Guide to Getting a Great Home Mortgage in Waterloo
Buying a home is a major accomplishment and with these tips you will be in a great position. To get the most competitive home mortgage Waterloo has available, you need to get your financial ducks in a row.
Assessing Your Housing Needs
One of the first steps that you should do is take a look at your current housing needs and what they will be five years from now. The last thing you want to do is purchase a home that is too small. What ends up happening is that you will need to buy another home in a few years because your family is growing. When you have a rough outline of your sizing requirements, it is time to begin sourcing for home mortgages in Waterloo.
Securing a Home Mortgage in Waterloo
How much of a down-payment do you have available? If you have less than 20% of the asking price of the home, you are going to require mortgage insurance. The majority of Canadians get this insurance from the Canadian Mortgage and Housing Corporation (CMHC). The CMHC has set out a series of financial requirements that a buyer must satisfy before the mortgage is insured. This insurance is designed to protect the lender in the event you do not pay the mortgage as agreed.
- You’ll typically need a Credit Score of 650 or higher (these terms could change at any time). If you have a credit score over 650, it does not guarantee that you will receive the mortgage insurance but you are one step closer.
- Debt to Income Ratios (DTI) Aside from having a credit score of 650 or higher, another requirement is that your income is enough to service the mortgage and other debts. Typically the lender will not allow you to borrow more than 40% of your income to service debt. If you made $4,000 per month, you could spend no more than $1,600 towards your debts.
By being able to satisfy the CMHC requirements, you would be able to secure a loan from the majority of lenders. These lenders would be at ease knowing that if you default, the Government would cover the debt. You spend time shopping around and try to find the most competitive interest rates. One way to save time and money is by reaching out to a mortgage broker. The broker would be able to help you secure the very best home mortgage Waterloo has to offer.