In this short article, we’re going to talk about how you can transition to a mortgage with a financial institution by using a mortgage broker.
Unless you understand the financial markets and the mortgage markets well, it can be difficult to choose a mortgage that’s right for you. This gets more complicated if your credit score isn’t perfect, or if you don’t have a credit score at all!
Fortunately, a mortgage broker is going to employ people who specifically understand these markets and work with them every day, meaning they’re extremely experienced in making these decisions.
Financial institutions, banks and the like, are less likely to lend money to someone who has no history of repaying loans, or if the history is chequered with missed or late repayments.
There are private lenders who are more likely and able to lend money to those who banks say “no” to.
What is an independent Mortgage Broker?
An independent mortgage broker isn’t attached to one specific financial institution. He can offer a range of services to prospective borrowers, and the biggest benefit is that they can tailor the experience to every individual.
How Can a Mortgage Broker Help Improve Credit Scores?
As we mentioned, a missing credit score is as ‘bad’ as a bad credit history to many banks. This is because they will only offer loans to people, they know won’t lose them money. They only do this if they know, as certainly as possible, that you can repay that loan.
A mortgage broker, on the other hand will assist you to find a private lender, who is much more flexible on working with you to ensure that if you want to free up your home’s equity for a new project, you’re able to do so.
If you bought a home worth $250,000 and you’ve paid back $150,000 already, the equity in that property is $100,000. This means that the maximum loan you can take out as a second mortgage would be $100,000.
An injection of capital like this could mean that you are able to build that extension on the house, refurbish your kitchen and the new baby’s room, or make any other large purchase you may need.
When you agree to take on a second mortgage on your property, you’re saying to financial institutions that you are able to handle more credit. This is especially important when you are not currently using any credit at all.
By using the services of a mortgage broker, you can build up your ‘reputation’ with the banks, so that if you wanted to, you would be able to take out a loan through them at a later date.
And remember, it’s all about that reputation to these institutions. You are just a number to them, but working with a mortgage broker will allow you to create a personal relationship and have them understand your unique needs.
If you are looking for a great professional expert to help you with any mortgage or house loan needs, visit EasyHouseLoan.ca today!