Getting the Best Mortgage Rate
There’s a wide array of requirements that need to be met in order to secure the best possible mortgage rate. By foreseeing obstacles that may prevent you from getting the best mortgage rate you can prepare to win!
In order to qualify for the best pricing on mortgage rates you need to be able to prove one to two years’ worth of stable, salaried income. So if you’ve just started your own business and taken a significant salary cut, it may be more difficult to get a good rate. This could also mean needing to make a larger down payment.
Some lenders charge more if you have an unusual property. Properties including (but not exclusive to) high-rise condos, co-ops, former grow-ops, larger residences, cottages, and other non-standard buildings will have higher rates because lenders view them as “high-risk”.
From a lender’s perspective, bigger mortgages mean potential for bigger losses if the owner defaults. This added risk factor results in stricter lending limits, especially on mortgages exceeding one million dollars without at least 25 percent paid down.
It’s very uncommon that the cheapest rates in Canada apply to residences that are owned for the sole purpose of generating income, that the home owner doesn’t live in. Statistically, these deals are higher risk for investors and lenders so you should expect a higher mortgage rate.
The most common minimum credit score to qualify for a good mortgage rate is 680, especially if you have a smaller down payment or a higher debt ratio. However your credit number isn’t everything. To qualify for the best pricing you need a two year track record of managing your credit with no major delinquencies.
A mortgage agent can help you navigate the specifics of securing the best mortgage rate for your unique financial needs and goals. Contact us today!
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