HOW TO PASS THE STRESS TEST FOR FIRST TIME HOME BUYER OTTAWA

The stress test has been imposed by the government of Canada to reduce the people falling into debt traps. Getting a first time home buyer mortgage in Ottawa is not easy, especially if you have bad credit or are self employed. This stress test for first time home buyers looking for a mortgage in Ottawa is pretty stringent. They need you to be up to date and financially secure within all aspects and make sure that you will be able to pay off your first time home buyer mortgage from Ottawa easily!

What is a stress test?

A stress test is basically a method to see if you could survive the rise in rates and would be able to keep up with mortgage payments even if you lose your income or get demoted. First time home buyer mortgages are a simple process since such borrowers do not have much debt to their name. But now-a-days it has become harder for people to obtain such a mortgage because of the stress test. It tests your financial stability and endurance under stressful situations to make sure you can pay off your mortgage easily.

How to pass a stress test?

First time home buyer mortgages in Ottawa require you to meet certain requirements.

Your credit history and debt to service ratio are supposed to be well maintained.
Your income and financial position come under heavy scrutiny and are put under real pressure to see if you and your financed will be able to make it through difficult times and make payments for your first time home buyer mortgage in Ottawa.
Ottawa rules are getting pretty strict and hence it is of utmost importance that you come prepared for a meeting with your lender for a first time home buyer mortgage!

Ottawa rules state that, for a first time home buyer mortgage, you require your credit score to be excellent to avail the benefits of a normal score mortgage plan. The rates are currently on the rise and hence you can be sure to qualify for a lesser amount than you had originally planned. If you have too much debt, you need to work hard to make sure it is reduced from your first time home buyer mortgage application in Ottawa. It is better to work on your finances before you apply for your first time home buyer mortgage from a lender in Ottawa!

If you have bad credit or are self employed, you can opt for a private lender. This can help you escape the stress test entirely. But if you want to apply for a traditional plan, you really need to bring your finances up to the mark. That is probably the only way to pass the stress test easily. You can always take help from your broker. They can help you access proper deals and maybe even the mortgage amount you need with a better plan. Ready your finances to match the stress test and you are good to go!

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5 BAD REASONS TO REFINANCE YOUR MORTGAGE IN OTTAWA

Mortgage refinancing in Ottawa seems like a great way to save money to most people. When the rates fall in the market, mortgage refinancing is the trend to catch up with in Ottawa! But a lot of people use the option in ways which can only affect them adversely. It is important to decide when mortgage refinancing in Ottawa could actually be a bad idea for you. We have to consider all our options and the total amount we would be spending and saving before we choose to refinance our mortgage plan.

Here are the top 5 worst reasons to do mortgage refinancing in Ottawa:

To invest:

Money flows out of our hands when we have it. Most of us do not have control over what we are spending on. Having an option from which we can get the funds we need whenever we need them, makes us irresponsible. Unless it is absolutely necessary, we should try not to spend money which we don’t have with mortgage refinancing in Ottawa. Money management is very important and increasing our debt is not going to help us save anything.

Longer term:

In Ottawa, mortgage refinancing done to get lower rates with a longer term is useless unless you start saving less time, mortgage refinancing in Ottawa in a longer time frame can actually harm you. Most of us just look at the rates and assume that if it is lower than the one we are paying, we tend to go for it! But if you are not getting any benefits such more mortgage time, then this is a bad financial decision!

To save up for a second home:

If you are planning to take up a new home and want to save for your down payment with the help of mortgage refinancing in Ottawa, it would be wise to look at all your options before doing so. This will not only extend the term of this loan, but also affect your credit score. You should make sure it goes with your financial goals.

Taking more cash out:

This is probably one of the worst reasons to refinance. It just keeps putting you back to square one and will not bring you any closer to the day when you would be debt free. This could harm you more than it can help you. It is a vicious cycle and people keep on borrowing with mortgage refinancing in Ottawa and end up in debt they can’t pay off. This could cause your financial situation to worsen and you could become bankrupt!

To switch your type of rate:

If you are considering mortgage refinancing in Ottawa for the sake of changing your rate type, then it is very important to consider how much you would be paying. The main aim of mortgage refinancing in Ottawa is to save money. If your new plan doesn’t help you to do that, then it’s a bad reason to change your current plan!

To know more about Mortgage refinancing you can contact our team : Platinum mortgage Ottawa