The Logistics of Buying Your First Home

The logistics of buying a first home can seem onerous at times. This is, after all, the biggest purchase of your life. It’s a transaction which will ripple through your monthly budgets for the next twenty-five years. It will go through many renewals. There may be ups and downs. But finally it will be worth it.

Approaching Your Mortgage Lender

In order to buy a home, most people require the services of a lender. Before making a bid on a house, it is usually advisable to get a pre-approval on a mortgage. In other words, the lender (usually a bank) will assess your financial situation and agree to lend you a sum of money on certain terms. The sum will be paid back over an agreed period. The most common term is twenty-five years.

Employing a Broker

If you have trouble getting a mortgage from your lender, it may be time to call on the services of a mortgage broker or consultant. A mortgage broker acts independently. They assess your situation and negotiate with your lender on your behalf. With a large working knowledge, not only of the banking sector, but of the housing market, they can steer you towards the best deal possible. They’ll also recommend better offers from competing lenders, something your bank is not in a position to do.

How Good Is Your Credit?

When buying a house or seeking a mortgage, your financial situation and credit rating is very important.  A lot may depend on how much debt you’re carrying and your capacity to pay it off. It is recommended that your debt per month should not exceed 40% of your incomings.  Working with a mortgage broker or consultant, you can work out your monthly housing costs and see how they equate to your income. In general it is recommended that your housing costs per month should not exceed 32% of your gross monthly income. By “housing costs” we refer not only to your mortgage payments but all the associated costs of owning a house such as heating expenses and property taxes.

Thinking about the Future

It is important that you do the math in advance because these are variables upon which your lender will decide whether or not to approve (or pre-approve) your mortgage. A mortgage broker or consultant is useful to have in your back pocket because they speak the same language as your lender. They know when to push hard for a deal and when to back down. Buying a house is a momentous step. Seek the best advice you possibly can.  

Debt Consolidation and Consumer Proposals

As a mortgage broker is Vancouver B.C., we deal with a lot of struggling homeowners. Many Canadians are having difficulty making their household payments and other debts. As the Canadian economy normalizes and picks-up, more and more Canadians are trying to regain control of their finances. Many are succeeding in freeing themselves, but household debt levels remain very high. For many people debt issues are a source of stress, inconvenience and even embarrassment.

Consolidation Loans

There are a range of options for managing personal debt and avoiding bankruptcy. The trick is finding the one that applies best to your situation. One of these options is debt consolidation. This usually means merging all of your debts into one low interest loan payment. The advantages of this kind of arrangement are that you save on the interest rate and have the convenience of one payment.

Of course debt consolidation isn’t for everyone and you should give careful consideration before committing to any kind of financial restructuring. Also, getting approval often requires a good credit standing which you may not have. The types of people who seek consolidation are often struggling financially.

Consumer Proposal

Another option is a consumer proposal. This is where a proposal is made on your behalf to your creditors. This is an official process and must be undertaken by a trustee in bankruptcy. If successful, payments will be reduced to a manageable level and your overall debt burden may also be reduced. Consumer proposals also take the form of consolidations and will merge all your debt into one payment. While this will impact negatively on your credit standing, it will make it easier to make your monthly payments. 

The Canadian House Market Shows No Sign of Easing

Consumer confidence in Canada remains at its highest in four years, as 40% of the population expects house prices in their neighborhood to keep rising. Recent gains in real estate have left Canadian homeowners feeling confident. The decision by the bank of Canada to hold off on interest rate increases has also contributed.

Sales in Vancouver and Toronto Lift Market

According to the Bloomberg Nanos Confidence Index, less than 10% of Canadians expect house prices in their neighborhoods to fall in the next six months. Sales of homes rose by 2.7% in April. The engine of growth was in Vancouver and Toronto. The four month fall in house prices experienced over the winter, now seems like a distant memory.

Neither does construction seem to be easing. Building of new homes increased in April, reaching 194,809 units. While there has been a tightening of mortgage regulations by federal and provincial government, lenders have dropped their rates this year, encouraging more people to get on an increasingly expensive mortgage ladder.

What Will Your House Cost You?

If you are still hoping to get on the ladder, a mortgage consultant can provide somedown-to-earth advice. They will assess your situation, ask you the tough questions and help you to build a coherent strategy. How much money can you afford to spend on your new home? The cost of a home is not simply the purchase price. There are other things which need to be factored in. There are ongoing maintenance and ownership costs. Property taxes for instance. The monthly cost of owning a home should not exceed 32% of your monthly earnings.

Down Payments

For most people in Canada, the biggest monthly cost is their mortgage payment. The cost of a mortgage is dependent on many variables, chief among them being your ability to make a significant down payment as a deposit. In the case that you can’t afford to pay more than 20% of the house price, you will probably need to take out mortgage insurance to cover the loan.

 If you find yourself getting into trouble with payments or if you are uncomfortable negotiating with your bank, a mortgage consultant can ease the process. They can negotiate with the bank on your behalf and advise you where to go for the best features and interest rates. Buying a house may be the biggest financial decision of your life. Don’t take any chances. Seek the best advice you can. 

Four Types of Debt Consolidation

The aim of debt consolidation should always be to help you pay off your debts cleanly, efficiently and more manageably. There are basically four debt consolidation strategies. These are balance transfers, personal loans, home equity loans and cash-out refinancing. Before committing to any of these you should consult a mortgage broker or financial adviser. 

Using the balance transfer option you replace multiple debts with a low-interest loan. Your lender gives you a good introductory rate. This temporary low-rate period of perhaps twelve to fourteen months is used to pay off as much debt as possible.

The personal loan option consists of your lender giving you an unsecured loan, usually with a fixed interest rate to stabilize your finances. There is no collateral. The bank trusts you to make the repayments. However, because the loan is unsecured, interest rates are higher. 

Cash-out refinancing is a form of debt consolidation where the lender allows you to take out a new mortgage, larger than your existing mortgage. You receive the difference as a cash sum. The loan is secured by your home so the monthly payments are less. However, if you ever have difficulty making repayments your house becomes endangered. 

Home equity loans are also known as second mortgages. Similar to a cash-out repayments, you trade equity in your house for some quick cash. Debt consolidation occurs, merging your debts into one loan with a variable or fixed rate. Using your house to secure further debt however carries certain risks. 

Are You Seeking Debt Consolidation in Vancouver?

Are you seeking debt consolidation in Vancouver? Have you considered seeking advice from a licensed broker? Before committing to debt consolidation, take the time to fully understand the process. Never see it as a quick-fix! Always take a long term view of your finances.

Do You Need Debt Consolidation?

Debt consolidation loans have very specific merits and functions. They can be a way of managing overwhelming debt by combining all your debts into one loan. This effectively involves taking out new credit and using it to pay off your existing credit. By doing this you hope to reduce your monthly payments. Debt consolidation is not the same as debt management. The latter involves simply renegotiating the terms and features of a loan. It doesn’t involve taking out new credit.

There are pros and cons with any package. If you’re seeking debt consolidation in Vancouver, impartial consultation is available. There’s a lot to consider. You should be aware for instance that while consolidating your debt may lower your monthly payments it will also extend the period over which you pay back your debt. Debt consolidation is not a substitute for responsible budgeting. How well you manage your finances will affect the outcome of loan consolidation.

Do You Need Financial Consultancy?

Lending Experts are a licensed mortgage consultancy. They have extensive experience with mortgage consolidation in Vancouver. Their certified brokers will give you independent and impartial advice.  They will assess your overall financial situation and work with you to create viable targets and realistic strategies. Consolidation loans may be secured or unsecured. Some loans will require you to use your house as security. This may not be something you feel comfortable with. On this and other issues, your mortgage broker and consultant can best advise you as to the safest and most effective course of action. 

What’s the Difference between Refinancing and Debt-Consolidation?

As a mortgage broker and consultant in Vancouver, Lending Experts must often clarify confusions and misconceptions about mortgage practices. For instance, people often ask about the difference between refinancing and debt-consolidation. So what is the difference?

Refinancing and Consolidation

When you apply for refinancing, you’re hoping to alter the terms of your loan. This is often done to secure a better interest rate. Debt-consolidation on the other hand is when you combine several loans into one overall loan.

The advantage of seeking refinancing is that securing a lower interest rate ultimately saves you money and even shortens the time it takes to pay off a mortgage. Consolidation is often a coping strategy. It basically makes it easier to handle your payments.

Is it possible to do both at the same time?

If you’re considering either of these options, your mortgage broker and consultant in Vancouver can properly advise you on the best procedures. Refinancing and debt-consolidation sometimes go together.

You may see better interest rates and decide to refinance. You may borrow a larger amount than you require and use it to cover other debts. In a sense you’re refinancing and consolidating simultaneously. The danger in using a second mortgage to secure other debts is that you’re using your house as security. If you ever have trouble meeting your payments, your home will be at risk.

Mortgage Broker and Consultant in Vancouver

As a mortgage broker and consultant in Vancouver, Lending Experts offers a range of services to ease you though the process of refinancing or debt-consolidation. Our licensed brokers provide you with consultation, planning and negotiation assistance, making it easier to secure better terms from your lender. 

Some Advice to Consider when Buying a House

As a mortgage broker and consultant in Vancouver, Lending Experts comes into contact with many first-time home buyers. We understand that the process of buying a home is subtle and sometimes exasperating.

Securing your mortgage guarantee:

Assuming you have received mortgage backing from your lender, you know what you can afford to spend. If you haven’t, your mortgage broker and consultant in Vancouver can assist you in the process.

Negotiating with the seller: 

Now begins the process of negotiation with (and in some sense, wooing) the seller. This is an important time. If you are in the middle of a purchase or negotiation you must commit to being available. This is not the moment to vanish for a week to the Bahamas. This is the moment to be present and see the transaction through.

Finding leverage: 

A lot may depend on how much of a hurry the buyer is in. Are they willing to sit on the house indefinitely? Or do they need to offload the property quickly? Maybe they’ve already bought another home or are due to start work in a new location. All this will determine where the leverage lies in the negotiation.

Being reasonable:

Be reasonable. Offer them a price you think is fair. Bidding too low can sour your relationship with the seller. They may interpret it as aggressive or insulting. If you’re selling another house to fund this coming purchase, wait until you’ve secured the sale. A property chain can be tricky. Use your common sense. It’s all about timing.  

As a mortgage broker and consultant in Vancouver, Lending Experts is there to assist you with any mortgage or financial advice. Our qualified experts are familiar with the property sector. They can negotiate with your lender on your behalf.