Applying for a mortgage can be a worrying time for those looking to get onto the property ladder. There are countless myths about getting a mortgage in Canada – let’s look some of those myths and the truth behind them.
Myth – You need a down payment of at least 25% to be accepted for a mortgage.
Truth – Although a larger down payment never hurts, these days, there is a little more leeway. There are high-ratio mortgages that are available with a down payment of as little as 5%.
Myth – With a bad credit history, you’ll never be accepted for a mortgage.
Truth – Having a chequered financial history may not be the ideal situation when looking to secure a mortgage, but it does not preclude you from being accepted. 18 months of good credit will enable you to get back into the market for a home loan. Even if you have previously been declared bankrupt, if you can maintain good credit for two years post-discharge, you can be accepted for a mortgage.
Myth – Self-employed people cannot get a mortgage.
Truth – In the past, self-employed people did struggle to get onto the property ladder, however this is no longer the case. Find a good mortgage broker who can assist in choosing a lender that offers products to those who work for themselves. As long as you have a good credit history, pay your taxes on time and have been self-employed for over three years, you are likely to be accepted.
Myth – Down payments cannot be a loan.
Truth – You can borrow a sum of money from a relative in the form of a “gift” to use as your down payment. Some lenders will also consider accepting you if you take out a loan for your 5% deposit.
For more information about mortgages, contact the experts at Sky Financial – The Mortgage Centre.