Applying for a Mortgage Isn’t Always Easy

Mortgages, by their very nature, are complicated. Many homeowners and prospective homeowners might not have the strongest foundation of knowledge on which to base decisions, and even those who do might have wrong information. When it comes to applying for a mortgage, there’s a ton of differing opinion.

Bad Advice Might Steer you in the Wrong Direction 

A quick Google search for anything to do with mortgages will quickly reveal contradicting opinions. How does someone looking for a mortgage approval sift through the bad advice and come to a solid conclusion? Remember, you don’t need a license or accreditation to share an opinion on the web.

Let’s look at some common mortgage advice that you might want to ignore:

#1: Getting a Mortgage Pre-approval Offers No Advantages

This tends to be a popular one and is simply not true. Some claim that you’re too early in the process or that it’s not official so why bother. The truth is, a pre-approval can make you more attractive to a seller if there are multiple bids. In addition, it gives you a framework on what you can spend.

#2: The Fine Print is Just Legal Mumbo Jumbo

Once you’re approved for a mortgage, there’s a lot of legalese that you’ll have to sort through. While it might feel daunting, there’s important information in there, and it shouldn’t be dismissed. Don’t think of it as fine print, instead, think of it important clauses that could make or break your deal.

#3: Avoid Being “House Poor” by Paying the Least Amount Every Month

Another common one is to avoid bi-weekly payments or accelerated payments or try to amortize over 30 years instead of 25 years. All of this can drag your mortgage out whereas fewer years and accelerated payments can chop months if not years off of your regular payments.

#4: Take Every Penny Offered by the Bank

This might be a tough one to ignore since it sounds so enticing, but it’s not sound advice. You need to stay within your budget and shop accordingly. You can enjoy life and find your dream home for a bit below your means, and this way, you can continue to save or top up your emergency fund.

This list could be a lot longer, but the point is, you need to consider all of the advice given to you and to choose what is best for you and your finances. The best piece of advice might be to do your research, be diligent and trust the experts.

Speaking of experts, if you want sound mortgage advice, contact Canadalend today.

What’s better than escaping the harsh Canadian winters to your own private villa in Mexico or a beach house in Miami? Or maybe it’s owning a cottage that your family can enjoy on weekends?

Wherever your dream vacation home is located, owning one takes money and a financial plan to achieve. The good news is that you might have options that don’t include winning the lottery or discovering you had a rich uncle.

Can you Fund your Vacation Home with a Loan?

Loans aren’t meant to be used frivolously and while a vacation home can feel like a luxury, it can also be an investment. Properties as assets are historically very secure, so using different loan types to invest in a vacation home could work in your favour.

If you plan on treating a vacation like a second home that will aid in your retirement than borrowing might be an option if you can afford the second mortgage.

Invest in the Proper Research

Scour the web and speak to realtors and travel agents to find an under-the-radar spot to buy a vacation home. You’ll pay less and potentially find an intriguing opportunity to turn a profit.

This might mean Arizona instead of Mexico or a cottage outside of Muskoka, but a bit of sacrifice could result in a vacation home and a sound investment.

Finding the Right Partner

Another option is to co-own a vacation home with another person or family. It could be in a timeshare situation, where you would own under specific circumstances with strangers. Alternatively, you could find the right person in your network to invest in the venture. 

Should I Apply for a Second Mortgage?

A second mortgage is a mortgage taken out on a property that is already mortgaged. Using this type of loan to finance a vacation home isn’t uncommon. You could then use a home equity line of credit for any repairs or renovations.

Finding a property for a reasonable price in a desirable area can turn a loan into both a vacation home and an investment.

Even if your savings account isn’t flush, a vacation home can be a reality. Speak with a mortgage expert to review your finances to see if you can make it work.

Owning a home is quite certainly on most people’s minds. But given the current situation of the growing real estate prices in the GTA, this may seem like a pipe dream to many. Purchasing a house for the first time, finding a bigger property, or even simply moving to a more desirable location could be out of reach financially.

Budgeting a large amount for something as significant as a home can be daunting, but here are some tips to help you save up.

Determine how much money you need

Take into account what you can afford to spend on mortgage payments, including potential maintenance fees and various other expenses. If you currently own a property that you will sell before moving, there will be equity from which to take. However, you also need to figure out where to live and the size of the home you need. Where you choose to lay your hat will be a major factor in the cost of your new house and what you need to budget.

Set aside some monthly funds

Tuck away a portion of every pay cheque you receive into a savings account from which you purposefully do not withdraw. Your income (as well as your spouse’s or significant other’s income if the home will be a co-purchase) also plays a significant role in the size of the mortgage you will be able to obtain.

Adjust your lifestyle

Cut back on unnecessary purchases and make some frugal adjustments to your lifestyle, if needed, such as packing lunches and dining at home, and skipping outside entertainment activities for now. This will help you sustain more of the money you earn each month to put towards a new home.

Mortgages are obviously in place because only the illusive one percent can possibly afford buying a home outright. That means the rest of people need to save up for at least the down payment, with enough left over and a steady stream of income to manage monthly payments and other regular bills, such as hydro and utilities. Simply set realistic goals and give yourself some time to make it happen.

A real estate lawyer works to protect his or her clients when they purchase or sell a home, helping to ensure that the transaction is completed well—regardless of which side of the deal they are on. There are many facets of a purchase or sale that real estate lawyers deal with on your behalf so you can rest assured it will go smoothly.

Agreement of Purchase / Agreement of Sale

A real estate lawyer reviews a wide range of legal documents on their clients’ behalves, including the Agreement of Purchase or Agreement of Sale. These items detail the negotiations involved and range from an irrevocability deadline and completion date to matters of Harmonized Sales Tax and a title search.

Title insurance

He or she might also arrange for the client to obtain title insurance. Although this is not required, a real estate lawyer may recommend it to better protect you, the property owner. Coverage includes title issues that affect you from having clear ownership of the home, title fraud, liens that a previous owner may have had, public record or survey errors, a structure that requires removal by interfering with a neighbouring home, and related issues that impact your ability to sell or lease down the road.

Other issues that may arise

Real estate lawyers are also responsible for ensuring that no claims are listed against the home you purchase, as well as checking that property taxes are up-to-date and that you (their client) have a valid title upon closing. Some of their other roles include calculating the land transfer tax due, drawing up the applicable mortgage documents, exchanging legal documents and keys with the seller’s real estate lawyer, plus closing the transaction while ensuring all financial and legal conditions are met.

As a seller, your real estate lawyer also handles potential title issues that occur, prepares the deed to your home, and helps you negotiate the terms and conditions with your buyer. But no matter whether you buy or sell a home, having a professional in your corner is crucial to avoid as many complications as possible.