It’s the end of the month and your rent has gone through like it has for many years. You’ve never had an issue paying your rent on time and perhaps you’ve thought about owning a home, but don’t know if you could afford it or don’t know where to start. Purchasing real estate can be a great long term investment putting you on a path to financial success and is attainable if the right steps are put in place.
When considering becoming a homeowner preparation is key and more so when it comes to getting approved for a mortgage. It is a process with several key factors to consider.
Here are 4 things you should be doing:
- First, monitor your credit score. Banks and lenders use your credit score to determine the level of risk lending money to you will be. Having a higher credit score and clean credit history, ideally above 680, demonstrates you to be a good candidate.
- Second, evaluate your income and employment situation. Your income level and debts will determine how much will be approved for. You also want to consider affordability. After paying your mortgage, monthly bills and other necessities is there any savings?
- Third, saving a downpayment. At minimum you will need 5% of your purchase price to use as a down payment on an owner occupied property. Steadily saving for this in your bank account and having it ready a few months before making an offer will put you in a good position.
- Fourth, seek expert advice. Speaking to a mortgage professional will put you on the right path to getting approved the first time. They will evaluate your individual situation and develop a plan with you towards becoming a home owner. Brokers work with several lenders including banks, credit unions, monoline and private lenders to make sure you are getting a good mortgage product at the best available rate.
The process does not need to be overwhelming and will be stress free if you work with a professional in the field who can answer all your questions and provide you with the information you need to make smart financial decisions.
Ericka Kodituwakku is a mortgage agent in Ottawa specializing in first time home buyers. Contact her today for a FREE Homebuyers Guide and with any questions on the mortgage process.
Ericka Kodituwakku, Mortgage Agent
Mortgage Alliance Licence # 10530