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We know how easy it is to find yourself with less than perfect credit, but when your credit record is poor just when you want to apply for a mortgage (taux hypothèque), it is really upsetting. In evaluating the file of a mortgage applicant, the credit report is a critical element for a home loan lender. The lender needs to evaluate the risk assumed with each mortgage application. Yet, there is a home loan strategy for you even if you do have a “less than perfect credit”. It will take place in three to four steps, but in taking these steps, you will achieve your goal of eventually getting a mortgage at the lowest interest rate (taux hypothèque) possible. Step 1: Get a mortgage Depending upon your credit record, the first step is to have a three year fixed mortgage with an interest as low as possible (even if, in certain cases, you are taking a chance on your mortgage term being too short.) There are quite a few lenders (over 10) whose mortgage financing criteria is less strict than others. There is a way out for almost any credit situation! There are two important factors that control the interest rate that you will receive, the biggest being your credit report and your down payment. Step 2: Fix your credit In the beginning two years of your mortgage, use the time to work on your credit rating. Meet with a good mortgage financing credit expert specializing in loans for less than perfect credit. He will help you through all the steps you need to take in order to fix your credit. Step 3: Renew your mortgage at the best rate Once you have established a good credit report, some financial institutions will be prepared to give you a very good rate - taux hypothécaire. You have to know how to properly present your application to the right kind of lender. In certain cases where the credit report is very bad, you may have to take an additional step before you will obtain the best rates. (taux hypothécaire) Advantages: • Buy a home sooner and be able to take advantage of any upswings in home values. (Read our publication: Will housing prices continue to rise? Forecast for 2006 and 2007”) • You have established a period of time during which you can work on your credit rating • You will get improved rates (taux hypothécaire) in the future - taux hypothèque Disadvantages • The interest rate for the first three years is frequently very high - taux hypothèque. • The mortgage payments will probably be very high (it is possible in some cases to keep the payments lower by increasing the amortization term during step one in order to reduce it in the third step). • Financial institutions often require more documentation in addition to the mortgage note. • The down payment is very important, but it is possible to have a no down payment mortgage in certain cases. • Assessment fees are the responsibility of the buyer • It is not possible to receive a pre-authorization, but a good mortgage financing credit counselor who specializes in this type of loan should be able to help you. WATCH OUT! Be careful of mortgage brokers that have extra fees for so called “difficult” cases. A broker is entitled to a commission if the mortgage is over $90,000 or if the lending institution does not pay it (which it does in over 80% of mortgage loans). Be careful of any mortgage consultant who 1) Requests to be paid for their fee before the mortgage financing has taken place (at the closing). 2) Has very high fees (the normal rate is about 1.8% of the financed amount, with a minimum of $1,500). What have you learned from all of this. You can really own a home, and own it sooner rather than later, even if you have less than perfect credit. This will help you to take advantage of increasing values in real estate prices. If you take the necessary steps, and work closely with a good mortgage financing credit counselor who specializes in less than perfect credit, you will get your dream home, and you will eventually have a mortgage with the best interest rates(taux hypothecaire). Arrange a meeting now with a specialized consultant who can help you with less than perfect credit, and find out what you can do to own a home now.
Article Source: http://www.financemanual.com
Gregory is an Accredited Mortgage Professional (AMP). To get more information on mortgage rates - taux hypothécaire, please visit: Mortgages - hypotheque
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