What is a Personal Mortgage?
It is a loan … a big loan mind you, but it’s still a loan!
It can be used for financing a home or have one built
It can be used to consolidate a debt, to clean up your finances for example a 2nd personal mortgage
It can be used for financing renovations on your existing property
It can be used to purchase other investments or property
The one thing that all of the above have in common, is a property the bank can hold as security on the personal loan.
1st Step: You must decide that you are going to purchase a home. No more paying rent!
2nd Step: Before you apply for a personal mortgage send for your personal credit report. If there is something on your credit report that you wish to dispute and you have written proof, do it right away. Once that has been cleared up; the Credit Bureau must notify anyone who has run a credit check on you in the last few months. They must state that it was an error on your account and has been corrected. (This is required under provincial law) If there is something on your personal credit report that you know to be false, but you do not have documentation to prove it, you must give the Credit Bureau all the facts and ask for an investigation. If your statements are confirmed, your record will again be corrected and all parties who have run a credit check on you will be notified of the change. If there is something there that you know is wrong, but you can not prove it, and the investigation has been unable to make a ruling, check with your local Credit Bureau about your rights and where you can go from there. Each province has different legislation for Credit Bureaus. When your personal credit is good; a bank, credit union or trust company will fight to hold your personal mortgage! When your credit is not so good, be prepared to need a higher down payment or pay higher interest. When your personal credit is in trouble, start your savings for a down payment, make sure you pay all of your bills same day, get a personal credit card and pay your account on time every time: this will help fix the problem sooner.
Credit quality and debt-to-income-ratio affect the terms of your personal loan. If you have good credit and your paycheque far surpasses your monthly debt, you will get approved at a lower interest rate. However, if your monthly finances barely cover your minimum debt obligations, even if you have a good credit report, you will not receive the lowest available interest rate. (For more information on your personal Credit Rating, please contact your local Credit Bureau today, they are listed in the yellow pages of your phone book or you can search the internet for their website.)
3rd Step: Look at your money. Talk with your bank, credit union, your financial advisor, and your friends (those with personal mortgages). Make sure you can afford to take this step, and find out how much you will get approved for.
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