Busted! Don’t Believe These Mortgage Myths!

Author: Anita Mortgage | | Categories: Alternative Lending , Bank Of Canada , Benchmark Rate , Best Mortgage Rates , Commercial Lending , Home Equity Line Of Credit , Interest Rates , Mortgage Approval , Mortgage Pre Approval , Mortgage Refinance , Mortgage Renewal , Mortgages , Private Lending

Mortgage Approval Alberta

When myths about obtaining mortgages get passed along, many believe it to be the sole truth. However, misleading information can often affect your mortgage application and may even hinder your chance at homeownership. To separate fact from fiction and ensure a smooth home purchase, Anita Mortgage Team has debunked three of the most widely believed myths about mortgages.

Myth 1: Prime lending is the best option for a self-employed borrower.
This is far from the truth. In fact, getting a mortgage through a prime lender can be more costly. A prime lender will want to use an average of your last two years of taxable income. Therefore, you will have to increase your income in order to qualify for the mortgage you want. This will mean paying a lot more income tax. If your mortgage broker gets your mortgage through an alternative lender instead, the interest rate will be higher; however, at the end of the year, you will have less interest than you would have paid to the government with the increased income.

Myth 2: A pre-qualification and a pre-approval is the same thing.
You can get a pre-qualification from your financial institution by answering a few simple questions in person or online. However, this does not mean that the lender will be willing to give you a mortgage. When a mortgage broker gives you a pre-approval, they should collect all the documents upfront, especially down payment and income documentation. Your mortgage broker will need to know that they can provide the proper documents to prove your income and down payment. You may believe you make $100,000 per year, but on paper, you only make $60,000. Your mortgage broker may even run your file by a lender if there is anything questionable.

Myth 3: If your bank says ‘NO’, you cannot get a mortgage.
Your bank only has access to their mortgage products and in order to get a mortgage, you have to fit within their guidelines. A mortgage broker has many more options available to them. They have access to major banks, credit unions, monoline prime lenders, alternative lenders, and private lenders. Mortgage brokers will typically be able to find a solution for every client. Then it is up to the client to decide if they would like to continue or wait until their situation has changed.

If you’re looking to steer clear of myths like these, reach out to Anita Mortgage Team.  We are a team of mortgage professionals in Airdrie, Alberta, that offer purchase mortgages, mortgage renewals, mortgage refinance, and home equity loan services. For more information about our services, please click here. If you have any questions about mortgages or to book an appointment with us, please contact us here