So, You Want Some Credit?

With the state of the current economy, the days of rubber stamped mortgages offered by banks with little proof of income are over. Looking to buy a Regina home and don’t have the money to simply write a cheque? You’ll need a mortgage, and keeping some key things in mind will help you find success in this new era of tightened lending.

Be ready to verify your income. While banks used to be content with a job letter before offering a loan, now they are also requiring a pay stub (or even two), and a T-4 or a notice of assessment. If you work over time, be sure to check with your lender to see if that income can be counted toward your mortgage qualification - it doesn’t always, since it isn’t guaranteed or as common anymore.

Work to maintain or raise your credit score. If you have very poor credit, getting a mortgage will be more difficult than it has been in the past. Those who have less than excellent credit will likely qualify for a mortgage, but will pay a little more in interest rates. If you have poor credit, or little down payment (you’ll need at least 5%), it might be a good opportunity to use the upcoming months to save more and pay down debt. When you re-enter the real estate market, you’ll be in a much better position to secure a mortgage.

Self-employed? Be ready to provide ample documentation to prove your income is within reasonable bounds for the size and type of business you do. If there are disparities between taxable and real income, lenders can refuse to provide a mortgage. Make sure the income you state is within those reasonable bounds if you’re stating your own income.

Educate yourself on the variety of mortgage options. If you do your homework, you’ll have a much better chance to choose the right mortgage for you, and give yourself the best opportunity to have everything the lender needs to make your approval process quick and easy.

If you’re not sure how much you can afford, visit this website to calculate a reasonable mortgage for your situation. And if you’re ready to begin your home search, give me, Clair Whittington, a call! I’d love to help you find the right home for you and your budget. Visit my website to learn more about how to choose the best home for you!