Have you ever wondered if you wouldn’t be able to qualify for a mortgage, or that it would be so difficult it’s not even worth trying?
You’re not alone. Many people ask themselves the same questions – either because they’re self-employed, have had financial difficulties in the past, or are just unfamiliar with the mortgage process.
But good mortgage brokers don’t just evaluate your current situation to see if you qualify. They’ll come up with a plan and provide reasonable, workable goals to help you qualify.
Do you want to own your home? Of course you do. And there are a number of ways to make it happen.
To really understand how a good mortgage broker gets you the right mortgage, you need to understand how lenders are looking at you.
What lenders look for: The 5 “C’s” of credit
Listen, when lenders evaluate a mortgage application, you need to know they’re not just looking at how much money you have. They’re determining your application based on five main areas of emphasis:
- Capacity – whether your income is sufficient to repay the mortgage once all your other debts are factored in.
- Capital – whether the size of your down payment indicates a serious commitment to the property on your part, and sufficient minimization of risk on the part of the lender.
- Collateral – whether the property is of sufficient value and marketability to cover the amount borrowed.
- Character – your reputation and reliability, usually based on factors such as your education, employment history and residence.
- Credit – your history of meeting credit obligations, which is based on credit bureau records for the past six years.
How a mortgage broker looks at you
In unique situations, if one of the five “C’s” is weak, but the other four are strong, we can be creative in how we address the deficiency.
It involves going beyond where the average mortgage specialist at your local bank is willing to go.
In part 2, I’ll tell you about a mortgage application I had here in Ottawa that involved a couple with uniquely adverse personal circumstances.
One of the partners had no credit, not even a bank account. Ever.
But they were able to achieve their dream, and buy their first home.