So, you’ve worked extra hard, and you’re finally gearing up to become a homeowner. After tidying up your finances, amassing enough cash for a down payment, and attending several open houses in your target neighbourhood, it is high time you arrange for a home loan. The truth of the matter is that navigating the mortgage lending process can be quite frustrating, if not downright daunting, especially if you’re a first-time homebuyer. It’ll be even harder if you don’t work with an experienced Guelph mortgage broker.
Lucky for you, you are in a good position when it comes to negotiating for better terms and rates thanks to fierce competition amongst mortgage lenders. However, it is crucial for you to go to the battlefield armed with the right knowledge.
In this brief article, we have outlined five simple yet effective expert tips from a reputable Guelph mortgage broker on how to get the best rate as a first-time homebuyer in the market.
#1. Clean Up Your Credit Score
Your FICO credit score is the first place mortgage lenders look when ascertaining your creditworthiness. If your credit score is good (usually 620+), you are more likely to be offered better mortgage rates. If your credit score is below 580, the lender might consider you a higher credit risk and irresponsible in managing your finances.
Even so, you can still spruce up your credit score. For starters, ensure that you pay all of your credit card debt and other bills on time. More importantly, you should avoid going above 30 percent of your line of credit limit. If anything, don’t open new credit accounts before applying for a mortgage.
#2. Furnish the Lender with Proof of Income
The next pit stop lenders make: your income. Do you have a steady stream of income? Guelph mortgage broker recommends that you present your business ownership documents detailing your cash flow for the last two years. The same goes for those who are employed.
#3. Impress with the Amount of Down Payment
As far down payment goes, Canadian lenders are not strict. Ideally, you’ve to put at least 5 percent down on a mortgage. However, if you want to negotiate for a better interest rate, go for 20 percent or more in down payment.
#4. Consider Long Term
Usually, a mortgage with a long term will attract more favourable conditions and lower interest rate. A long-term mortgage, however, might end up being a bigger loan on the overall.
#5. Work with a Reliable Guelph Mortgage Broker
A great Guelph mortgage broker can take the hassle out of finding the best home loan rate. Be sure to make due diligence to select the best Guelph mortgage broker for your needs.