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👉🏡 10 Common Mortgage Myths - Part 1!

October 16, 2020

10 Common Mortgage Myths You Should Know! (Part 1)

Hi , This month, I wanted to go over 5 of the most common myths we hear about mortgages and I'm sure you also hear from your clients as well.1. I MUST BE A FIRST-TIME BUYER TO PUT LESS THAN 20%

This is simply not true. If you qualify, you can buy a second home for less than 20% down. This second property must be a vacation home. You could also achieve this by renting your current home and moving to the second property.

2. YOU CAN'T HAVE TWO PROPERTIES WITH LESS THAN 20% DOWNTying into #2, as long as you rent the current property, you can put less than 20% down on the second. You can use the rental income to help you qualify for that second home.

3. YOU HAVE TO HAVE TWO YEARS OF TAX FILINGS TO GET APPROVED IF YOU ARE SELF-EMPLOYED.This is false. Just this past month, we have helped clients who have only been in business for 6 months by using an alternative lender @ an interest rate of 2.99%.

example: We helped a client who worked for a software company for 9 years. He just became a contractor for that said company and is now running the income through his personal business. He had only been in business for 5 months and we were still able to help him.

4. YOU CAN'T GET A MORTGAGE ON BARE LAND

You can get a mortgage on bare land. The qualification process is the same. If unserviced, you typically need 50% down. If you are planning to build a house on the property you can get away with as little as 25% down. Servicing includes water, power, sewer, or anything you would need to build a house.

5. DEPOSIT IS THE SAME AS THE DOWNPAYMENT

What is a deposit? This is what you place when you have a seller who has accepted and wants to move forward. The deposit helps form the downpayment. A deposit gets held in a real estate trust account and is then wired to the lawyer. When you meet the lawyer, you bring the remainder in the form of a bank draft. They use that plus mortgage money to buy a property. What commonly happens when someone is selling and buying a home is we offer a deposit loan against the equity of your property.

If you have any clients you believe this would benefit, I would highly recommend contacting them with this opportunity and running some high-level numbers to give them an idea of how much they can save by upgrading their property. Alternatively, if you need any help crunching numbers, I am more than happy to assist you!Thanks for reading, I welcome your feedback and questions and most importantly the opportunity to help your clients. Best regards,Varshan Thavarajah Mortgage Broker & Partner | MBL # M1600275Banyan Mortgage Group | FSRA #10530647-404-8812

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