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How To Get Your Finances In Order Before Buying A House
October 19, 2022 @ 2:43 PM by: Angela Robinson

Have steady income

Lenders want to see that you’ve had a job with the same employer for at least 1 year. In the case of the self-employed, or small-business owners, lenders would qualify you based on your CRA notice of assessments from the last 2 - 3 years.

 

Improve credit score

Your credit score is between 300 and 900, and the higher it is the more creditworthy you are. This matters to lenders to determine how likely you are to repay loans. Improve your credit score by paying down debt and limiting your credit usage.

 

Save for a down payment

You need a down payment to qualify for a mortgage when buying a home. How much depends on the home price. Mortgages with less than 20% down is considered high-ratio. A high-ratio mortgage requires you to get default insurance, which is 2.8% to 4% of the mortgage amount.

 

Get familiar with government incentives

These incentive programs include the First Home Savings Account (FHSA), The Home Buyers’ Plan (HBP), and the First Time Home Buyer Incentive (FTHBI). All offer different pros and cons so be sure to pick the right one for you.

 

Get pre-approved

Getting pre-approved is the best way to prepare for homeownership. Lenders formally run your numbers and verify details. They’d look at your income, down payment, credit score, outstanding debt, and then provide you with an amount and interest rate for a mortgage.

 

Contact us today to get started at 780 701 3888 or marc@albertamortgagepros.ca

 

Full article: https://moneywise.ca/real-estate/homebuying-finances