purchase of your life. Shopping for a quality mortgage product is a key ingredient in that journey a choosing the right home starts with choosing the right mortgage.
While most mortgage shoppers often feel that getting approved for a mortgage is almost like winning a marathon, at WiiBid, we feel it’s the other way around and lenders need to do the work to impress mortgage seekers to choose the best options being provided to them – best rates, best terms, customer service, and care are key components of winning that transaction.
Here are 5 main buckets to consider in making your application attractive for lenders to compete over providing you with the best rates:
1. Evaluate Your Financial Budget:
Get intimately familiar with your financial report card. Your net worth ration is the combination of all your assets (good of value you fully own) minus all your liabilities (any amounts you owe) divided by all your assets. So, for example if you own a car that is worth $20K but have financed $15K, your assets related to this vehicle will be $5K and liabilities $15K.
Your total debt service (TDS) ratio (including housing) should be less than 42% if your gross household income. Debt could include payments towards things like car loans, credit cards, student loans, credit lines, child support, etc.
Considering lenders review the amount you are borrowing against your income and expenses. In some cases, you may need to take a step back before you can proceed forward to make your application attractive for the lenders – consider the following:
- Evaluate Your Total Debt – Are you paying high interest on a number of loans that you could consolidate under a lower rate umbrella?
- Evaluate Your Earnings – Are you leveraging your assets to gain income from the assets you own?
- Evaluate Your Budget – Is you purchase plan within your means and to what degree are you taking a risk? Are you able to produce a healthy down payment?
Lenders consider your gross debt service (GDS) ratio. Keep in mind when setting your budget, that your housing costs should be less than 35% of your total monthly gross household income. Housing costs are defined as mortgage payments, heating expenses, property tax, and 50% of strata fees if relevant.
2. Know Your Credit Score
While lenders know that your consumer credit score could be impacted by several factors, and there is often a reasonable explanation to bruised credits and the recovery process, lenders will review your credit score. Make sure you get a copy of your credit score before you begin searching for a mortgage. Review it for accuracy and report any potential errors for correction.
3. Consider Property Location & Value
Lenders think like investors so the quality and conditions of the property you have selected to purchase will impact your mortgage options. Lenders are more likely to offer their best deals to buyers with smart properties. While your property may be the place you call home and plan to live in, resale value is always at the top of mind for lenders as they want to be sure that they could sell and recoup the funds if the mortgage goes into default.
4. Leverage Mortgage Marketplace
Shopping for a mortgage has drastically changed and the latest trend is using auction technology while delivering control, comparison, and competition tools to mortgage seekers. WiiBid, is the leading Canadian mortgage marketplace that offers mortgage seekers the autonomy to create competition amongst lenders to secure the lowest rates possible. Since the buyer’s data is secured and masked during the auction, the auction is strictly driven by the 3 facts stated above. This consumer-focused approach makes the process simple, transparent and results-oriented. Lenders bid against each other to provide the best mortgage rates to consumers, that simple.
5. Consider a Co-Applicant (Co-Signer)
While any properties with joint ownership on title will require both parties to be included on the mortgage application, there are sole ownership scenarios where mortgage seekers could present a stronger application by leveraging the benefits of increased net worth, more income, or better credit to present a more attractive application. Lenders consider the risk of lending, along with the purpose as part of their decisions to offer you the best mortgage rates, so this is why getting help from a co-applicant might be a solution for some. Think about the following when selecting a co-applicant to get the most benefits:
- Do they have a good credit score?
- Have they been employed for longer than 2 years? or Do they possess a strong net worth?
- How much consumer debt do they carry? Do they have other mortgages?
As always, it is important to discuss the pros and cons of adding a co-applicant to your mortgage application with your financial advisor, accountant, and lawyer to ensure a fair and prosperous arrangement is achieved.
Chasing Banks, Brokers, and Lenders can be exhausting, especially since you can never be quite sure if you could have gotten a better rate elsewhere. So why not flip the tables, and let them chase you with their best rates instead? The quality and location of your property contribute to its value, your financial health and credit score are used to assess credibility, and finally adding a co-signer can help you quality for larger amounts and better rates. WiiBid is transforming the mortgage industry by shifting the work over to the lenders, designed mindfully with these 5 tips in mind, we are pleased to help anyone looking for the best mortgage rates to get the lenders bidding for them at the auction.