Too many renters merely dream of owning a Grande Prairie home instead of buying it because they think they can’t. Many clients of Grande Prairie mortgage brokers say that we have helped them get into a new home.
Myth 1: I Need 20 Percent Down
This myth is based on a germ of truth. You do need 20 percent equity in the home to eliminate private mortgage insurance. However, you don’t need 20 percent equity to qualify to buy the house. You don’t even need 10 percent down. Depending on your credit and the mortgage you choose, you may be able to buy a home with less than 5 percent down. Know that this does tend to raise the interest rate, and your house payments are proportional to the loan balance.
Myth 2: Interest Rates Are Too High for Me To Buy
Canadian mortgage stress tests do cause many who are on the edge of qualifying to buy a home at the limit of their budget to fail the stress test. This doesn’t mean you can’t buy a home. It may mean you need to save up a larger down payment. Or you may need to find a more affordable property. Cleaning up your credit so that you qualify for a lower interest rate may be necessary, as well. However, mortgage interest rates are rarely going to be the deciding factor.
Myth 3: My Credit Isn’t Good Enough
If you just came out of bankruptcy, then that may be true. For nearly everyone else, it isn’t. Your credit score and bill payment history will impact the interest rate and loan terms you are offered. However, even those with bad credit can qualify for a home loan. Take the time to pay all your bills on time and in full for a year or two, and you can argue with a Grande Prairie mortgage broker that you’ve gotten your financial house in order. Pay down your debt so that your debt to income ratio is better, and you may qualify for a home loan.