5 Mortgage Tips for First time home buyers
A first time home buyer might be confused or nervous about getting a mortgage. They might not know exactly what it takes to obtain mortgages and they might not know what lender is the best for home buyers. The good thing is that there are some things that you can do in order to be more ready for the entire process! These things are discussed below.
Check Your Credit Score
The first thing you want to do before applying for a mortgageis check your credit score. Since many lenders require you to have a minimum score, knowing yours will result in going into the situation more prepared. You dont want to have a credit score of 600 for a lender that requires 700 and higher. Not only is this embarrassing, but they might not appreciate the waste of time!
Look at Assets and Liabilities
The next thing you want to do is look at everything you owe and how you spend your extra money. For starters, you dont want to add another bill if youre already drowning in debt. If your debts arent an issue, then you want to make sure you can cut back on certain spending so you can ensure youll be able to make your mortgage payments. Going into the situation already knowing what your financial status looks like will save you grief in the long run.
Compile Important Papers
In order for you to apply for a mortgage, every lender is going to want copies of important documents. While these differ from place to place, some of the documents youll definitely need are pay stubs, tax statements, W-2s, and bank statements. Keep in mind, they want every single page included with each of these things, so you want to ensure that you have everything. They might also want information from past employers and current bills you pay, so make sure you keep everything!
Calculate How Much You Can Afford
Calculating how much you can afford before applying for a mortgage will help ensure that you can easily make your payments every month. You dont want to go in not knowing how much you can afford then get stuck with a huge payment. Not only can this ruin your credit, but you can also end up losing your house. Knowing your number will help you look at houses in that range and get a mortgage that wont break the bank.
Figure Out Down Payment
The final thing you want to do is look at everything and figure out how much you can put as a down payment. Keep in mind, most lenders will require a certain amount but if you can do more, then your payment will be lower. This might also make it so that you get a better rate. With that being said, if you cant afford the minimum payment, ask about tacking on a little more to the first payments you do to make up for it.
For more help or a complimentary assessment, contact me today at 416-568-5111
CREA Updates Resale Housing Market Forecast
The Canadian Real Estate Association (CREA) has updated its forecast for home sales activity via the Multiple Listing Service (MLS) Systems of Canadian real estate Boards and Associations in 2018 and 2019. Housing market fundamentals remain strong in many parts of the country. Nonetheless, many housing markets continue to struggle in the face of policy headwinds.
The new mortgage stress test announced last October had been expected to cause homebuyers to rush purchases in advance of the new rules coming into effect in January and for the pull-forward of sales activity to result in fewer transactions in the first half of 2018.
Evidence suggests the policy response was stronger than expected, with seasonally adjusted national home sales last December having surged to the highest level ever recorded before dropping sharply in early 2018.
Actual (not seasonally adjusted) national sales figures for March, April and May are typically among the most active months in any given year. Combined sales fell to a nine-year low for the three-month period. The seasonally adjusted trend suggests sales momentum has not yet begun to rally.
Interest rates are widely expected to rise further this year and next. Home sales activity is nonetheless still expected to strengthen modestly in the second half of 2018 as housing market uncertainty diminishes.
Taking these factors into account, the national sales forecast has been revised downward and is now projected to decline by 11% to 459,900 units this year. The decrease almost entirely reflects weaker sales in B.C. and Ontario amid heightened housing market uncertainty, provincial policy measures, high home prices, ongoing supply shortages and this years new mortgage stress test.
Bank of Canada maintains overnight rate target at 1¼ per cent
The Bank of Canada today maintained its target for the overnight rate at 1 per cent. The Bank Rate is correspondingly 1 per cent and the deposit rate is 1 per cent.
Global economic activity remains broadly on track with the Banks April Monetary Policy Report (MPR) forecast. Recent data point to some upside to the outlook for the US economy. At the same time, ongoing uncertainty about trade policies is dampening global business investment and stresses are developing in some emerging market economies. Global oil prices have been higher than assumed in April, in part reflecting geopolitical developments.
Inflation in Canada has been close to the 2 per cent target and will likely be a bit higher in the near term than forecast in April, largely because of recent increases in gasoline prices. Core measures of inflation remain near 2 per cent, consistent with an economy operating close to potential. As usual, the Bank will look through the transitory impact of fluctuations in gasoline prices.
In Canada, economic data since the April MPR have, on balance, supported the Banks outlook for growth around 2 per cent in the first half of 2018. Activity in the first quarter appears to have been a little stronger than projected. Exports of goods were more robust than forecast, and data on imports of machinery and equipment suggest continued recovery in investment. Housing resale activity has remained soft into the second quarter, as the housing market continues to adjust to new mortgage guidelines and higher borrowing rates. Going forward, solid labour income growth supports the expectation that housing activity will pick up and consumption will continue to contribute importantly to growth in 2018.