Buying a home and taking out a mortgage is the biggest financial commitment that anyone will ever make.  “This is no different for those trying to purchase homes in the Halton regions of Oakville, Burlington and Milton” says Jacques du Preez, principle Mortgage Broker at Mortgage Allies.

Any Mortgage Broker will tell you that early planning is vital for a commitment this great, to secure the best possible mortgage.  The planning process should start at least one year before you purchase a home.  Getting a head start will allow you to make changes and correct problems before the time comes.

Learn from the Mortgage Broker – Insights into getting the very best mortgage:

1. Meet with a mortgage broker

A great broker who believes in planning and education will help you review various solutions. They will help you understand the costs, credit, down payment and income requirements. A needs analysis will be carried out. Risks associated with buying real estate will also be identified.

2. Do a budget

Determine the maximum monthly mortgage payment you are prepared to spend on your home. Provide this number to your mortgage broker. Let them calculate the corresponding home price that you should purchase. Working out a budget will ensure that you can afford your home and you won’t be house poor. Make sure your budget still allows you to save money for retirement after you bought your home. Your retirement funds will sustain you once you have paid off your home.

3. Fix any credit issues identified by your mortgage broker

Check your own credit every three months to make sure your credit score stays above 720. Check your own credit score by contacting any of the credit bureau agencies such as Equifax or Transunion. There is a cost involved, but it is well worth getting a credit report with a score on it. Go through these items with your mortgage broker and prepare your credit for an application.

4. Pay off as much debt as possible

As a rule, pay off balances from interest-only payment facilities such as credit cards, lines of credit etc. first. Ideally, you should have no debt by the time you get your mortgage. If this is not possible, your monthly debt payments should not be more than 5% of your gross monthly income. When it comes to mortgages, it is better to have less down payment + no debt than to have a higher down payment + some debt.

5. Keep on saving for the down payment & closing costs

Save the minimum funds that were discussed with your mortgage broker. Make sure that you also plan to have reserve fund after closing to protect yourself for a rainy day. Credit cards and lines of credit should not be used for emergency facilities.

6. Get Pre-qualified

When you are ready to purchase, meet with your mortgage broker again. Get an update on the maximum home price you should look for based on your budget. Also, discuss the latest mortgage rules and market conditions. At this stage, your mortgage broker will request supporting documents. Employment letters, pay stubs and proof of down payment funds etc. will be necessary for pre-qualification.

7. Meet with your realtor and start looking for a home

Owning a home is a privilege and looking for a home should be fun and exciting. Buying a home is a once in a lifetime honor for some, a few more times if you’re lucky. Your home will define your family’s future, so make the most of it.

We at Mortgage Allies are here for you and believe that the best mortgage is no mortgage at all. Reach out to us, we can help.

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