Tips for Financial Success
By Callum Greig, Mortgage Professional
Financing for today’s competitive market is a key piece for success in winning the home of your dreams.
While few buyers actually purchase with cash, many proceed without a subject to financing as part of their offer. How do they do it? Simple: they ensure key parts of their application for financing are properly prepared and they ensure there is strong communication between themselves, their experienced mortgage professional and, of course, their realtor.
Here are some tips for success when it comes to setting up the financing on your NEW home:
1) Disclose everything about your financial past. It is much easier for your mortgage professional to head off any concerns with the prospective lender if they are aware of all details of your application up front; both the strong parts and the weaker points.
2) Arguably the most important task for financial success: make sure your mortgage professional has all of the necessary documentation from you. Ideally, this should be collected and given to your mortgage professional upfront so that they can submit it as one complete bundle to the lenders desk, as lenders will typically favour an application that comes to them with all supporting documentation in order. When first meeting with your mortgage professional, ensure they give you the complete list of documentation you will need. This will include updated pay stubs, letters of employment (if applicable), and proof of down payment. If you have not filed your taxes, be sure to do this as soon as possible, before making an offer.
3) Have a Plan B in place. If, for whatever reason, your application presents challenges for your mortgage professional, (e.g., credit, short of income) it is a good idea to have a co-signer in place ahead of time. Be aware that currently one of the biggest roadblocks in qualifying for mortgage financing is the mortgage stress test. This is a government mandated means test that applies to everyone that is borrowing on a mortgage through traditional means (i.e. banks, credit unions). While record low interest rates determine what you will pay (under 2% currently), you must be qualified at a much higher rate (currently 4.79%, but subject to change without notice).