Navigating the world of mortgage loans can seem like an impossible feat, but it does not have to be. If you are considering buying a home in British Columbia, the dedicated mortgage investment team from PHL Capital can help you get the right mortgage. Follow our helpful tips for qualifying for a mortgage loan to help make the process easier.
If you are having trouble saving to buy a home, here are a few excellent tips for effective budgeting.
Your credit score is one of the key factors that lenders use to determine your mortgage eligibility. In BC, mortgage lenders typically look for a credit score of at least 650, although some lenders may accept lower scores with additional conditions. Regularly monitor your credit score and take steps to improve it, such as paying bills on time and reducing outstanding debt.
In BC, the minimum down payment required for a home under $500,000 is 5%, while a home priced between $500,000 and $999,999 requires 5% for the first $500,000 and 10% for the remainder. For homes that are $1 million or more, a 20% down payment is needed. The larger your down payment, the lower your loan-to-value ratio will be, which can increase your chances of qualifying for a mortgage loan.
Learn how to save for a down payment.
Showing a steady, reliable income can greatly improve your chances of qualifying for a mortgage loan. This can be demonstrated through employment income, self-employment income, or even investment income. For those who are self-employed, lenders typically require two years of personal and business financial statements.
Mortgage lenders in BC consider your Gross Debt Service ratio (GDS) and Total Debt Service ratio (TDS). The GDS is the percentage of your gross monthly income used for mortgage payments, taxes, and heating costs and should ideally not exceed 39%. The TDS includes all other debt repayments and should not exceed 44%. Managing your debts and keeping them within these limits can increase your chances of qualifying for a mortgage loan.
There are different mortgage types available in BC, such as fixed-rate mortgages, variable-rate mortgages, and adjustable-rate mortgages. Each has its pros and cons, and the best choice depends on your personal financial situation and market conditions. The specialists at PHL Capital can help you understand these options and choose the one that best suits your needs.
The team at PHL Capital is ready to assist you on your journey to homeownership. Simply pick up the phone and call our mortgage specialists at 604-579-0847.