Renew your Mortgage with Ottawa Mortgage Broker: Capital Mortgages

Shopping For A Mortgage In 4 Easy Steps

Purchasing a house is one of life’s most exciting experiences. It is a major life change and one of the most important financial decisions you will ever make. However, a dream home can suddenly turn into a nightmare experience if you are not sure which steps to take. Finding the right home does not have to be a hassle and our “shopping for a mortgage in 4 easy steps” will show you what to do so that you can avoid major headaches.

First Step – Selecting the Right Loan

How long do you plan to live in your new house? If change is in the future (baby or possible job transfer), you might want to think short term, an adjustable rate mortgage will give you the lowest payments for a few years. However, if you plan to be in the new home for decades, go with a fixed rate interest loan. This way, your payment will not drastically increase without warning.

Second Step – Go with a Mortgage Professional

A mortgage broker can be one of your best friends when it comes to buying a home. Choose someone with knowledge and experience with mortgages, and check with more than one source before making up your mind. Select a person you can easily communicate with.

Third Step – Understand Your Loan Costs

Before you sign any loan papers make sure to go over all your costs and understand things like fees, points, and insurance. You’ll want to check with two sources:

* Good faith estimate – lists all closing costs including fees. Just remember, this is just an estimate, and some items may be subject to change.

* Truth in mortgage documents – this document tells you what your annual percentage rate will be and discloses important information about your loan terms. This is the best way to ensure you are not hit with some unexpected fees which increase your costs significantly.

Fourth Step – Know How Interest Rates Move

Loan interest rates are affected by the bond market. This information is vital to understanding your mortgage. Mortgages are sold, and when this happens, interest rates and bond rates are affected differently. When one goes up, the other goes down. This movement can be as often as two times a day. Your mortgage broker is the best person to talk to about how this works.

As you can see, it is as simple as 1-2-3-4. These four steps will help to simplify your home buying process and make life a little easier.


Renew your Mortgage with Ottawa Mortgage Broker: Capital Mortgages

How To Read Your Credit Report

If you want to be creditworthy and stay that way, you need to monitor your credit history. To simplify the process here is important info on how to read your credit report.

You should monitor credit reports twice a year, for best results. This will help minimize errors and fraudulent activities. You may obtain reports from Transunion, Experian, and Equifax. These are the three major reporting agencies, and they will give you a good idea of overall creditworthiness.

Remember these reports may not all be the same so you’ll need to read them carefully. However, you should be familiar with specific terms to understand better the information in the reports. These are some terms you need to be familiar with:

* Creditor – the company you got the loan or credit card with.

* Account numbers – you may not be able to see complete account numbers on the reports. In fact, many may show just the last four digits. This is an important security feature which helps to keep personal information from being intercepted.

* Reported – the date the bureau received the info from the creditor.

* Last active – this date reflects the last time you made any payments or purchases on the account. This is usually the same as the “reported” date. However, it will also show when you closed an account and if it was reactivated.

* Opened – the date you opened up the account or took out the loan.

* Limit/highest credit – limit is the total amount a loan cannot exceed without penalties. Highest credit denotes the most you owed at one time.

* Past due amount – this shows if you currently are behind in payments, and by how much.

* Payment/Terms amount – tells what your monthly payments are and the length of the loan. For example, you might have a car loan payment of $350 for 5 years.

* No. Of months revolving – reports how long since you first opened the account. Also, denotes late payments and how late they were made (30, 60, 90 days).

At the end of the report, you may see important info like bankruptcies, liens, and foreclosures. It may also mention how many times reports were requested by you and if you have aliases.

Your credit report should also include creditor and reporting agency contact info at the end of the document. If you notice any errors, you have a right to contact the agency to have them corrected and to dispute inaccurate information.