The Loan Strategy For “less Than Perfect Credits” (taux Hypothécaire)
By Gregory van Duys
To have a less than perfect can happen very easily, but it can often make things difficult, especially when it comes at a time when you are applying for a mortgage - taux hypothèque.
What does a mortgage lender analyze when he is deciding whether or not to grant a mortgage to a borrower? One of the most critical things is the borrower’s report. This will give the lender an idea of the risk he is taking with this borrower.
If you are one of the ones with less than perfect there is a strategy that you can use in order to achieve your dream of owning a home. You will have to follow it in three to four steps; it can’t happen immediately, but following these steps will mean that eventually you will obtain the best mortgage rates (taux hypothèque) available to you.
Step 1: Obtain a mortgage:
At this point, you will obtain whatever mortgage is available to you with your individual rating. You may only be able to get a three year mortgage, which in most cases would not be a good idea since it is too short, but the idea here is to just get a mortgage.
There are certain lenders (more than 10) who specialize in poor risks and have less strict financing criteria. You see, almost any situation has a solution!
The main issues that have an influence on your interest rate are your rating and your down payment.
Step 2: Repair your credit
Once you have a mortgage, you should spend the first two years getting your back in shape. If you work with an experienced mortgage loan counselor who specializes in these situations, he will have the knowledge to help you with the steps you need to take to achieve this goal.
Step 3: Renew your mortgage at the best rate
Once a good report has been established, some lenders will be prepared to give you a very good rate - taux hypothecaire. You have to know how to properly present your application to the best lender. In certain cases where the report is very bad, it is possible to take an additional step before you will obtain the best rates. (taux hypothèque)
Benefits:
-You will be able to purchase a house NOW and cash in on any increase in property values (see the publication “Will housing prices continue to rise? Forecast for 2006 and 2007”
-You bought some time to repair your credit
-You will be able to obtain much better interest rates in the future - taux hypothécaire - taux hypothecaire
Disadvantages:
• You will have a very high interest rate (taux hypothèque) during the first three years of this plan
• You will have high home loan payments during the first three years of this plan. However, you may be able to keep your payments down by extending the amortization period of the loan, and then you can adjust it to a longer period when you take out your next mortgage.
• You may have
to supply added documentation besides a mortgage note.
• You will have to pay the assessment fees. But if you work with a financing counselor who specializes in poor risks you may be able to avoid some of these fees.
CAUTION:
Certain mortgage consultants charge extra fees for “difficult” cases. It is typical for the broker to require fees if the financial institution does not pay the fee or if the amount of the mortgage is more than $90,000. In most cases (more than 80% of them) the financial institution pays a commission to the broker.
Never do business with a broker who:
• Requires payment of their fees before having completed the mortgage financing (at closing)
• Demands extremely high fees (a commission of 1.8% of the financed amount is normal, with a minimum of $1,500).
What have you learned from all of this. You can actually own a home, and own it now, even if you have less than perfect credit. This will be a big help to take advantage of increasing values in home prices. If you take the necessary steps, and work closely with a good mortgage financing counselor who specializes in less than perfect credit, you will have your dream home, and you will eventually have a home loan with the best interest rates(taux hypothécaire). Set up a meeting now with a specialized broker who can help you with less than perfect credit, and find out what steps you can take to own a home now.
Gregory is an Accredited Mortgage Professional (AMP). To get more information on mortgage rates - taux hypothécaire, please visit: Hypothèque - Get a loan
