Five repeated mistakes with getting a mortgage

Mike and Lori were a young couple in love buying a new home as first time homebuyers. What could go wrong? On the surface, nothing. But this couple son got married and had children. In fact, they had four beautiful kids.

Lori also decided to go back to school to upgrade her skills. Barely sleeping well taken care of the family and studying she finally graduated.

What impressed me was how nice this couple was. What disturbed me was when we originally met, could I have taught them better? In fact, four years ago we changed how we prepare our clients. My career satisfaction has skyrocketed in helping clients better prepare for financial life when getting feedback on their successes. Today we will share on how Canadians can improve their life and their mortgage experience.

1. Having a life and a mortgage

As Canadians we put so much thought as to our vacation and purchasing a car. However, when we buy our homes we seem to forget our hopes and dreams.

Although turning a new chapter in your life with a home chapter is exciting, we should not be missing the wonderful things in life. Ensure you can still enjoy your loves whether it be traveling, sports, theater, shopping or whatever your passion may be. If you are in a relationship, the idea of children should be discussed. The bottom lines: think, discuss, plan.

2. Paying the most important people first: yourselves

In general, this is the biggest mistake I find mortgages make, a repair, necessity or emergency comes up and they are not prepared. They must turn to credit to survive, usually in the form of credit cards at 18%. The greatest have it we can do for ourselves is save a portion of their salary for a rainy day in a separate account. As clients are instructed inOur mortgage lessons before buying, nothing goes wrong when you save.

3. Ensuring your documents are as you stated them

Clients mean well but at times correct communication is vital to ensure affordability and a good rate. Some examples may include:

• Probationary work
• Contract work
• Self-employed clients telling you gross income and not net income
• Using overtime when only in the job one year

A professional mortgage broker also has the responsibility to ensure he nails down the correct questions.

4. Only saving for a down payment

Many Canadians realize the minimum down payment is 5% of the purchase price. Well they are technically correct. However, as we all know it is not that easy:

• Legal fees
• Move-in costs
• Furniture
• Renovations
• Surprises to the home

When purchasing a home, plan for everything. Many clients have to apply for credit and start the first few years in debt. Plan ahead.

5. Assume all mortgages have no differences

It is easy to believe all the mortgages are the same, but homebuyers need to understand the differences so they can match the loan to meet their needs. Every borrower situation is different and not every borrower qualifies for every loan. A client and a professional broker should have a candid conversation to discuss their goals, their lifestyle, their future and their ability to manage risk.