You — through the eyes of a mortgage lender

You’ve had to miss two hair appointments in a row. Mother Nature has given you the monthly bloats — early no less. And you discover that your new mascara has more clumps than bad oatmeal. It’s not a good day. But wait! At lunch, you run into an old high-school pal who tells you — what?! — your skin is glowing, you’ve lost all the baby fat, and wearing braces for all those years has given you a great smile. Bam! Your day suddenly starts to look up — way up. The lesson? We always think we look worse than we actually do — even when applying for a mortgage.

The right lender will be a good match for your situation, so that the mortgage you get meets your needs.

If you’re a newcomer to Canada, self-employed, work on commission or have a poor credit history, you may think your chances of qualifying for a mortgage or refinancing are slim to none. Think again. Just like finding the perfect body shaper to wear under a clingy show-every-bump dress, it is possible to find a way. The trick is seeing yourself through the eyes of a mortgage lender.

The 5 C’s of borrowing

Mortgage lenders look for certain characteristics in potential borrowers. Generally, they’re attracted by five key criteria:

• Capacity — whether your income is sufficient to repay the mortgage once all your other debts are factored in.
• Capital — whether the size of your down payment indicates a serious commitment to the property on your part, and sufficient minimization of risk on the part of the lender.
• Collateral — whether the property is of sufficient value and marketability to cover the amount borrowed.
• Character — your reputation and reliability, usually based on factors such as your education, employment history and residence.
• Credit — your history of meeting credit obligations, which is based on credit-bureau records for the past six years.

If your qualifications are less than stellar in any of these areas, a traditional lender may not accept you. But that doesn’t necessarily mean you can’t get a mortgage. Like we said before, it is possible! You just need to find the right match.

Bringing your best qualities to light

Many lenders may be perfectly willing to accept you as long as they view you as a reasonable credit risk overall. For example, if you are new to Canada, lenders may consider you based on the steady nature of your employment or the size of your down payment.

Likewise, if you are newly self-employed and can’t prove a regular income, the lender may instead look at your debt load, credit history and business plan. If these are all very positive, the fact that you don’t have an earnings history may not be so important.

And if your financial reputation is marred by a poor credit history, but you’ve have taken discernable steps to improve your rating and your debts are under control, your current income and down payment may be enough compensation.

Finding your perfect mortgage match

Each mortgage lender has its own particular requirements. Professional advice can go a long way in helping you find the right one. The right lender will be a good match for your situation, so that the mortgage you get meets your needs.

A financial professional can also help you put the steps in place so that you can make the most out of your best qualities and help you overcome mortgage hurdles — whether they’re real or perceived. Remember, you are most often your own worst critic. Let others see the good.

 

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