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Buying a home can be an incredibly exciting time and is often one of our proudest purchases as adults. Unfortunately, buying a home is also often one of the most expensive times in our lives. With the average home in Regina being over $300,000, you will surely require a mortgage in Regina, as paying that in cash is simply unrealistic.
While everyone knows what a mortgage is, there are a variety of different intricacies and nuances that everyone should understand before they dive headfirst into the mortgage application process.
Click here to learn the difference between a mortgage term and an amortization.
How to Compare Mortgage Offers In Regina?
First of all, how do you go about comparing different mortgage offers from different lenders and providers? In your local area, there are likely dozens of different mortgage providers, each with their own pros and cons. The key to choosing the right one is to visit a variety of lenders and compare their offers.
Why do different lenders offer different mortgage rates? Find out here.
When comparing offers, you should first be sure to compare the interest rates. Your interest rate is perhaps the biggest indicator of the quality of the deal you’re getting, and how much you will end up spending on a mortgage. Even a 1% difference is massive in the world of mortgages in Regina, so be sure to do your homework.
But in addition to finding the best interest rate, you should also compare things like:
- Term length
- Prepayment options
- Is the mortgage open or closed?
- Is the rate fixed or variable?
- Payment options ( month, bi-weekly, or accelerated)
Of course, in addition to these factors, you should simply choose which mortgage company you feel the most comfortable dealing with. You will likely be dealing with this mortgage provider for decades, so be sure to choose a company or individual you can work with.
How to Save For a Down Payment
No matter how large the mortgage is, you will need to have a down payment. In Canada, the minimum down payment required for a home purchase is 5%. However, if you offer up a down payment of less than 20%, you will be on the hook for mortgage insurance, which can add a fair amount to the total amount you will repay.
Here’s how to get a down payment for a house in Canada.
As a result, it is incredibly important to save up for a down payment before considering entering into the home market. So how do you go about saving up for a large, multi-thousand dollar down payment? Well, there are a few things you can do. These include:
- Do automatic transfers every single month into an account strictly used for saving for the down payment
- Lower your expenses if you can, and sacrifice things like eating out or fancy clothes for a few months
- Reduce and/or eliminate your debt to lower payments each month
- Work more or find a way to earn extra money from selling items or finding a side hustle
- Take less (or no) vacations and if you do take them, make them fairly practical
- Cut out unnecessary expenses such as cable, expensive subscriptions, and substitute them with cheaper options if need be.
Really, any way you can save extra money to put toward your down payment without severely or negatively affecting the way you live is a great idea. So while you might be tempted to buy a home with only a 5% down payment, you should at least consider the time and sacrifice involved in saving up for a larger down payment. A larger down payment will save you money in the long run and also reduce the amount you are spending each month to pay off your mortgage in Regina.
Credit Score Required For a Mortgage in Regina
Now that you know how to save up for a down payment, what else do you need to think about before diving into the world of home ownership? Well, one thing, in particular, is to make sure your credit score is in check. In Canada, your credit score can range from 300 on a low end and all the way up to 900 on a high end.
So what sort of score do you need to be able to get a mortgage? In Regina and most of Canada, the credit score that is often required to get a mortgage is around 680. Any lower than that and you might struggle to find a loan from A-lenders, such as banks. Of course, if your score is higher, you shouldn’t have trouble at all.
If you have bad credit, you can either work for a while to bring it up or can consider bad credit options such as a cosigner, bridge loans or other options. In addition to credit, mortgage lenders will also look at things like your income, your employment history, and your credit report.
Wondering how to buy a house in Canada with bad credit? Click this link.
Helping You Secure a Mortgage in Regina
Interested in applying for a mortgage in Regina or simply want to learn about the best options for you? Loans Canada can help match you with the right options and the best lenders.