The Top 15 Mortgage Mistakes to Avoid Featured Image

Buying a home is the one of the greatest investments you will ever make. For this reason, it’s important to avoid expensive errors, especially when applying for a mortgage. Here are 15 common (and costly) mortgage mistakes to avoid. 

Mistake 1: Not Improving Your Credit Score 

Lenders consider you more creditworthy when you have a high credit score. With a good credit history, you can qualify for a larger loan, a lower interest rate, and a lower monthly payment, so be sure to do everything you can to improve your credit score before shopping for a home loan:

  • Payment history can account for up to 35 percent of your credit score, according to Equifax. You are more likely to improve your credit score if you pay your bills on time. Make sure…

759 Views, 0 Comments

Read Full Post

As a mortgage borrower in Canada, you’ll inevitably be faced with the decision to either renew or refinance when your mortgage term expires. For this reason, it’s important to understand the difference between the two so you can choose which will best suit your needs and goals.

Here’s what you need to know:

Mortgage Renewal

A mortgage renewal occurs when your current term expires, yet you still have money owing on your loan. In this scenario, you’ll opt to stay with your existing lender for another term (typically under the same conditions as the one previous), at an interest rate reflective of the current market.

Keep in mind, when your mortgage is up for renewal, you don’t have to stick with your current lender. You may opt to shop…

25 Views, 0 Comments

Read Full Post

From modern features and finishes to contemporary floor plans and flourishing neighbourhoods, there are plenty of perks that come with purchasing a newer home – including new home warranty. As of 2014, all new homes in Alberta became subject to mandatory coverage for up to ten years!

If you’re thinking of buying a new(er) home here in Edmonton (or anywhere else in the province, for that matter), here’s what you need to know about new home warranty in Alberta.

What is New Home Warranty? 

As we mentioned above, all homes built after February 1st, 2014, require new home warranty coverage under the province’s New Home Buyer Protection Act. This means all builders must provide coverage on all new construction properties (including condos and…

34 Views, 0 Comments

Read Full Post

A simple, seven-step guide to the mortgage loan process.

Step 1= Save Your Down Payment

Your down payment plays a major role in determining how much home you can afford and what type of mortgage you’ll qualify for. For this reason, saving your down payment is the essential first step to securing a great mortgage loan. Keep in mind, Canada’s mortgage rules require a minimum of 5% down and anything under 20% will be subject to mortgage loan insurance. 

Step 2= Get Pre-Qualified

After saving your down payment, the next step is to seek a mortgage pre-qualification. During this process, a lender will take a high-level view of your current financial situation (including your income, debt(s) and down payment) and give you a ballpark number as to…

47 Views, 0 Comments

Read Full Post

Effective July 1st, 2020, the Canada Mortgage and Housing Corporation (CMHC) is expected to tighten requirements surrounding insured mortgages. How will the changes affect home buyers and the Edmonton real estate market? Here’s what to expect:

What Are the Changes and Why? 

According to officials, COVID 19 has made Canada’s financial markets more vulnerable and, as a result, measures must be taken to protect the economy. Specific measures include:

1. Increasing the minimum credit score to qualify for a mortgage from 600 to 680 (for at least one borrower).

2. Limiting the Gross Debt Service Ratio (GDS) from the standard 39% annual income to 35%.

*Your GDS Ratio is the percentage of income required to pay all monthly housing-related costs…

33 Views, 0 Comments

Read Full Post

What’s the difference between a mortgage pre-qualification and pre-approval? We’re glad you asked. While both are important steps in the home buying process, there are some key distinctions between the two.

Here’s what you need to know:

What is a Mortgage Pre-Qualification? 

Simply put, a mortgage pre-qualification is a free estimate of how much home you might be able to afford. After making a high-level assessment of your finances (income, debt, assets, etc.), a lender will provide you with a ballpark figure for how much you can expect to borrow. Pre-qualifications are typically done the same day online, in person or over the phone.

Advantages of Getting Pre-Qualified 

  • Knowing how much home you can afford before you begin the home…

54 Views, 0 Comments

Read Full Post

The COVID-19 pandemic has affected the employment and income of many hardworking Albertans. As a means of helping homeowners pay their bills during these times of economic uncertainty, several of Canada’s largest banks are offering payment relief by means of deferred mortgage payments.

Here’s what you need to know:

What is the Mortgage Payment Deferral? 

An agreement between you and your lender, a mortgage payment deferral allows you to pause or suspend your payments for an allotted period of time. Sometimes referred to as a mortgage forbearance agreement, the deferral is a temporary measure that, upon ending, will see your payment schedule return to normal and the missed payments repaid.

Note: A mortgage payment deferral includes payments…

45 Views, 0 Comments

Read Full Post

Bulk-up your down payment savings with the help of these simple, practical strategies:

Finding Money in the Margins 

Save your down payment faster by doing away with lavish expenses and saving any additional funds that come your way: 

  • Amass windfalls – Instead of looking at work bonuses, raises, or other unexpected monies as a reason to spend, consider them a reason to save (if feasible, you may even want to consider asking for a raise).
  • Consider a staycation – Trading in your tropical getaway for a week at home may not sound glamourous, but it will be worth the sacrifice when you’re holding the keys to your new home.
  • Sell some stuff – If you have any stocks, now is a good time to cash in. Otherwise, you may be able to capitalize on…

36 Views, 0 Comments

Read Full Post

Become mortgage-free a whole lot faster with the help of these five easy tips:

1. Opt For Accelerated Payments

Depending on the terms and conditions outlined in your mortgage contract, you may be able to make accelerated payments. This option allows you to make weekly or biweekly payments, amounting to roughly the same total you’d expect monthly. However, by paying more than once a month, you’ll be able to save on interest charges and make approximately one extra mortgage payment per year.

2. Increase Your Payments 

Of course, increasing how much you pay, even if it’s only by a small amount, is a surefire way to become mortgage-free faster. Here again, you’ll have to refer to your mortgage contract as you may only be able to boost your…

55 Views, 0 Comments

Read Full Post

Gross Debt Service and Total Debt Service ratios are the two primary calculations lenders use during the loan application process. Together, these ratios play an integral role in determining your ability to qualify for a mortgage and how much home you can afford.

Here’s what you need to know:

GDS Ratios

Your GDS ratio refers to the percentage of your annual income needed to cover monthly housing costs – specifically your mortgage payment (principal and interest) as well as taxes, condo fees (50%, if applicable) and heating. As per the Canada Mortgage and Housing Corporation (CMHC), this percentage should be no higher than 35% when applying for a mortgage loan. 

How to Calculate Your GDS Ratio:

Your GDS ratio is the sum of your monthly…

69 Views, 0 Comments

Read Full Post