Sunday, June 4, 2023
booked.net
Reducing our footprint!   For every issue we print, we plant a tree!

No products in the cart.

  • About
    • Contributors
    • Disclaimers
    • Terms & Conditions
    • Giving back
    • Mission Statement
    • Past Issues
    • Where to Find
    • Call us at 613-935-3763
  • Home
  • News
  • Opinions
  • Lifestyle
  • Events
  • Columnists
  • Videos
  • Advertise!
    • Online
    • In Print
    • Classifieds
No Result
View All Result
No Result
View All Result

4 Things You Must Consider Before Applying for a Mortgage

Isabelle Jones by Isabelle Jones
October 17, 2021
in You May Also Like
Reading Time: 5 mins read
9
SHARES
47
VIEWS

Many people are surprised to learn that homeownership is beyond their reach, but it’s true. After all, you can’t afford what you don’t have, and the only way to get into the housing market is to save up for a down payment. If your credit history isn’t squeaky clean, this may be even more difficult than you think. What follows are four things that must be considered before applying for a mortgage–if you haven’t thought about these matters already. If you’re considering buying a home sometime in the future, here’s what you need to know about getting a mortgage before you apply.

Credit History

When lenders refer to your credit history they mean how well you have managed your past debts–how much money you owe and who you owe it to, for how long, whether or not payments are on time, etc. Once you take out a loan of any kind–for a car, buy furniture, get a cell phone–the lender will report this activity to one of the three major credit bureaus: TransUnion, Experian, or Equifax. This information then shows up on your credit report. Lenders use these reports to determine if you have been responsible for managing past debt and whether they think it is likely that you would be able to handle new loans responsibly. This includes checking your bankruptcy history, late payments, and outstanding debts. If your credit is less than stellar, don’t give up hope. You can research online or get assistance from this website on how to process a mortgage without any hassle. Also, keep in mind that there are lenders that specialize in working with people who have credit problems and/or low incomes. Try looking for a non-profit or community-based lender to help you get started or talk to a mortgage broker about what might be possible for you if your score is slightly lower than the average borrower’s.

You might also like

Make Your Sophisticated Home and Office with Canvas Prints

Tips for Choosing the Perfect Engagement Ring

The Advantages of Online Auctions

Income

What kind of income will you need to qualify? The more money you make, the easier it will be for you to qualify, assuming that other requirements discussed below can be met as well. If all other factors look good but your income isn’t quite high enough yet, consider waiting until it is either slightly higher or wait until your income increases in the next year. Most people get their income from regular jobs at large companies, but alternative sources of income should still appear on any application for the mortgage you submit. Such income could come from an individual contract with a client, a business partnership with a colleague, or even work you do from home. Don’t let the idea of income from outside sources deter you from applying for a mortgage in the future. There are always ways to show that you can repay a loan by adding up all your monthly income and then making sure it’s enough to cover your monthly expenses.  

Credit

The two main things that affect whether or not you can get a mortgage and how much you can borrow (and therefore how much house you can afford) are your credit history and your income/debt-to-income ratio. These factors might be enough to rule out a mortgage entirely so it’s best to be prepared ahead of time. If you have bad credit but good income, don’t give up hope–you may still qualify for a mortgage through a high-risk lender or with the help of someone who specializes in low documentation loans. If you have good credit but low income, lenders will try to see if they can bump up your monthly housing payment to something you can afford by adjusting the length of your mortgage, interest rate, and other housing expenses.

Mortgage Insurance 

If you’ve been paying attention to the news over the past few months, you know that rules governing who qualifies for a loan have become much stricter since the financial crisis of 2008. One fairly recent requirement is that if you put less than 20% down on a home, a lender feels safer about making a loan to someone who has demonstrated they are able to make monthly payments if their income were to decrease or expenses were to increase. In order to do this, they require what is called private mortgage insurance (PMI). If PMI sounds familiar it may be because when you bought your car or signed up for cell phone service in the past, you were offered an insurance plan that covered you if you got into an accident or lost your job. That’s what PMI does for your mortgage: it insures the lender against a loss in case you default on your loan. It is typically paid in a monthly premium and added to your housing payment so each month when you pay your mortgage, part of that amount goes towards paying off both your loan and the insurance premiums. 

It’s important to remember that even though PMI makes it easier for lenders to extend a loan, it also costs you money. In addition to your monthly housing payment increasing by the amount of the premium, you will typically need to pay an upfront fee and then a smaller yearly fee in order for this insurance coverage to continue throughout your mortgage term. If at any point during the life of your loan you manage to accumulate 20% equity in your home (the difference between how much you paid for the house and what it is worth), many companies require that you cancel your PMI. And if you suspect you will be able to turn in equity in less than 10 years, there are other options such as piggyback loans or using other sources of credit such as a HELOC that may help you lower your monthly payment and avoid paying PMI altogether.

These are just four of the more common factors that lenders look at when considering whether or not to extend the financing for a home. There are many others such as how many times over the past few years you’ve moved, what kind of daycare expenses you have, if you support any family members financially, or if your job is stable enough for the lender to feel comfortable with their investment–and while it’s impossible to consider each one in-depth without writing an encyclopedia on home loans, it’s important to be aware of them before approaching a mortgage broker so that you can make sure all other aspects of your finances are in order.

Author

  • Isabelle Jones
    Isabelle Jones

    Isabelle writes stories giving various tips on various topics. These are for informational purposes only and in no way intended to substitute advice from experts.

    View all posts

Next Post

4 Things You Should Know About Taxi Accidents 

Subscribe
Connect with
I allow to create an account
When you login first time using a Social Login button, we collect your account public profile information shared by Social Login provider, based on your privacy settings. We also get your email address to automatically create an account for you in our website. Once your account is created, you'll be logged-in to this account.
DisagreeAgree
Notify of
Connect with
I allow to create an account
When you login first time using a Social Login button, we collect your account public profile information shared by Social Login provider, based on your privacy settings. We also get your email address to automatically create an account for you in our website. Once your account is created, you'll be logged-in to this account.
DisagreeAgree
Please login to comment
0 Comments
Inline Feedbacks
View all comments

Inner Site Sidebar

Advertise Here
Facebook Twitter Instagram Youtube TikTok
Don't miss anything!

Get notified of all our new news by ringing the bell at the bottom left corner!

Content Safety

HERO

theseeker.ca

Trustworthy

Approved by Sur.ly

2022
The Seeker Newspaper is located at 327 Second Street E., Cornwall, ON K6H 1Y8 -- All rights reserved
The Seeker does not accept responsibility for errors, misprints or inaccuracies published within. The opinions and statements of our columnists are not to be presumed as the statements and opinions of The Seeker, and should not substitute professional or medical advice.
ISSN 2562-1750 (Print)

ISSN 2562-1769 (Online)
No Result
View All Result
  • Home
  • News
  • Opinions
  • Lifestyle
  • Events
  • Columnists
  • Videos
  • Advertise!
    • Online
    • In Print
    • Classifieds

© 2023 Reducing our footprint!   For every issue we print, we plant a tree!

You were not leaving your cart just like that, right?

Enter your details below to save your shopping cart for later. And, who knows, maybe we will even send you a sweet discount code :)

wpDiscuz
0
0
Would love your thoughts, please comment.x
()
x
| Reply
This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.
Go to mobile version