Purchasing a home can be an exciting yet stressful process, especially if you do not have all the information you need. This stress can be further amplified if you are dealing with various myths and misconceptions, as it can be difficult to determine which information to trust. As a leading provider of comprehensive residential, commercial, and construction lending solutions, the team at PHL Capital Corp knows how complex mortgages can be. That is why we have compiled a list of 3 common mortgage myths to dispel them and provide you with the facts you need to make an informed decision.
When reviewing your options for a mortgage, it is crucial to be aware of the following misconceptions:
While many people believe that self-employed individuals are not eligible for mortgages, this is not true. Lenders typically evaluate all potential borrowers based on the size of their down payment and their ability to repay the mortgage, whether they are self-employed or employed by a company. If a self-employed individual wishes to apply for a mortgage, they must prove that they are a consistently viable business. To prove this, they will need to provide the past two years of the following documents:
These documents will help lenders determine if your business and income are consistent enough for a mortgage.
Few individuals have a perfect credit rating. Between unexpected expenses, lingering credit card debt, and other factors, most people will go through events that reduce their credit scores. While a higher credit score certainly does not hurt to have, it is not the only deciding factor for mortgages. Most mortgage lenders will look at your credit score, debt-to-income ratio, and other elements to get the full picture of your financial situation. If a bank still declines your mortgage application after reviewing your financial picture, this is not the end of the road. With a variety of alternative lenders available, you should be able to find a customized solution that works for your needs and budget, allowing you to receive a mortgage even if your credit score is lower than you would like.
When it comes to mortgages, there is no such thing as the “objectively best” solution. In truth, the best place to get a mortgage will vary based on your circumstances. For example, some first-time home buyers may find that a conventional mortgage from a bank is the best option for their needs while other buyers may work with alternative lenders to create a solution that works better for their budget. That is why it is best to speak with a professional to learn more about your options and determine which is best for your current circumstances.
To learn more about our lending solutions, get in touch with the team at PHL Capital Corp. We can be reached by phone at 604-579-0847 and will be happy to answer any questions you may have regarding mortgages or our application process.