With interest rates at record lows, Canadian mortgage borrowers have been taking advantage of changes to the housing market as a result of the ongoing pandemic, and home sales were also at a record high last year.
However, while it might be a great time to go out and secure a mortgage, watch out for these 5 errors that can creep in and make the whole process more difficult:
- Incorrect documentation
With proof of income and assets documents, credit scores and credit history among others to provide to lenders as part of your mortgage application, it can be easy to make mistakes that could jeopardize your loan.
Working with a mortgage broker is the best way to rule out any mistakes with documents or a lack of correct information when it comes to applying for your mortgage. Even a small mistake such as forgetting to fill in your name or any other essential details, giving outdated information or leaving pages blank can put your loan at risk and delay the whole process by days, if not weeks.
- Focusing all your attention on low interest rates
Getting a low rate on your mortgage is of course important, but there are many other factors that you should be taking into consideration when applying for a mortgage loan. Low rates could save you some money, but large fines for breaking the contract or inflexible terms, could see you losing out.
- Not reading the fine print
A mortgage is a big financial commitment, and as such, it’s vital that you understand all the minor details involved with your loan. Understand exactly what you signed up for, and take into account the fact that in the future, you may be forced to break the contract, and you should know what will happen if you do.
- Failing to appreciate the enormity of the commitment
Some borrowers get themselves into terrible debt when they take on a mortgage, and even if they can afford to make regular repayments initially, life can change, and you may find yourself struggling to stay afloat financially and keep up with your payments.
One way of ensuring that you get a mortgage deal that suits your financial circumstances and is wholly affordable, is to work with a reputable mortgage broker. Measuring debt-to-income ratios across the lifespan of the loan, they will help protect you from taking on a mortgage you may not be able to afford long-term.
- Rushing into a mortgage loan
You’ve found the property you want, and are so keen to move in that you rush into getting a mortgage without properly thinking through the consequences of the significant financial commitment you’ve just made.
Working with a mortgage agent helps prevent any of the above mistakes from happening, and is the best way to ensure you get the best deal for your investment.