Why work with a Mortgage Broker?
The most important reason for using a mortgage broker is that they are experts in their field. They represent you with the bank or lender and try to get you the maximum mortgage loan amount at the best possible rates of interest. They are associated with multiple banks, credit unions and financial institutions offering mortgage loans. They will find a mortgage lender to offer you a loan based on your financial situation. When you are buying a property, you don’t even pay the mortgage broker any fees for their services. They save you time both for researching a suitable mortgage lender as well as guiding you on the process.
Have poor credit - is a Mortgage still Possible?
Most banks and financial institutions prefer customers with good credit. This doesn’t mean people with less than perfect credit cannot find mortgage financing. The most important factor which influences the banks and lenders is a good and steady income source. They want to ensure the repayment of mortgage loan installment is made on time. Some lenders will require you to put a bigger down payment. For borrowers with a low credit score, the amount of down payment could be 20% or higher of the total loan amount as compared to 5% or 10% for borrowers with good credit. In addition, the borrower may require a co-signor with a good credit score and someone with a solid repayment history.
What is Default Insurance?
Default insurance, also known as mortgage insurance, is the most favoured option for people who are unable to afford a large down payment but dream to buy a house. Default insurance not only helps people achieve their dream of owning a home but also protects the lenders in case the borrower fails to repay the loan. This insurance is mandatory for home buyers who put less than 20% down payment. It is important to note this insurance will not protect the borrower if the borrower dies – this is mortgage life insurance. Default insurance is available for homes valued under one million. The premium depends on the amount borrowed, along with employment details, type of property and the cost of the home.