Key

Our Guide to Mortgage Pre-Approval: What You Need to Know

If you’re a first-time home buyer in Ottawa, then you’ll have to start exploring your financing options to help you purchase your dream home. The prospect of getting your first mortgage can be intimidating, especially if you aren’t sure of what you need. But working with a mortgage agent in Ottawa who truly knows what they’re talking about can help you separate fact from fiction.

Part of getting a mortgage is getting pre-approved for it. When you get a mortgage pre-approval, you can secure an interest rate for up to 120 days while acquiring a credible estimate of your mortgage limit. With this in hand, you can demonstrate your seriousness as a buyer to agents and home sellers as you’ve taken the time to get your qualifications. Additionally, although pre-approval can take some time, it can also save you the inconvenience of applying for a mortgage when you’re occupied from closing on your new home. 

What Is a Mortgage Pre-approval?

A mortgage pre-approval is securing an amount of money that you can borrow from a lender should you choose to buy a home. It also gives you a locked-in interest rate. However, the pre-approval and locked-in rates are valid only for a specific period, usually 60 to 120 days. You will also have to supply the lender with documents such as your proof of income, employment, bank statements, and a credit check, similar to the process of applying for a mortgage. 

When everything checks out, the lender will give you a mortgage pre-approval letter, which can boost your chances of the seller accepting your offer on a home as it demonstrates your secured financing. However, keep in mind that a pre-approval is not a guarantee that the lender will give you a mortgage, nor does it oblige you to get your mortgage from that specific lender.

How Is It Different From a Pre-Qualification?

A mortgage pre-qualification is a straightforward way to estimate how much mortgage you can afford based on your income. However, a pre-approval carries more value since it comes with a written contract and involves a more comprehensive study of your financial situation. You can get pre-qualified online or over the phone by offering a few details about your financial situation, which is great for when you’re in the early stages of buying a home. However, if you have a complex financial standing or need a more precise estimate, a pre-approval offers more assurance. It also shows the seller that you’re sincere about your interest in their home, giving you a higher chance of closing on it.

How Do You Get a Mortgage Pre-approval?

You can get pre-approved from a mortgage broker or most lenders. You’ll have to supply the lender with detailed information about your financial situation and establish your income. Some documents you may have to submit include verification of employment, bank statements, credit report, and your previous tax assessment. 

Your credit score plays a vital role in deciding on the amount of mortgage for which you qualify. If you have a low credit score, lenders will be more likely to decline your mortgage. The required credit score ranges between 300 to 900, but most major banks in Canada hold it at a steady 600 to 700. Your score is determined by various factors that account for your potential to be a safe, responsible borrower or one who has difficulty repaying loans.

For instance, if you have a long history of paying your debts and bills on time, your credit score would increase. However, if you miss a payment or bill, your credit score could sharply drop. A hard credit check can also temporarily affect your credit score, which happens when you apply for a loan or line of credit. This happens because lenders are typically cautious of borrowers who borrow money from various lenders out of nowhere. You can get a free annual credit report from each prominent credit reporter in Canada, Equifax and TransUnion, to keep a close eye on your score.

Conclusion

A mortgage pre-approval can help you move closer to securing your dream home while preparing you for the mortgage process. It tells you how much you can borrow from lenders, allowing you to analyze your credit situation and find a lender that offers the most favourable rates and terms.

If you’re looking for a mortgage agent in Ottawa, be sure to let us know at Ottawa Mortgage Services! We have the best refinance rates and mortgage services around, helping first-time home buyers, self-employed individuals, and commercial clients get a mortgage. We also assist in refinancing, pre-approvals, and debt consolidation. Contact us today to find out more about how we can help you!

home properties

The First-Time Homebuyer’s Ultimate Guide to Buying a Home

Buying a new home is a big financial commitment, but it’s an even bigger deal if you’re buying your first home. Settling down is definitely a milestone that’s worth celebrating, and there are a bunch of things you need to know before you close the deal and pop the champagne. 

Many first-time homebuyers make the mistake of not doing adequate research before they sign the dotted line. And when this happens, they get surprised about all the extra expenses, maintenance, mortgage options, monthly payments, and other fees that can easily double the price of your budget. 

Fortunately, all you need to do is to speak to a local mortgage agent to find the best mortgage option based on your financial stability and have enough funds to cover your needs. Choosing the best mortgage can help you in the long run, allowing you to pay monthly fees and paying off loans without any hassle. 

If you’re ready to close the deal on your dream abode, it pays to know a few tips and tricks when buying a home so you can put yourself in a good position as a first-time homebuyer. Let’s take a look!

1. Closing a Deal Isn’t Cheap

When you purchase a home, there are more financial obligations you need to be aware of besides the listing price or the seller’s offer. With that being said, real estate agents and local mortgage agents suggest that you budget at least three to four per cent of the purchase price since you need to pay off your closing costs. 

Seeing as closing costs can also be a huge sum of money, you should include this in your budget so you won’t be startled when you need to pay upfront. 

2. Know Your Contract’s Subjects

When you read through your contract, you’ll see a long list of subjects. These are important points that tell you what you can and cannot do at the moment. On a contract of purchase or sale, you’ll often find the following:

  • Subject to obtaining satisfactory financing
  • Subject to receiving and approving an inspection report
  • Subject to receiving and approving a property disclosure statement
  • Subject to receiving and approving title search
  • Subject to receiving and approving all strata data

Although these are the most commonly used “subjects,” you can be subject to anything you like. However, don’t expect sellers to adhere to your requests, especially if what you want is unreasonable. 

3. Look For the Right Mortgage Options

As mentioned earlier, buying a home is a massive financial commitment. Most often than not, first-time home buyers need to get a mortgage to pay off a home. With so much money on the line, it’s best to speak to the best local mortgage agent to ensure that you choose a mortgage option that fits your lifestyle and financial capabilities. 

When looking for a mortgage option, shop around and compare interest rates and terms. These are two crucial factors you need to consider since you’ll be paying your mortgage monthly and in the long term. 

4. Explore Your Neighborhood

You probably fell in love with the town while you were browsing for homes online. But remember — these pictures were posted to lure potential homebuyers, so in some cases, they may not be the same in real life. Because of this, taking a weekend trip to the town may be a good idea to explore the area before you commit to the location. 

With that being said, partnering up with a reliable real estate agent is key to ensuring that you’re selecting a home in an ideal location best fit for your budget and lifestyle.

The Bottom Line: First-Time Home Buyers Need to Consider a Wave of Things Before Signing the Dotted Line

Besides the home maintenance expenses and home improvements, there are some of the things you need to consider before you start buying a home. It pays to be financially and emotionally prepared when you take on this endeavour. 

Partnering up with a credible local mortgage agent is key to a smooth, hassle-free first-time homebuying experience.

How Can We Help You?

Buying a home is no easy feat; in fact, there are many legalities and financial responsibilities you need to be aware of. Fortunately, Ottawa Mortgage Services is here to help you. We offer tailored solutions for first-time home buyers from beginning to end of the mortgage process. If you’re looking for a reputable mortgage agent in Ottawa, get in touch today!

man holding documents

6 Signs Now Is the Best Time to Refinance a Mortgage

Refinancing a mortgage means paying off your current mortgage and replacing it with a new home loan. Doing it can seem tempting, especially when refinance home loan rates are low. But before going through the process, keep in mind that it is a major financial transaction. It can save or cost you money, depending on your goals and circumstances. 

To learn more about how a mortgage refinance can help you and determine if now is the best time to take out a new mortgage, you should completely understand how it works. Here are several signs for why it makes the most financial sense:

1. You Want to Shorten Your Loan Term

Many first-time borrowers start out with a 25-year home loan. If you want to become debt-free much faster and save a significant amount of money in interest, consider refinancing to a 15-year fixed-rate mortgage. Besides being able to shorten your term without a big increase in your monthly payments, doing this lets you build your equity faster. This is especially helpful if you are planning to sell your home.

2. You Prefer a Better Mortgage Rate

Refinancing lets you lower the interest rate on your current mortgage. This allows you to save money, boost the equity in your home, and reduce your monthly payment. To figure out if refinancing is a good idea, a rule of thumb is to ensure you can reduce your interest rate by a significant percentage rate to make it worthwhile.

3. You Prioritize Having Lower Monthly Payments

You could save money through refinancing. When you lower the interest rate, you can also lower your monthly payments. This is particularly true if your new loan has the same payoff date as your previous mortgage. Additionally, you can lower your monthly payments by extending the payoff date so you can pay less in principal.

4. You Want to Have More Predictable Costs

If you took out an adjustable-rate mortgage (ARM), you may notice that it starts at a low, fixed-rate for a specific term. But that rate may increase for the remaining loan term after this pre-specified term ends. Thankfully, you can secure a low initial rate by converting your existing mortgage into a fixed-rate loan. Doing this strategy is ideal for you if rates recently dropped, and you now prefer a predictable payment. 

5. You Need to Borrow Money

You never know when a financial crisis can happen. If you need quick cash, you can take some out from your home equity with a cash-out refinance. It lets you obtain funds for any purpose as long as you have over 20 percent equity. So whether you need money for education     or immediate roof repair, you can get the money you need to cover these expenses.

6. You Have to Remove a Person from a Mortgage

Some major life changes like a divorce can cause someone who originally signed onto a mortgage to be no longer held financially responsible. To remove that person from that loan and free them of liability, refinancing is necessary. 

Conclusion

There are many reasons why refinancing can be beneficial for you. But just like any other big transaction, it comes with risks and disadvantages. For this reason, make sure to consider the list in this guide and do the math. If you think it’s time to refinance your mortgage, reach out to trusted mortgage agents.

Whether you prioritize lowering your monthly payments, increasing your cash flow, or shortening your loan term, you can get the best mortgage refinance rates from Ottawa Mortgage Services. We take the time to understand your situation and assess the right mortgage solution for you. Contact us for a free consultation!

house

The First-Time Homebuyer’s Ultimate Guide to Buying a Home

Buying a new home is a big financial commitment, but it’s an even bigger deal if you’re buying your first home. Settling down is definitely a milestone that’s worth celebrating, and there are a bunch of things you need to know before you close the deal and pop the champagne. 

Many first-time homebuyers make the mistake of not doing adequate research before they sign the dotted line. And when this happens, they get surprised about all the extra expenses, maintenance, mortgage options, monthly payments, and other fees that can easily double the price of your budget. 

Fortunately, all you need to do is to speak to a local mortgage agent to find the best mortgage option based on your financial stability and have enough funds to cover your needs. Choosing the best mortgage can help you in the long run, allowing you to pay monthly fees and paying off loans without any hassle. 

If you’re ready to close the deal on your dream abode, it pays to know a few tips and tricks when buying a home so you can put yourself in a good position as a first-time homebuyer. Let’s take a look!

1. Closing a Deal Isn’t Cheap

When you purchase a home, there are more financial obligations you need to be aware of besides the listing price or the seller’s offer. With that being said, real estate agents and local mortgage agents suggest that you budget at least three to four per cent of the purchase price since you need to pay off your closing costs. 

Seeing as closing costs can also be a huge sum of money, you should include this in your budget so you won’t be startled when you need to pay upfront. 

2. Know Your Contract’s Subjects

When you read through your contract, you’ll see a long list of subjects. These are important points that tell you what you can and cannot do at the moment. On a contract of purchase or sale, you’ll often find the following:

  • Subject to obtaining satisfactory financing
  • Subject to receiving and approving an inspection report
  • Subject to receiving and approving a property disclosure statement
  • Subject to receiving and approving title search
  • Subject to receiving and approving all strata data

Although these are the most commonly used “subjects,” you can be subject to anything you like. However, don’t expect sellers to adhere to your requests, especially if what you want is unreasonable. 

3. Look For the Right Mortgage Options

As mentioned earlier, buying a home is a massive financial commitment. Most often than not, first-time home buyers need to get a mortgage to pay off a home. With so much money on the line, it’s best to speak to the best local mortgage agent to ensure that you choose a mortgage option that fits your lifestyle and financial capabilities. 

When looking for a mortgage option, shop around and compare interest rates and terms. These are two crucial factors you need to consider since you’ll be paying your mortgage monthly and in the long term. 

4. Explore Your Neighborhood

You probably fell in love with the town while you were browsing for homes online. But remember — these pictures were posted to lure potential homebuyers, so in some cases, they may not be the same in real life. Because of this, taking a weekend trip to the town may be a good idea to explore the area before you commit to the location. 

With that being said, partnering up with a reliable real estate agent is key to ensuring that you’re selecting a home in an ideal location best fit for your budget and lifestyle.

The Bottom Line: First-Time Home Buyers Need to Consider a Wave of Things Before Signing the Dotted Line

Besides the home maintenance expenses and home improvements, there are some of the things you need to consider before you start buying a home. It pays to be financially and emotionally prepared when you take on this endeavour. 

Partnering up with a credible local mortgage agent is key to a smooth, hassle-free first-time homebuying experience.

How Can We Help You?

Buying a home is no easy feat; in fact, there are many legalities and financial responsibilities you need to be aware of. Fortunately, Ottawa Mortgage Services is here to help you. We offer tailored solutions for first-time home buyers from beginning to end of the mortgage process. If you’re looking for a reputable mortgage agent in Ottawa, get in touch today!