Thursday, January 5, 2012

Choose the Right Lender for Your Brantford Real Estate Loan!

While the overall climate of the Brantford real estate market is healthy and strong, many people who are looking to buy a home or invest in real estate are having trouble obtaining financing. This is a discouraging factor for many who are looking to break in to the local market. Whether it’s through buying a Brantford home or investing in a new multi-family complex in the area, both homebuyers and investors alike are fearful to strike now because lending restrictions have gotten tighter. As an experienced Brantford real estate agent, I feel that it’s important to inform my clients about the lending process and let them know why their loan application could potentially be declined.

The primary factor that is important to recognize is that not all lenders are the same. Different lenders have varying criteria that they look for on each loan application, and a number of different factors can affect whether or not they give somebody a loan. The key to obtaining financing successfully is to do your research on each lender and find out which one looks for criteria that best matches your situation. From there, you can approach that lender and obtain the loan you need for your Brantford property.

Here are seven factors that could vary by lender. Use these factors as a starting point for your research. Remember, the more you know, the more success you’ll have in getting a loan!

Geography. If you’re looking to buy a home or invest in a property in an area where property value fluctuates or the local economy is in a downturn, then some lenders may not be as willing to give you a loan. Find a lender that doesn’t make this a priority or fine-tune your property search to areas that have been seeing more prosperity and growth in the economy and stability in property prices.

Property type. Some lenders are better for investors looking to buy multi-family and rental properties, and others are better for those looking to buy a new home. It’s important to go to the lender that will be most open to giving financing for the type of property you’re looking to buy. This is a matter in which you will have to be sure to do your research!

Number of rental properties. If you’re an investor who needs financing on more than two rental properties, then you’ll need to be careful! Some lenders make two their maximum per individual and some go as high as five. Some may not even have a limit! It’s important to consult your Brantford real estate agent about which lenders will give financing for the number of properties you’re looking to invest in.

Qualification ratios. Each lender will have specific criteria about what makes for a strong loan application. Some accept higher debt load to income levels and others care more about the potential of the property values than the actual applicant. This is another instance in which you’ll need to do your research; if you can find the lender that will prioritize your strengths, then you’re more likely to get financing!

Product offering. Make sure you ask what sort of client segment each lender focuses on. For some lenders, their focus tends to go towards clients that are self-employed or have difficult credit, and others may cater to people in a different scenario. It’s important to know which products each lender offers for your particular financial situation before you approach them for a loan.

Rental income. If you’re an investor who is looking to buy a rental property, then many lenders will look at rental income and factor that in to whether or not they should give you a loan. What varies by lender is the percentage of rental income that they will use for evaluation. Usually, lenders factor in between 50-80% of a rental income in a loan application and consider it extra income or rental expenses. Know what percentage you want each lender to consider ahead of time and use that number to find the right lender.

Financing structure. Are you looking to invest under a corporate structure or independently? Different lenders prefer different forms of financing, so it’s important to make sure that you approach a lender that is most willing to work with your finance plan.

When it comes to picking a lender, using these seven factors to make your decision will serve you much better than simply picking the people who have the lowest interest rates. In order to complete a transaction successfully in the Brantford real estate market, it is important to look out for your best interest and make sure you are working with people who are the most experienced in dealing with your particular situation.

As a Brantford real estate agent, I have many years of experience that have allowed me to work with several different kinds of clients. If you have any questions about what it takes to obtain financing, don’t hesitate to contact me! I’d be happy to help you in any way I can. I hope to hear from you soon!


Wally Dufrat | Sales Representative
RE/MAX Twin City Realty, Inc. Brokerage
515 Park Road North | Brantford, ON N3R 7K8
Direct:  (519) 752-5400 & (877) 759-5900 | Cell: (519) 761-7400 | Fax: 519-752-3400

Before You Buy or Sell Your Next Home, Visit My Websites at:
www.BrantofordHomeInfo.com or www.FreeBrantfordHomeInfo.com for FREE Information!
 
 

1 comment:

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