Buying a home is one of the most exciting things in life. But it can be very expensive. Unless you have a pool of cash, you will have to acquire a mortgage to help you finance the purchase of a home. Applying for a mortgage from a bank can be very time-consuming and stressful, making private lenders such as private mortgage lenders in BC a better option.
Borrowing your mortgage from a private lender comes with plenty of benefits, including easy to qualify, faster application, and a shorter approval process. You can also choose to work with a mortgage broker in Vancouver to speed up your application.
But to get the most out of your private mortgage, there are plenty of things you need to do. Here are some great tips to help you get a mortgage from a private lender.
1. Decide What Type Of Loan You Want
First things first, when it comes to acquiring a mortgage loan, you need to decide which type of loan would suit your needs. There are various types of mortgage loans, including conventional mortgage or FHA loans. But conventional loans are the popular types of mortgage loans offered by both banks and alternative mortgage lenders.
In addition to that, you need to determine if you want a shorter-term or longer-term mortgage. Shorter mortgage loans of between 15 to 20 years allow you to pay off your loan faster and save money on interest charges. The main downside of such loans is that the monthly payments tend to be very high, affecting your cash flow.
2. Calculate How Much House You Can Afford
You must know how much house you can afford before you can get your mortgage. To estimate that, you can afford to purchase, use the 28/36 rule. This basically refers to the total amount of your gross monthly income that is allocated to paying debt each month. So, your DTI, which includes your mortgage expenses, should be below 28%.
Additionally, numerous expenses come with homeownership, including interest, property taxes, property taxes, and homeowners association fees. You need to factor in all these expenses when determining how much house you can afford to buy.
3. Get Your Paperwork Together
Now that your finances are in good shape and know how much you can borrow, you now need to get into real work. You need to gather all the paperwork needed. You will need to provide proof that shows that you are in a position to repay the loan. For these, you may have to provide documents such as pay slips, bank statements, tax returns, etc.
4. Shop Around For The Best Mortgage Rates
Now it is time to secure a loan. But don’t let the excitement of purchasing a house take control over you and make you jump into a contract too soon. Choosing the right B mortgage lender or mobile home mortgage lender requires extensive research and patience to ensure you are getting the best deal possible. Pay attention to any additional fees to your loan. These fees are usually rolled into your loan balance, meaning you pay interest on them on top of the principal.