Posted: September 18, 2009 Categories: calgary mortgage broker No Comments
A recession hit us. I know, I know, brace yourself. That’s a bit of surprising news, isn’t it?
Sarcasm aside, there’s no denying that the global economic crisis (AKA, the recession) really put a lot of people in positions they weren’t used to being in. For many people born post 1980, a “recession” was an entirely new, completely foreign concept. For others, it was a case of lather, rinse, and repeat.
However, how you feel about the recession doesn’t change the fact that it has made life a little more difficult for those looking to obtain a loan or mortgage. Before the recession, banks and lenders alike seemed to hand out zero-down mortgages like candy. Now? Well, be prepared to save some cash.
Obtaining a Mortgage Post Recession
People can still get mortgages, and unless you have absolutely no income, no credit, and no cash, there’s a good chance that you can get one too. Many banks have dramatically tightened their purse-strings, which is why Calgarians looking for a mortgage may find that using a Calgary mortgage broker is the way to go, but that doesn’t mean that they’re impossible to obtain.
Your credit is more important than before, but it doesn’t have to be squeaky clean for a lender to provide you a mortgage (especially if you’re using an experienced calgary mortgage broker). As always, make sure that you have your ducks in a row:
- Clean up your credit - Pay off as much of your debt as possible a few months before approaching a lender. This will make you more applicable for credit as your debt:income ratio will have been reduced.
- Build a down-payment – Save money to be used as a down-payment. The more you have, the better your chances of getting a mortgage (and the more you may be able to get approved for).
- Show consistency and stability in your lifestyle - If a lender runs your credit bureau and sees that you’ve been trying to get a ton of credit in a very short period of time it makes you look like a serious risk. Avoid seeking any more credit than you absolutely need.
Are the Days of Zero-Down Long Gone?
For some people, yes, the days of zero-down mortgages are over. However, these people are also the people that likely should not have necessarily obtained a mortgage in the first place (due to financial/economic reasons, stability reasons, or otherwise).
As always, your mortgage broker will let you know about what your best options are and how they’ll work for you.
About the Purcell Mortgage Team:
The Purcell Mortgage Team are an industry-leading pair of mortgage professionals who have been serving Calgary for several years. JoAnne Purcell was ranked within the Top 50 Canadian Mortgage Professionals in the CMP Magazine. If you are in need a reputable calgary mortgage broker please contact us today!
The Purcell Mortgage Team are experts on Calgary mortgages!
Posted: September 14, 2009 Categories: calgary mortgage broker, mortgage advice No Comments
A common myth that is very prevalent is that people who are self-employed, or who work on a commission basis, can not get a mortgage/have difficult time getting a mortgage. While this myth is true in certain situations, it is not a universal rule. In fact, obtaining a mortgage when you’re self employed can be a very streamlined and simple process assuming that you have certain things in order. There are many people in Calgary who are self-employed who enjoy the same access to mortgage products that those who are not self-employed do.
Things Necessary to Obtain a Mortgage When Self-Employed
As previously mentioned, it is possible to obtain a mortgage when you are self-employed or on commission. If you are newly self-employed the process will be different than if you have been self-employed for a number of years.
If you are newly self-employed (under three years) it is important to have the following in order:
- An excellent credit rating - Lenders will look at your “beacon score” first, before assessing other things such as equity, assets, down-payment, etc. A score of 600 or more is considered “good”, while a score of 680 or more is considered “excellent”. Unless you have a significant down-payment your credit will need to be very good. If it isn’t, you can raise your score by maintaining a low balance on your credit cards, paying more than the minimum payments on your loans, and reducing your overall debt to income ratio by eliminating debt. Unfortunately, this process does take time.
- Your last two NOA’s (Notice of Assessment) from Canada Revenue Agency - Your NOA is your proof to the lender that you have filed and paid taxes on the income that you are presenting to them. In many cases you will need to ensure that you have your last two NOA’s (at least), and that the income shown on your NOA matches what you are presenting to the lender, but with stated income mortgages offered by some lenders if your NOA’s do not match its not game over.
- A down payment - Unfortunately, most (if not all) lenders will not lend to someone who is self-employed without at least 5% of the purchase value as a down-payment. If you have excellent credit, a 5% down-payment should be sufficient (assuming you don’t have a large debt overhead). If your credit rating is still good (over 600) but not as high as it could be, a down-payment of 10% or more may be required.
If you have been self-employed for a number of years, and have maintained good credit, you will find that a good Calgary mortgage broker will be able to get you a mortgage without too much fuss. Remember, those who are self-employed are a larger risk for a lender since there is no guarantee of income.
What To Do If Your Local Calgarian Bank Turned You Down
You will find that banks do not like to offer mortgages to those who are self-employed as earnestly as they will to others. However, if you are using a mortgage broker who specializes in Calgary mortgages, your options are not as limited as they may seem. Remember, a bank is only able to offer you its particular set of products and services- this fact in itself can be very limiting. A mortgage broker is able to offer you a wide range of products and services that extend across a platform of multiple lenders.
If you aren’t sure if a mortgage broker will benefit you, read our article on what a good calgary-area mortgage broker can do for you.
About the Purcell Mortgage Team:
The Purcell Mortgage Team are an industry-leading pair of mortgage professionals who have been serving Calgary for several years. JoAnne Purcell was ranked within the Top 50 Canadian Mortgage Professionals in the CMP Magazine. If you are in need a reputable calgary mortgage broker please contact us today!
The Purcell Mortgage Team are experts on Calgary mortgages!
Posted: August 10, 2009 Categories: calgary mortgage broker, mortgage advice No Comments
Do you remember the days when getting a mortgage was easy? Simply show up to your favourite broker or banks office with a pay stub and a decent credit score, and after signing a few papers, you walked out the door with a mortgage! Okay, perhaps it was never that easy, but the global financial crisis has effectively ended the days of banks handing out 108% mortgages.
Lenders, in a bid to act more responsibly, have tightened their lending criteria. However, this doesn’t mean that you need a perfect credit rating or no outstanding debts to qualify for a mortgage. Being savvy, and following the advice of a good mortgage specialist, will net you a mortgage that is perfect for what you need it for (not all mortgages are the same). When it comes to home loans, knowledge is power.
Confused? Talk To Your Mortgage Broker.
If you are unsure about home loans it is always a good idea to talk to your mortgage broker. As with just about anything, there are many ways that you can borrow money- and that money doesn’t always have to come directly from a bank. Your mortgage broker is a specialist and knows the ins and outs when it comes to finding a suitable lender for you. Not only that, but your mortgage broker is a trained professional who knows the Calgarian marketplace.
Your goal as a home buyer is to find the ideal home for you needs. All factors, from price to square footage, play a role in that. Your mortgage broker can do a lot more than simply connect with you with a lender; mortgage brokers can offer sound financial advise in regards to lending products that are tailor made for your specific situation. After all, if you are a first-time buyer with no equity your product needs may be different than someone with a lot of equity built up.
How a Mortgage Broker Operates in Calgary
Calgary is a big city, both by geographical size and by population. Because of this fact there are dozens of mortgage brokers that can assist you in finding a lending solution. All mortgage brokers will follow a structured process:
- Initial consultation - Your mortgage broker will discuss your lending needs and circumstances based on the information that you provide. This consultation will determine your needs and long-term goals, ensuring that your mortgage broker finds the best lending solution for you.
- Rate negotiation - A good mortgage broker, such as the Purcell Mortgage Team, will not simply pick a lender for you. Instead, they will negotiate with lenders until they have a solution that fits your needs. Lenders, when vying for your business, will often give a mortgage broker interest rate cuts and drop various fees and charges- benefits that are not usually available to you without one.
- The Approval Process - Once your broker has found the right loan product for you the broker will complete the necessary paper work and send it off to the lender. You may need to provide some documents/information, but the majority will be handled by your broker. Most lenders will get back with a pre-approval within a few days, with a formal approval taking up to two weeks (depending on the lender).
About the Purcell Mortgage Team:
The Purcell Mortgage Team are an industry-leading pair of mortgage professionals who have been serving Calgary for several years. JoAnne Purcell was ranked within the Top 50 Canadian Mortgage Professionals in the CMP Magazine. If you are in need a reputable calgary mortgage broker please contact us today!
The Purcell Mortgage Team are experts on Calgary mortgages!
JoAnne Purcell, AMP