Thinking of Buying?
...Check out the Don't Do List
With the tightening of credit over the recent years, it's good to know what mortgage lenders consider is a good prospect for a home loan. Now more than ever, banks are looking at criteria that indicates the homeowner is most likely to pay their mortgage on time, for as long as they owe. If you are considering buying a home in Whitby or anywhere in Durham Region this year, its best to try to think like a lender and know what Not To Do.
Don't Buy Big Ticket Items - No major purchases or leases that would create debt of any kind. This includes cars, furniture, appliances, electronic equipment, jewellery, vacations, expensive weddings, etc.
It will be tempting to finance that new sofa or flat screen TV for delivery on your move in date. Wait until AFTER you move in so as not to risk creating debt.
Don't Move Money Around - When a lender reviews you for a mortgage approval, they are concerned about your:
- Bank Account amounts,
- Financial Assets (including RRSPs, GICs, stocks, bonds, vehicle, etc.),
- Debts (including loans, leases, credit cards, child support, rent/mortgage payments, etc.),
- and Credit History
Moving your money around, even if you are consolidating your funds to make it "easier," could make it more difficult for the lender to properly document and account for.
To ensure your Lender sees stability, it is best not to change banks or move your funds around at all until after your closing date. So leave your money where it is until you talk to a Mortgage professional.
Don't Change Jobs - You don't need to be wealthy to qualify for a mortgage but, Lenders do look at your employment history and a steady employment track record helps.
Lenders will require a statement from your employer showing your length of service and how much you earn annually.
If you have been at your current job for less than two years, or have a varied occupational history this can signal risk to a potential lender, which may make it more difficult to obtain approval. It's not to say you will not be able to get a mortgage approval although, Lenders are more likely to loan money to people who have worked for several years with the same company, or who have worked doing the same type of job.
Don't Let Multiple Lenders Check your Credit History & Rating - The frequency your credit history is checked can itself downgrade your credit rating, which could impact your ability to obtain financing.
So don't let multiple lenders each request a credit check. A qualified mortgage broker will check your credit score only once and supply this information to multiple lenders as needed.
Don't Pack up Your Important Papers - Important records, such as T4s, divorce decrees, tax returns, and account statements, should be kept aside and readily available. Duplicate copies can take weeks to obtain, which could delay the closing date of your transaction.
If you're thinking of buying a home in Whitby, Brooklin, or elsewhere in Durham Region, you've come to the right place. Contact me, I'm here to help!
Check out my "Are you ready to Buy a Home?" article here