Getting A Mortgage – Sometimes It’s Better To Wait

I met with a young couple recently who desperately wanted to purchase a home and enquired about getting a mortgage. After doing my due diligence with them and checking the 3 main criteria needed when getting a mortgage:

• Income
• Down payment
• Credit

2 Out Of 3 Ain’t Bad

After discussing with them I quickly realized that they had 2 of the 3 criteria. They had the down payment saved up (in the form of RRSPs which we could use since they were first time home buyers) and they had good credit. The problem was that one of them was on contract and had only been on contract for 9 months. So we couldn’t use that income to qualify. What made matter worse was that they had some unsecured debt (credit cards) that also reduced their usable income.

Let Cooler Heads Prevail

When I explained that they were missing one key ingredient, I told them that they should wait until the contract renewed and had more history. They brought up ideas such as using a B lender or a private lender. I could not in good conscience do that to them because that would mean paying lender fees that would chew away at their hard earned savings, not to mention stressing their finances due to the high rate. Thankfully, cooler heads prevailed and they decided to pay down their debt for the next 7 months thereby also increasing their credit scores. I am so glad that they made this decision because they will save tens of thousands of dollars and likely qualify for an amazing rate if they just hold out for a little while longer.

Robert Floris is a Mortgage Broker. His office is located at 651 Fennell Avenue East in Hamilton, Ontario. If you would like to speak with Robert, he can be reached at 905-574-9200 #215. Alternatively, you can contact Robert here.

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