Author: Paramjit S. Girn

paramjit s. girn

Mortgage Delivery Guy & team helps Ontario residents with real estate mortgages. Beside preparing the quality content we help you Leverage your Time & Banks Efficiently to Be Mortgage Free Quicker! Connect with Ontario licensed Mortgage Planners via 1-800-808-1613 for professional & effective Mortgage Planning & Credit Repair services


Testimonials

Parmjit's services are out of this world. Paramjit is Punctual, Professional, honest, Respond quickly, Reliable. I would like to recomend all of his services.

-AJ S

Read More...

First Time Home Buyers Mortgage Planning Triad


For first time home buyers, a decision on a mortgage is among the most important decisions they will ever make in their life! If you are reading this you have decided to move forward, but very likely have many questions about your eligibility, the current market and what to expect. Don’t worry – Paramjit Mortgage Delivery Guy is here to help! I love working with first time home buyers and gain great satisfaction in seeing how my knowledge enlightens and empowers them. If you are in search of a promising future you have come to the right place. My commitment is to make this process as easy as possible for you.

 

 

 

To begin with it’s important to understand a few basic principles behind how Canadian mortgage services work, and how your strengths and weaknesses affect your eligibility and prospects. For all first time home buyers a bank typically assess the ratio between said income and debts, and approves a mortgage accordingly.

 

home buyers triad

Mortgage Planning for those who prefer paying off their mortgage quicker!

Your CID profile is what determines your prospects, interest rate and general level of attractiveness to lenders. CID stands for credit, income and down payment:

CID Profile

This profile is made up of the following three factors:

  1. Your credit score
  2. Your credit rating is made up of more factors that you may realize, and credit card use is only one of them. Reports on your account can also some times be inaccurate and this can really hurt a rating for first time home buyers. If this is the case it will make you a less desirable candidate and will cost you more, so getting help from a knowledgeable professional is critical.

  3. Sufficient verifiable income
  4. Contrary to popular notions, income size for first home buyers is not as important as is commonly thought. The big picture is what matters. Talk to me for more details!

  5. Down payment
  6. Basically, the higher your down payment, the lower your principle mortgage which leads to lower monthly payments.

Most people have no idea what their CID profile is yet they go ahead anyway, putting their trust in big banks that may not have their best interests at heart. The only defense against people who may take advantage of you is self education. Knowing your CID profile is part of this. It gives you agency and that is no small thing for first time home buyers. Agency means power, and with power comes more choices that affect your future!

The good news is you can find out right here what your profile is like by using the table below. By following this quick and easy process you will have changed the course of your future for the better! That sounds like something that is well worth a few minutes of your time.

From the table below, select the scenario that best describes your situation. You can use the following information to guide you:

 

Credit
Score
Verifiable Income Down Payment Chose What Best Describes
Your Situation below
 
More Than or
equal to 680
Yes 5% or more I am Ready! Let's set up a Strategy Session (SS) i am ready
Not Sure
More Than 680
More Than 680
Yes
Yes
Not Sure
5% or more
5% or more
Not Sure
My credit is Shot
I can’t get rid of my cheap employer
I Can't Save Enough for down payment
bad credit mortgages
Not Sure Not Sure Not Sure My situation is very special. Need to discuss it with a mortgage expert immediately. special situation

 

Credit Score:

A credit score of more than 720 is good but again, best you hire a mortgage expert to help iron out any inaccuracies that might be in your report. From the table below, select “not sure” if any of the following situations apply to you:

  • You do not have a credit rating because you are new to the country, have been discharged from a proposal or have previously gone bankrupt
  • Your credit score is less than 720
  • You have never used a credit card, preferring to rely on cash purchases
  • You have a history of late payments in the last three years
  • Unpaid bills have been forwarded to collection agencies in the last three years
  • You’ve never checked your rating and simply do not know what it is

If you have any questions whatsoever about your credit score, contact us, we can help!

Sufficient Verifiable Income:

For first time home buyers, sufficient verifiable income is comprised of gross income available for payment of all debts as per lender requirements. Income that qualifies cannot be income derived during probationary periods and must accompany proof of employment such as letters, recent pay stubs, and notice of assessments or TI Generals.

Keep in mind as well that income requirements differ from product to product. Don’t hesitate to contact us for more information!

On the table above, select “not sure” if any of the following situations apply to you:

  • Much of your income is cash (for example commission or tips)
  • You are Self Employed business for yourself (BFS)
  • You are presently on employment insurance, maternity leave
  • Your total income before taxes is less than $50K a year

If you still have questions about your income status, give us a call!

Down Payment:


Currently, the minimum down payment required is only 5%, but at that rate you will also be on the hook for insurance premiums. If you are able to pay 20% or more you will not pay these premiums. First time home buyers should also note they must have a bit more than just bare minimum down payment for those rainy days. No one talks about it but is necessary.

On the table above, select “not sure” if any of the following situations apply to you:

  • You are not able to pay 5% down paument
  • A family member will be contributing part of your down payment (gifted down payment)
  • You have had money in your account for less than three months

If you have questions about your down payment, as always, give us a call!

Selections compiled will give you a good picture of where you stand and an estimation of your CID profile that will afford you a real advantage as a first time home buyer. Your decisions in this journey will affect you for life, so make them informed and put your best foot forward!

Go ahead and select the scenarios that best describe you.

Mortgage Tips for First Time Home Buyers

One of the most common mistakes first time home buyers make is to fixate on mortgage rates, which are nowhere near as important as is commonly thought. This misconception can be blamed on marketing campaigns created by banks and other financial institutions. Looking past the interest rate hype to the bigger picture is critical in maximizing prospects for all first time home buyers.

For example, a slight increase in mortgage rate has very little impact on your monthly payment – the difference in some cases of only a few dollars a month! You need to consider your entire CID profile and the proposed terms in your mortgage loan before making a decision. Additionally, interest rates can be fixed or variable. Currently (January 2016), 5 years fixed first mortgage rates are fluctuating between 2.54% and 2.69% depending on the type of mortgage, lender involved and most importantly the terms and conditions associated with these rates.

To find out more about specialty products that may benefit you, connect with us to book a Strategy Session today! We are committed to a quality future for all first home buyers.