The stated objective of our service is Helping You Buy Your First Home (or your next ;) and this will require that you qualify for a mortgage, either now or later.
If you think your financial house is in pretty good shape, then having a pre-approval discussion for a mortgage today is likely your best route to purchasing a home. (We are licensed mortgage brokers and would be happy to provide a free consultation.)
If there are some issues to deal with (such as bruised or lack of credit, employment probation, debt ratios too high, etc.) and you need more time to get things lined up, then we may still be able to help get you into a home along with a plan and a program that will ultimately have you qualify for your own mortgage and complete the purchase transaction.
In either case, however, it is imperative not only that you understand what it takes to qualify for a mortgage, but that you actually take the required steps.
The Five C's of Lending
When a lender assesses the merits of your loan application, they will generally organize their review over 5 different areas Your being aware of what they are looking for is essential to obtaining a mortgage. Getting your "financial ducks in a row" is the first part of the process. You will need to satisfactorily address all of these variable components, with the help of your mortgage advisor, in order to be approved for a mortgage.
- Character- An evaluation of your credit history, your training, your employment track record, and your residential history. Essentially, lenders are looking to see if you are stable and able to self-manage.
- Capital- This is your financial position; assets, liabilities, net worth and equity. Lenders want to make sure you have the resources to weather any unexpected emergencies or setbacks.
- Capacity- Your ability to take on and repay the loan based on your employment earning potential and cash flow after the mortgage, taxes, and other debts are paid. This is your debt-to-earnings ratio (also called debt-servicing-ratios).
- Collateral- This is what you offer the lender for security should you default or cannot repay the mortgage. Your home will be your collateral so you will need to keep it in top shape so that it appraises well. Generally, you can borrow up to 95% of the appraised value of the home if you properly qualify per our plan.
- Conditions- What are the current economic conditions and how does your profile fit in? If your employment is sensitive to economic downturns, the bank wants to know that you will be able to manage in that event.
Personal Evaluation
As part of our service, we are able to recommend to you whether a mortgage or rent-to-own is the best next step for you. We do this after a pre-evaluation of your current situation vis-à-vis employment, income, credit, debt load, and down payment. We then advise where you are or need to be on the dimensions above to qualify for a mortgage, and, with your input, create a realistic plan with checkpoints that you can use and follow to achieve your home ownership objectives within a specific time frame. This analysis will also reveal what price-range of a home is suitable.
If you would like to determine if you can get a mortgage now, then get pre-approved. If you are not sure whether you will qualify or need further discussion, simply complete our less formal Client Questionnaire.