Great Mortgage Questions - Part Two

Now that we have the two key questions under our belt and by now hopefully you have some answers from your lender here are a few more that may help you land the best deal for you and your family.

Now that you have a rate that you’re happy with and are ready to go shopping for your new home ask your lender this “ How long will you hold that rate for me”? Depending on who you are dealing with you may find that it is only for the next 30 to 45 days and if so you had better get moving. Some lenders will provide a very attractive rate but only for a short time period, it’s their way of getting some quick business. Or you may find yourself being offered a rate but locked in for the next 6 months. Sounds great but if you find something fast will they give you a better rate for a quick close?

So the second questions today should be if “rates drop will you automatically lower my rate”? And “how will I know.” I think the reality is that you always have to ask before you sign if this is the very best you can get. It’s difficult to be so aggressive but hey it’s your money and nobody is going to look after it better than you!!!

If you haven’t already noticed when you start shopping for a home, real estate agents and sellers will ask if you are pre-approved. The reason they are asking is to determine how serious you are! If you are prepared and hand over a pre-approval letter or can say you are pre-approved with so and so from this or that bank watch how you get more of their attention. Believe it or not there are a lot of tire kickers in the market and nobody wants to waste their time only to find out this buyer has no intention of buying. So the final question for today is “Can I get pre-approved for this rate and will you put it in writing”? This option will give you some negotiating leverage and we all know any leverage is good leverage.

More great mortgage questions coming soon from Oakhill Realty or call us today and we’d be happy to share all our knowledge with you.

Great Mortgage Questions

The time has come to get a mortgage for the new home you are about to purchase or its time to renew the mortgage you have. Well if it is a renewal most of you will go to the same lender you have always used and take whatever it is they offer you and walk away till it comes up again. In either case please do yourself a huge favour and if you only do one thing ask this question;

“Is the rate you’re quoting me the lowest I can possibly get, given my qualifications and preferences?”

What an awesome question! I can only imagine the shock on most lenders faces when someone has the internal fortitude to stand up for themselves and ask this one. The stammering that would go on in most office would be hilarious

If you find that one to confrontational how about this one;

“If I find a lower rate for a similar product elsewhere, will you match it?”

My guess is that the answer would most likely be "yes" and if you are quick follow this up with our first question. Our advice would be to never sign the dotted line unless you have a couple of comparable quotes or know you have the best deal.

Having said that there is also the relationship question you need to ask yourself. Will this lender be here for me should I need a favour down the road? May be times are difficult and you need to skip a payment or two or you need to change the agreement because something significant has happened in your life like the loss of a spouse. How will this lender behave if all you have done is beat them up at every possible opportunity?

There is always lots to consider but go in prepared and know what it is you need. More good questions to come, stay tuned or like and follow Oakhill Realty on facebook.