Self-employed Easy Steps To Getting A Mortgage

Thanks to the thousands of self-employed individuals, the Canadian
 economy is running quite well. Being self-employed comes with a number of great advantages: your schedule is your own, you answer to no one but yourself (and your customers), you're paid what you're really worth (NOT what an employer caps you at), and the sky's the limit for the profit potential of your business.

At the same time, though, being self-employed has some negatives, including the instability at least according to lenders - of your financial strength. Lenders often see self-employed entrepreneurs as a risk, and lending criteria often results in the self-employed being rejected for mortgage applications. Unlike those who are employed and are able to come up with regular pay-stubs showing their regular pay week after week, the self-employed are generally unable to produce such documentation. In fact, many times the tax information provided doesn't give an accurate indication of just how profitable a business really is, because income is reduced by all the write offs and expenses.

The Challenges of Getting Approved For a Traditional Mortgage

For this reason, getting a home loan can be a great challenge. This is especially true for those who approach a big bank. Such institutions generally have very strict requirements that borrowers must meet to get approved, including a pristine credit history.

Finding a Mortgage Lender

If you're a successfully self-employed individual who is looking to get approved for a mortgage, your best bet is to deal with an independent mortgage broker, like Kincaid Mortgages.
Kincaid Mortgages understands the challenges you may face getting approved for a mortgage because of your self-employed status. They make the process much simpler, finding the lender that meets your needs, with great rates and the terms and conditions that best suit your financial situation and future goals.They specialize in all sorts of hard-to-place mortgages, like those for the self-employed.

One of their professional brokers will sit down with you and get to know your specific financial situation. In addition to looking for a low rate, they will help you choose the terms that best suit for your current and future financial goals: Do you want flexibility to skip or double up payments? Are you better off with a fixed rate, variable rate or hybrid mortgage? Do you need a secured line of credit to go with your mortgage?

You fill out one mortgage application and they shop it across lenders throughout Canada, including ones that welcome the self-employed. They can save you thousands in interest all at no cost to you. They also do commercial mortgages for businesses.

by Samantha Stewart
articlesxpert.com

Mortgage Fees: Your Complete Summary

Most people focus on the current mortgage interest rates when shopping for a home loan. Interest rates are certainly important, but they do not represent the only significant expense associated with financing a home. When you are making plans to purchase a new home, it is important to consider the big picture of all the fees associated with getting a mortgage, rather than focusing solely on interest rates.

Before you can decide just how much house you can afford to purchase, you need to look at an overall summary of mortgage fees so that you will have a clear understanding of all the expenses involved. Many factors can impact the total amount of money you need to borrow, as well as the final out-of-pocket requirement for your monthly payment.

Down Payment

Most home buyers will be required to make a down payment in order to be considered for mortgage loan approval. The amount of money an individual is required to put down may vary significantly based on a variety of factors, including: the cost of the home, the applicant's credit history, the borrower's qualification for down payment assistance programs, and many other variables. Typically, home buyers are required to make down payments ranging from five to 20 percent of the home's purchase price.

Prepaid Interest

The day you close on your home loan, you will be required to pay the interest that will accrue on the loan between the current time and the day the first monthly payment is due. Prepaying interest allows you to exert some degree of control over the due date for your monthly payments. Many people are able to include the initial prepaid interest in the total amount financed, which keeps them from having to pay this amount out of pocket at the closing table.

Keep in mind that the longer you put off your first payment, the more prepaid interest you will have to pay at the time of closing. It makes sense to utilize prepaid interest to make sure that your payment due date is convenient to your income schedule, but there is no benefit to postponing the first payment simply because you are allowed to do so.

Homeowners Insurance

When you finance a home, the premium for your first year of homeowners’ insurance coverage is due at the closing table. No mortgage company will allow a sales transaction to take place without being certain that insurance coverage is in effect the moment the title transfers into the mortgagee's name. As with prepaid interest, many home buyers who are able to do so elect to include their initial homeowners insurance premiums in the total amount financed.

Escrow Account


As long as you have a mortgage on your home, your lender is likely to require you to make escrow payments toward your property taxes and homeowners insurance premiums. This money goes into an escrow account, which the lender uses to make sure these important expenses are paid when they are due. Requiring escrow accounts protects the lender, who has a vested interest in making sure the property is sufficiently insured and remains free of tax liens.

Title Insurance

One of the most important components of a home loan transaction is the process of verifying that the seller has the legal right to transfer title of the home to the buyer. In addition to verifying that the title of the home is clear prior to closing, it is advisable to protect the home from future title problems tied the actions of past owners with a title insurance policy.

Sellers are typically responsible for paying for title research, since this work is required to verify that they do in fact own the property and have a legal right to transfer it to the buyer. Homebuyers, however, usually pay for the accompanying title insurance policies, which protect them against potential prior claims to the home's title that might surface once the transaction has been completed. Mortgage lenders typically require title insurance policies as a condition of closing.

Other Closing Costs

A number of additional expenses must be considered in any comprehensive summary of mortgage fees. For example, when title to a property is transferred, a warranty deed must be created, and the changes to the title of the property must be recorded. Additionally, most lenders require property appraisals, surveys, and termite inspections prior to approving a loan. The fees associated with these legal and real estate services are part of the closing costs for a home loan. They can be paid for by the buyer or seller, based on the terms agreed upon in the purchase agreement.