Surefire Ways to Get a Mortgage in Kitchener
Unless you are very wealthy, you will need a mortgage to buy a home. We have put together these surefire tips to secure a mortgage in Kitchener. Your local Credit Union or bank, will offer a mortgage but there is no guarantee it will be competitive. These financial institutions typically focus on lending to customers with good credit and stable income. If you are self-employed or had credit challenges in the past, these financial institutions are going to say “application denied”.
Credit Challenges Seek Out a Kitchener Mortgage Broker
While the “traditional” lenders may decline your mortgage application, your local Kitchener mortgage broker may be able to solve that problem. We are living in a modern economy where the conventional sources of income are no longer conventional. Your mortgage broker will seek out lenders that provide financing to individuals like yourself. Something that you must do, regardless of situation is come up with a down-payment. If you cannot come up with a down-payment then the mortgage will need to be insured by CMHC (Canadian Mortgage and Housing Corporation). This is a crown corporation that protects lenders in the event a borrower defaults on their loan. Along with meeting the credit requirements of the CMHC, you also need to meet the debt servicing requirements.
- Debt to Income (DTI) This is a ratio that lenders and your mortgage broker uses to determine how much per month you can afford to put towards your debts. It is usually in the 40% range but it varies. If your current debts are high, it reduces the maximum amount of mortgage you would can secure.
- Appraised Value of the Property. When you want to buy a home, the mortgage provider is going to request an appraisal to be performed by one of their approved appraisers. The cost of this appraisal is paid out of your pocket. The lender is going to base the mortgage on the amount the appraisal reflects. So if the seller is asking for a higher price than what the lender believes it is worth, you will either need to come up with more cash or find an alternative home.
There are many additional variables to take into consideration which is why you need to seek out a broker that specializes in Kitchener mortgages.