Market trends give investors plenty to think about

Rental property investment can be a lucrative venture when market conditions are favourable. As vacancy rates fluctuate and rental demand shifts, investors and landlords have opportunities to maximize the value of their investments.

Rental markets across different regions can vary significantly, with some areas experiencing low vacancy rates and others facing higher competition. These market dynamics often influence rent prices and can contribute to broader economic trends.

In this context, savvy investors could benefit from strong rental incomes while also contributing to the housing stock in their communities.

As an experienced agent who has worked with numerous landlords, I’ve observed that the amount you can charge for rent depends on various factors, with the property’s condition being a crucial element.

While location significantly influences rental income, offering a well-maintained property is key to attracting quality tenants and maximizing your returns.

Below, I’ve compiled a list of issues that can deter potential tenants and negatively impact your rental income. By addressing these factors, you can enhance your property’s appeal and potentially increase your rental yields:

Up and comers

Neighbourhoods experiencing increasing popularity and attracting younger residents are ideal hunting grounds for investment properties. Prices will be below those of more established areas, offering good capital growth in the medium to long term.

Limit risk

Diversify your investments. Don’t plough all your money into one neighbourhood or even the same city. Your portfolio should be spread over several geographies to protect yourself from local volatility.

Cash conscious

Attracting good quality tenants is essential to your success. You can only do that by offering quality accommodation. However, you don’t have to buy gold faucets and the best of everything to do it. Purchase mid-range fixtures and fittings.

Debt danger

Don’t overleverage yourself. The rental market is producing record income for investors today, but don’t let a couple of empty properties tip you over the fiscal edge.

Favorite rentals

There’s pretty much a market for every type of property right now. Over the years, however, the family home has proven the most reliable at attracting loyal tenants and substantial income.

NOTE: The information in this article is general and provided as a general overview only. Always consult your financial advisor or accountant for advice specific to your circumstances.

Posted on November 7, 2024 at 4:21 pm
Margaret Burt | Category: Financial, Investing | Tagged , ,

Six tips for buying a great vacation rental

Owning a vacation rental or working towards a life in the countryside are fabulous ambitions for those who have already invested in real estate.

Owning your own home can give you many life choices down the track, especially when the family has grown up and moved out. Having a second residence or vacation rental is one of those #lifegoals achievements.

But is a vacation rental a sound investment?

While it can be the base for fabulous memories for you and your family, what is the possibility that you might make some money along the way by renting it out, using a property manager, Airbnb, or similar services?

As an experienced agent, I’ve learned that a vacation rental is rarely a get-rich-quick scheme. Your income will depend on the style and size of the property and the area in which you buy.

I’d also suggest that finding a profitable vacation rental requires more research than any other investment property.

It’s a good idea to talk to a local real estate agent such as myself about the area’s property values and vacation rental levels. You might also get some help online from Airdna (yes, Airdna!), which measures revenues and occupancy rates.

Here are a few issues to consider if you’re thinking of investing in a vacation rental. I hope they prove helpful to you:

  1. Revenue can be seasonal – It’s a rare property whose income doesn’t ebb and flow with the seasons. And remember, you can attract higher rents in peak periods. The downside might be when you wish to spend your time at the property.
  2. Location is criticalit will determine your income more than any other factor. Properties near a lake and a tourist spot will do very well compared with those in a town several kilometres from the nearest attraction. Try to find somewhere that’s a popular destination.
  3. Calculate costsDue diligence is critical to ensure the rental does not become a cash-flow headache. Be sure you can handle any mortgage costs, insurance, taxes, maintenance, cleaning, and the rental company’s fees.
  4. Don’t underestimate maintenance. The property may stand empty for weeks at a time, which can lead to problems if left unattended.
  5. Check tax benefits – Use a professional financial adviser to maximize any opportunity to gain tax advantages and write-offs from your rental.
  6. Don’t be blindsided – If you spend a certain number of days in a vacation property or more than 10% of the days it’s rented, you could lose all tax benefits. Talk to your professional financial adviser to get the latest tax rules.
Posted on November 1, 2024 at 6:31 pm
Margaret Burt | Category: Buying, Financial, Investing, Investing, Investing | Tagged , , , , ,

Nine-point strategy to find your ideal investment property

Finding a great investment property requires due diligence and discipline around the organization of your finances.

You need to be on top of mortgage and tax obligations and potential income and tax benefits and write-offs you’ll receive.

Focus on the anticipated financial benefits from an investment property: are you seeking an outright profit from day one, or is the purchase strategic to minimize tax or develop a long-term wealth portfolio?

As an experienced agent in Saskatoon, I’ll always suggest to my investor clients that they seek professional financial advice to avoid unforeseen costs.

Picking the right property in which to invest requires an equal amount of attention and research. And if you’re looking at an investment property right now, you’re likely ahead of the curve.

To help you search, I’ve listed nine critical considerations in deciding on an investment property. If I can assist you in locating a suitable apartment or house, please do not hesitate to contact me.

  1. VacanciesAlways look at the number of vacant rental properties in the neighborhood. You don’t want to invest where there’s an oversupply of properties—it’s a sure sign that rents will be going down.
  2. Rental income – Compare the rents being asked for similar properties. Can you make your numbers work at the going rate?
  3. Future developmentsAre any significant new property developments about to come onto the market? A release of several hundred apartments places pressure on rental incomes and can result in a short—to medium-term fall in values and rental competition.
  4. Employment – Neighborhoods with readily available employment are usually rental solid performers. Find out about major local employers in your target areas. This can be positive if there is a strong hospitality and casual workforce, which is usually evident in tourism centers and university towns.
  5. Entertainment – Finding a location close to cafes, restaurants and movie theatres is gold if you want an apartment with young professionals as tenants.
  6. NeighbourhoodThe locality influences the type of renter. Any location near a university or major hospital will attract students, lecturers, doctors, nurses, and others employed in those institutions.
  7. Schools – A rental property near a school with an excellent reputation can be an effective investment strategy, especially if you’re considering investing in a house. Families who rent are usually longer-term tenants. You may struggle to find a tenancy if education requires a long bus trip.
  8. CrimeCheck local crime statistics, as vandalism and petty crime can diminish the value of your investment and diminish your returns.
  9. TaxesDo your due diligence on your preferred locations. Look for areas with higher property taxes and local tax levies.

I hope you’ve found this list helpful. If I can help you secure an investment property, please do not hesitate to contact me. We can discuss tenant preferences and rental income trends and the best way to attract long-term reliable renters for you.

Posted on November 1, 2024 at 6:08 pm
Margaret Burt | Category: Buying, Financial, Investing | Tagged , , , ,

Eight buying tips as Canada waits for rebound

Industry data shows buyers oversee the property market, unsure how the latest cut in interest rate will affect prices against a backdrop of economic challenges.

Savvy buyers are already on the move, convinced values will rebound as the cost of mortgages falls.

It’s generally accepted that any central bank needs to cut rates by 1% to convince buyers to change their cautious behaviour.

Pundits reading the financial world’s tea leaves are convinced the Bank of Canada will cut even deeper into 2025. As a result, savvy buyers are active now, determined to strike a deal before property values rise due to cheaper access to loans.

Affordability is still an issue, but these buyers believe the short-term pain of today’s 4.25% mortgage rate will be worth the discount of buying at today’s prices.

We are already seeing this trend emerge.

The Royal Bank of Canada (RBC) reports that home resales were up 1.3% between July and August. Inventories are growing, too—they’re double the level of 2021.

And the MLS Home Price Index remains steady at $717,000, a 3.9% decline from 12 months ago.

The biggest unknown is the state of our economy, primarily as job security significantly influences property market confidence.

RBC said in a recent report that the labour market was “softening at a pace and magnitude consistent with prior recessions.”

However, it added that 80% of the rise in unemployment has come disproportionately from students and new graduates. So, the jobless rate of 6.6% is slightly misleading.

Here’s how to respond to today’s market as a buyer:

  • Prioritise Search: The market moves quickly, and buyers wanting to capitalize on the current situation know they don’t have months to hang around. Focus on your target areas and the type and size of property you desire.
  • Cash is king. Get your finances in order. Get a pre-approved mortgage so you can make offers with confidence.
  • Talk to Agents: Demonstrate to an agent that you’re aware of the market’s current status. This signals that you’re an informed and serious buyer.
  • Don’t Rush: The window of opportunity won’t last forever, but never rush into a decision. Don’t let FOMO (fear of missing out) sway your judgment.
  • Due Diligence: There’s no excuse for skipping essential steps in the buying process. Always order a building inspection.
  • Start Negotiating: Be ready to act decisively. Your research will give you a firm idea of the home’s value. If you’re serious about a deal, don’t low-ball. Make an offer and justify how you came to that number. Leave cash in reserve in case you need to give a little ground.
  • Juggling Act: If you find more than one dream property, negotiate on multiple fronts. No rule says you can only focus on one property at a time.
  • Extra Care: Always insist on conditions as part of your deal. These would include the property passing a building inspection and your ability to obtain the necessary finance.
Posted on November 1, 2024 at 5:00 pm
Margaret Burt | Category: Buying, Financial | Tagged , , , ,

Smart Financial Planning: Essential Tips for Millennial Homebuyers

Welcome to our blog! As a Saskatchewan-based real estate agency, we understand that buying a home is one of the most significant financial decisions you’ll make. If you’re a millennial looking to step into the property market, it’s crucial to have your personal finances in order. Here are some essential tips to help you navigate this exciting journey.

1. Understand Your Financial Health

Before diving into the real estate market, take a good look at your financial situation. Calculate your net worth by subtracting your liabilities (debts, loans, etc.) from your assets (savings, investments, property). This will give you a clear picture of your financial health and help you set realistic home-buying goals.

2. Create a Budget and Stick to It

Budgeting is the cornerstone of financial stability. Track your income and expenses to see where your money is going. Categorize your spending into essentials (rent, groceries, utilities) and non-essentials (entertainment, dining out). This will help you identify areas where you can cut back and save more for your down payment.

3. Save for a Down Payment

In Saskatchewan, a typical down payment ranges from 5% to 20% of the home’s purchase price. Start saving early by setting aside a fixed portion of your income each month. Consider opening a high-interest savings account to maximize your savings. Remember, the larger your down payment, the lower your monthly mortgage payments will be.

4. Pay Down Debt

High-interest debts, like credit card balances, can eat into your savings and affect your ability to secure a mortgage. Prioritize paying down these debts to improve your credit score and increase your borrowing power. Consider using the snowball or avalanche method to tackle your debts effectively.

5. Build an Emergency Fund

Life is unpredictable, and unexpected expenses can arise at any time. Aim to save at least three to six months’ worth of living expenses in an easily accessible emergency fund. This will provide a financial cushion and prevent you from dipping into your home savings in case of emergencies.

6. Understand Mortgage Options

There are various mortgage options available, each with its pros and cons. Fixed-rate mortgages offer stability with consistent monthly payments, while variable-rate mortgages can be lower but fluctuate with market rates. Research and compare different mortgage products to find the one that best fits your financial situation and long-term goals.

7. Get Pre-Approved for a Mortgage

Getting pre-approved for a mortgage gives you a clear understanding of how much you can borrow and shows sellers that you’re a serious buyer. It also helps streamline the home-buying process and can give you a competitive edge in a hot market. Gather all necessary documents, such as proof of income, tax returns, and bank statements, before meeting with a lender.

8. Consider Additional Costs

When budgeting for a home, don’t forget to factor in additional costs beyond the purchase price. These can include property taxes, home insurance, maintenance and repairs, utilities, and closing costs. Having a comprehensive understanding of these expenses will help you avoid any financial surprises down the road.

9. Seek Professional Advice

Navigating the real estate market can be complex. Don’t hesitate to seek advice from financial advisors, real estate agents, and mortgage brokers. They can provide valuable insights and help you make informed decisions throughout the home-buying process.

10. Stay Informed and Flexible

The real estate market is dynamic, and conditions can change rapidly. Stay informed about market trends and be flexible with your home-buying strategy. Whether it’s adjusting your budget or exploring different neighborhoods, being adaptable can help you find the perfect home within your financial means.

Buying a home is a significant milestone, and being financially prepared is key to making this dream a reality. With a little work and patience you can build a strong financial foundation and confidently navigate the Saskatchewan real estate market. Remember, I’m here to help you every step of the way. Happy home hunting!

Posted on June 3, 2024 at 7:11 pm
Margaret Burt | Category: Buying, Financial | Tagged , , , ,

Navigating the Canadian Real Estate Market: Understanding Interest Rates

Did you know that the interest rates can greatly impact the real estate market? When the interest rates are low, it makes it more affordable for buyers to finance their home purchases. However, if the interest rates rise, it could make borrowing more expensive and possibly reduce demand for real estate. Let’s delve into how Canadian interest rates should affect your decisions when it comes to buying or selling real estate.

 

The Relationship Between Interest Rates and Real Estate

Interest rates play a pivotal role in shaping the behaviour of buyers and sellers in the real estate market. When interest rates are low, borrowing costs decrease, making it more affordable for individuals to finance their home purchases. Conversely, when interest rates rise, borrowing becomes more expensive, potentially dampening demand for real estate.

 

Impact on Buying Real Estate

Affordability: Low interest rates can make buying a house much easier by lowering monthly mortgage payments. This means that more people can afford to buy homes, leading to an increase in demand for properties. However, when there’s a high demand for homes, it can sometimes lead to bidding wars, which could drive up home prices.

Purchasing Power: Low interest rates can help you afford more expensive properties or larger homes. That’s because they enhance your purchasing power. And the best part is, this can actually stimulate activity in the real estate market. So, if you’re looking to buy a property, it might be a good time to take advantage of these favourable financing conditions.

Investment Opportunities: You know what they say, when interest rates go low, investors go high! It’s the perfect opportunity to expand their real estate portfolios and go on a property shopping spree. With cheaper financing options available, they have more flexibility to add a few more homes to their portfolio, or invest in some real estate ventures. 

 

Impact on Selling Real Estate

Market Activity: One of the most important factors to consider when selling a home is the impact that interest rates can have on the real estate market. When interest rates are low, it tends to stimulate buyer demand, which can create a seller’s market. This can mean that there are fewer properties available for sale, and as a result, sellers may receive multiple offers and achieve higher sale prices.

Timing: If you’re looking to sell your property, it can be a good idea to time your listing to coincide with periods of low interest rates. This can help attract more potential buyers who are motivated to purchase, which can create favourable conditions for sellers to achieve their desired selling price.

Competition: In a competitive market driven by low interest rates, sellers may have the upper hand. Buyers may be competing for limited inventory, which can lead to quicker sales and potentially multiple offers on a property. This can provide sellers with leverage in negotiations, giving them more power to achieve their desired outcome.

 

Considerations for Buyers and Sellers

Financial Planning: Whether you are planning to buy or sell (or both!), make sure you think about your financial situation and what your long-term goals are. It’s important to consider how changes in interest rates might affect what you can afford and what financing options are available to you.

Market Conditions: It’s also always a good idea to stay up-to-date on current real estate market conditions. That means keeping an eye on things like interest rates, how many properties are available, and how prices are changing. This can help you make smart decisions and get the best possible outcome.

Consultation: Finally, don’t be afraid to reach out to experts in the field, like real estate agents or financial advisors. They can give you advice that’s tailored to your specific situation and help you navigate the market more effectively. That way, you can feel confident that you’re making a well-informed decision that’s right for you.

 

If you’re planning to buy or sell property in Canada, it’s essential to understand how interest rates can impact your decision-making. Whether you’re a first-time buyer or an experienced seller, staying up-to-date and seeking expert advice can help you navigate the ever-changing real estate market with confidence. Let’s work together to ensure you make the most informed and strategic decisions possible!

Posted on February 1, 2024 at 1:02 pm
Margaret Burt | Category: Buying, Financial | Tagged , , , , , ,

Budgeting 101: Saving for a New Home

Homes aren’t cheap. And with a minimum 5% down payment needed to secure a mortgage, saving enough can feel impossible. Saving to buy a home requires discipline and careful budgeting. Here are some tips to help you get started:

 

1. Set a Goal

Without a target in mind, saving can feel intangible. Setting a clear goal helps you to stay motivated and focused. Look at homes for sale in your area and get an idea of what you would like to be able to afford. You can then determine how much you’ll need to save. For added motivation, give yourself a target date for achieving that savings. This can help curb unnecessary spending while saving up for a down payment.

 

2. Create a Budget

To budget, you will need to budget (obviously!). Make a detailed list of your income and expenses, so you have a clear idea of what you have to set aside. Track your spending habits and identify where you can cut back. Then allocate a specific amount each month toward saving for a new home.

Pro Tip: Set up an automatic transfer between your chequing and savings accounts on your dedicated payday. This way, you won’t need to remember to manually add the money each month. Plus, when it’s out of sight, it’s usually out of mind, and you’ll be less likely to overspend!

 

3. Cut Back on Spending

As I mentioned in creating your budget, it’s essential to reassess your spending habits to reduce non-essential spending. Consider meal planning to save on eating out and cut back on entertainment. Before spending, think about whether it is a want or a need.

 

4. Minimize Debt

By reducing your existing debt, you will free up more money to put toward saving for a new home. Prioritize paying off high-interest loans, like credit cards, and avoid adding new debts while saving. If you want to buy a new home, maybe that new Range Rover will have to wait…

 

5. Set Aside Rebates & Bonuses

While it may seem tempting to put that climate action incentive payment toward a nice meal or a new gadget, consider the boost it could make in your savings plan. Plan to put tax returns, government payments, and other bonuses throughout the year directly into your savings. This way, you can eliminate the temptation of overspending and put that supplementary income toward saving for a new home.

 

6. Research Government Programs

The Government of Canada has several ways to help homebuyers—particularly first-time homebuyers—afford a down payment. These include the Home Buyers’ Amount, First Time Home Buyer Incentive, First Home Savings Account, and GST/HST New Housing Rebates. To learn more about these programs and find out if you are eligible, visit their Buying a Home page or talk to your financial advisor.

By following these budgeting tips, saving for a new home can become much more attainable. But it’s important to remember that even with these tips, you must remain patient and persistent. Saving for a down payment takes time, and you have to stay committed to your goal for the long term. Unexpected expenses can happen, and patience is vital to getting through those circumstances. Celebrate the small wins along the way, and remember that every dollar saved is another step closer to owning a home!

Posted on June 1, 2023 at 1:33 pm
Margaret Burt | Category: Buying, Buying, Financial, Financial | Tagged , , , , , , , , , , , , , ,

4 Tips For Budgeting a Home Renovation

Renovations, especially when preparing your home for sale, can make or break how quickly your property will stay on the market. It’s easy to get caught up in the excitement of choosing new finishes for home projects or be blindsided by unforeseen hiccups that can dramatically increase costs. Deciding on how much to spend on home improvement projects can be tricky—lucky for you, I have compiled some tips that will help you stay on track and minimize any unwanted surprises!

Set Your Spending Limit

According to Zillow, you should spend no more for each room than the percentage of what that room values in the overall house value. For example, the kitchen generally makes up to 15% of the overall property value. If your home is worth $200,000, you will want to cap remodelling expenses at $30,000.

Another good guideline is not spending more than 10-15% of your home’s value on a single room. Any more than that will not proportionally add to the value of the home. HomeAdvisor states the average cost to renovate a kitchen at $4,000 – $60,000, a bathroom at $2,500 – $25,000, and a basement at $11,000 – $30,000. Keep in mind that older homes will often cost more to renovate if wiring and plumbing aren’t up to code.

You will also need to determine how you are financing your project! Your renovation budget will need to fit within the limit of available funds, whether it is by cash, loan or credit.

Prepare for Hidden Costs

This tip is possibly the most important of them all, so listen closely. Once you have concluded how much you can afford to spend, set aside 10-20% of your available funds for any unexpected expenses that may arise. You might have heard of the phrase, “things happen,” and it definitely applies to home renovations. Things go wrong or cost more than what was initially predicted, and by setting aside these funds at the beginning, you know that you will still have enough cash to cover no matter what happens.

Prioritize & Make a Plan

So long as there is no expertise required, consider doing some tasks yourself to help reduce labour costs. Things like pulling up tile, removing old cabinets, ordering your own fixtures and finishes, shopping for used or refurbished items, and doing your own painting are all easy to do yourself.

 

You’ve used all these tips and added value to your home, so now what? You don’t want to risk pricing too high in risk of not selling. Contact your favourite local REALTOR® for a free home evaluation!

Posted on August 2, 2021 at 4:22 pm
Margaret Burt | Category: Financial, Selling, Selling, Selling | Tagged , , , , , , , , , , ,

Top 5 Benefits of Owning a Home

I’m not going to beat around the bush; a house is a big purchase and a huge life milestone. You want to make sure you are making the right choice. Have you been wondering if it is worth it to take the leap? Are you overwhelmed by all the information out there? While there are many benefits of owning a home versus renting one, here are some of the top ones you’ll want to consider!

#1 – It’s a Great Way to Build Equity

First off, what does equity mean? Equity refers to the probable market value of your property against any liens (such as a mortgage). The longer you own a home and pay towards the balance of any liens, the liens will gradually decrease as the property value and your equity in the home increase. The larger the home equity you have, the more borrowing and purchasing power you earn towards loans for home improvements, funding your children’s education, or other consumer goods such as a car.

While you build your equity as a homeowner with regular payments, your credit score will also receive a nice boost!

#2 – Your Investment Gets Better With Time

 Investing in buying a house provides a better return than most other investments, such as a car. Depreciation begins as soon as you drive the car off the lot, where owning a home behaves in the opposite, appreciating in value over time (depending on market conditions).

Though even an experienced local REALTOR® cannot predict precisely what will happen with your home value in the coming years, they can provide past values for the neighbourhood. Looking towards the trends on values on homes in the area will help gain some understanding of what you can expect.

#3 – Less Expensive Than Renting in the Long Run

Yes, really! When buying a home, there are, of course, many upfront costs—down payment, appraisal fees, homeowner insurance, etc. And, similarly, you are paying a certain amount per month. However, as stated in the first point, you are paying to own the home, and your personal net worth increases. Whereas, with rental properties, you are paying to use the landlord’s property to live.

Check out Renting vs. Buying: Which is Better For You for a more in-depth comparison!

#4 – Plant Your Roots

Options for rental properties are often limited in terms of location. Buying and owning your home means you get to CHOOSE where you want to live; the neighborhood and proximity to schools, parks, your employer, and other amenities. By this choice, you can be sure you will have pride in ownership, not only in your property but your community, by forming relationships with fellow neighbors, local services & politicians and taking part in community events.

#5 – Freedom to Customize Your Space

This might be the last on the list, but it is certainly not the least. Actually, this might be the best reason of them all! While renting, you are at the mercy of your landlord in terms of colour and style choices made and cannot alter them. Ownership offers you the freedom to make changes. Paint the walls, rip up that carpet, install a secret door—the choice is yours! To make the deal even sweeter, not only will these changes make the house feel more like home, but they can elevate your property’s value as well.

Of course, there are countless other benefits and considerations for purchasing a house. However, the best way to ensure you are finding the perfect home for you and your family is to work with your very own REALTOR®.

Don’t have one? I’d be happy to help—contact me today!

Posted on June 4, 2021 at 3:16 pm
Margaret Burt | Category: Buying, Financial | Tagged , , , , , , , , ,

Costs and Considerations When Buying a Home

Beginning a home search is exciting and many people just jump right in without considering all the elements that make a home truly right for them. It is a complicated and personal process. With an unsuitable choice, you could lose money, waste time and effort relocating, or even put your family’s health in danger.

Choosing a Neighbourhood

Remember that you can renovate a house, but neighbourhoods take years to change and there is no guarantee they will change for the better! On the other hand, if you really love a certain part of town but it’s out of your price range, you may way to consider buying a less-than-perfect home then doing renovations. They can be quite expensive so try to make improvements that will be reflected in the value when you sell. These renovations have been found to have the greatest payback:

• kitchen 70%

• bathroom 68%

• interior paint 65%

• exterior painting 62%

Tips on Choosing a Suitable Neighbourhood

• When you find a locale you like, take a walk around it. See what it’s like from street level.

• Are the people friendly?

• Are there stores and recreation facilities nearby?

• Contact the local school board if you have children. Do local schools provide good education opportunities? If applicable, are there private/religious schools?

Figure Out What You Can Afford

Consider how much you currently need to live on and how much you actually have leftover every month. People have a tendency to create budgets that look nothing like reality – when I should have $400 leftover, for some reason I only have half that.

Consider these basic costs of buying a new home:

• A down payment of several thousand dollars is required

• Monthly mortgage payments can be 1/3 of the average person’s annual net income

• You may want to pay for a home inspection. Make it a thorough inspection of the home. Ask the inspector to check for asbestos, pest infestation and lead.

 • Consider moving costs. This can range from a couple hundred to several thousand dollars depending on the distance of your move and the number of belongings.

Financing

The sort of home you can afford depends on several things:

• How much you have saved

• How much you earn

• Past earnings

• Your credit rating

If you are concerned about your credit rating, you can usually get a free copy of your rating report from a local credit bureau. Normally all that is required is a couple of pieces of photo identification. Remember, a few late payments or disputed bills can damage your record. Try to pay everything on time and don’t have more than two credit cards. Having a bad rating makes it difficult to get a mortgage, or you end up paying more for your mortgage as a form of insurance to the lender.

Pre-Qualification

Documents from a bank or other lender that indicate that you have the financing to back up an offer on a house verifies pre-qualification. This is a free service and most lenders are happy to sit down with prospective buyers to figure out how much they can afford. Having an accurate idea of a price range you can manage will save time in the bidding process. If there are several people making offers on your dream home, being pre-qualified can make your offer more attractive, since financing is not a question. However, keep in mind that lending institutions will base their final decision about a mortgage on the ability of the buyer to service the debt as well as the property. Most lenders say the two components go hand in hand – the buyer with the ability to repay a mortgage and the property as security in the event of default on payment.

 

By considering all these points, you can worry less about the process of buying and get busy finding your ideal home!

Posted on August 2, 2019 at 11:10 am
Margaret Burt | Category: Buying