There are different mortgages for different situations, which makes sense, but a lot of people don’t really think about it until they try to get a loan and realize they don’t qualify or it’s not as straightforward as they thought it would be.
Having the information you need ahead of time will make it a lot easier all around!
- First-Time Home Buyers
- Self Employed Home Buyers
- Income Properties
- Vacation Homes
First-Time Home Buyers
Purchasing your first home is an exciting rite of passage and the time when most people feel like they are truly adulting for the first time.
It’s also the time when they find out that their credit rating might be a little more important than they realized because it directly affects their mortgage rates and ability to qualify for the home they desire.
If you have a good credit score, the next consideration lenders will look at is whether you qualify for an insured, insurable, or uninsured mortgage, which is based on your down payment and the kind of property you want to purchase.
It can be a little overwhelming, but it is a lot easier when you have someone experienced there to cut through all the industry terms and legalese, guiding you every step of the way.
Self Employed Home Buyers
It is a little more difficult for self employed people to qualify for a mortgage, mostly because they usually focus on getting their income statements down as much as possible to save on taxes, rather than increase it to qualify for mortgage loans.
If you are unable to provide sufficient proof of income all is not lost! There are still ways to secure a mortgage.
No matter where you go to get a mortgage, you will need to have your financial statements for your business to provide proof of income, as well as your up to date GST payments, credit scores, business expenses and so on.
It’s important to note that gifts from family members to make up your down payment are possible , and can bring your goal of being a homeowner closer. However, there are certain rules that dictate how much and where a gifted portion of your down payment can come from. By talking to a Kardia Mortgage Broker, you can be certain that you will start the mortgage process with a plan that will end in an approval.
Financing for an acreage in Alberta has different requirements than a home in the city.
When you are applying for a country home loan, lenders will look at the zoning for the property, the size of the property (there are sometimes different loans for properties over 10 acres), outbuildings on the property, as well as water and sewer sources.
The kind of property and the usage of the land will also impact your mortgage and the amount necessary for the down payment. The more acres you plan the buy, the more down payment you will likely need to pay.
Investment and Rental Properties
They do say that you can’t go wrong investing in real estate and if you’re one of those people who wants to start building your real estate empire, then you are going to need an exemplary credit rating and at least a 20% down payment on your property.
During the qualification process, the lender will look at your gross monthly income and they will also want to see a minimum return of 1.1% on the rental property.
The return must be over and above all the expenses you will incur for the property, including the premiums on the loan (which are higher than owner-occupied properties) along with up-keep on the property, tax obligations, interest payments and so on.
The financing for a vacation home is similar to your home mortgage IF the property can be accessed year-round and you plan to make it your primary residence at some point each year. Otherwise, there will be other financing qualifications you will need to meet for the lender to move forward.
In all cases, you will need to have at least 5% down, a good credit rating, and you will have to show you can afford to meet all the financial obligations of your primary home, as well as the new one you’re purchasing, to get the second mortgage for your vacation home.
No matter what kind of mortgage you’re considering, contact Tim Lacroix to get the perfect option to fit your current lifestyle as well as the future you’re dreaming about.