For most people, the purchase of a home is the largest purchase they will make during their lifetime. At AMLS, we want to educate our clients so they are aware of the many mortgage options available to them prior to their purchase and closing date. Ensuring they have the right information to make an informed decision to meet their needs now and in the future.
Today’s 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 home ownership a reality for more people than ever.
In Canada there are generally two ways to get a mortgage: From a bank or from a licensed mortgage professional. While a bank only offers the products from their particular institution, licensed mortgage professionals send millions of dollars in mortgage business each year to Canada’s largest banks, credit unions, trust companies, and financial institutions; offering their clients more choice, and access to hundreds of mortgage products! As a result, clients benefit from the trust, confidence, and security of knowing they are getting the best mortgage for their needs.
Whether you’re purchasing a home for the first time, taking out equity from your home for investment or pleasure, or your current mortgage is simply up for renewal, it’s important that you are making an educated buying decision with professional unbiased advice.
Get pre-approval before shopping for that new home to give you piece of mind that once found, your financing is secure.
When shopping for a new home, be sure you are pre-approved. With a mortgage pre-approval, a licensed mortgage professional can do a more complete verification prior to sending you shopping for a home. Giving you piece of mind that when you find your dream home, your financing is in place to make the purchase within the budget you have.
The mortgage professional that you work with to get pre-approved will let you know for certain what you can afford based on lender and insurer criteria, and what your payments on a specific mortgage will be. Our AMLS 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. An AMLS mortgage professional will explain to you the benefits of shorter or longer mortgage terms, the latest programs available, which mortgage products they believe will best meet your needs, plus they will review all of the other costs involved with purchasing a home. Ensuring no hidden or on-forseen costs come up when closing on your new 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.
Our Mortgage professionals will help you make the decision between fixed or variable rates easier to understand.
When buying that new home the decision to choose a fixed or variable rate is not always an easy one. It should depend on various factors, including your tolerance for risk as well as your ability to withstand increases in mortgage payments. You can sometimes expect a financial reward for going with the variable rate, although the precise magnitude will depend on the economic stability.
Fixed rate mortgages.
This often appeals to clients who want stability in their payments, manage a tight monthly budget, or are generally more conservative with their finances. 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.
Variable rate mortgage.
Variable rate mortgages 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. When making the decision between variable or fixed rate mortgages the best option is to have a candid discussion with an AMLS mortgage professional to ensure you have a full understanding of the risks and rewards of each type of mortgage. We provide the information you need to make a sound decision for your financial needs now and in the future.
Your credit rating affects all aspects of your financial activities. We help you utilize your credit and get the best rates available.
As credit has become more and more abundant in our society, your credit report, and thus your credit rating, has become more important in your daily life. Your credit rating affects all aspects of your financial activities when it comes to borrowing money. Your credit rating also has the ability to affect the job you get, the apartment you rent, and even the ability to open a bank account. 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.
By understanding mortgage terms and rates you can save the most money and choose the term that is right for you.
Choosing the mortgage term and subsequent rate that is right for you can be a challenging proposition for even the savviest of homebuyers. By getting the right information and understanding mortgage terms and rates and what they mean, you can save the most money and choose the term that is right for you.
Choosing a Term.
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. So 10 years into your mortgage, when your financial circumstances have changed, 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 consistent 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. At AMLS we help clarify the pros and cons so you can make the right decision based on your personal financial situation and your tolerance for risk.