Author: Kachet Team

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Rent to Own

How to Budget for Your First Home

Everyone knows a great rule of thumb when buying a home: Don’t buy a home that costs more than you can afford. But what is “affordable” will vary from buyer to buyer. As of December 2020, the median sales price for a new home was nearly $ 355,900, which means that some people will pay a lot more and others a lot less. However, discovering the sweet spot of affordability requires more than obtaining a pre-approval letter from a mortgage lender. 

The 28% Rule Can Get You Started

One of the easiest ways to budget for a home purchase is with the 28% rule, which dictates that your mortgage should not exceed 28% of your gross income monthly. Mortgage lenders look at a potential borrower’s debt-to-income ratio when deciding whether to lend money, let’s say your monthly mortgage payment is $ 1,000 per month, and your other expenses are $ 1,000. So, your total monthly financial obligations are $ 2,000. Let’s say you have a gross monthly income of $ 6,000. That means your debt-to-income ratio is 33%.

Housing Costs Beyond the Mortgage 

Pre-approval of a home loan is an important first step in buying a home, but it is only a consideration. A mortgage isn’t the only recurring expense – home ownership comes with many other ongoing costs that buyers can expect. This includes home insurance, ancillary costs, repairs, and maintenance costs. Maintenance can only add up: mowing the lawn, shoveling snow and raking leaves. Buyers should also consider property tax. 

These expenses can significantly increase your monthly expenses and make a home that seems affordable on paper really expensive. So, you need to consider all of these costs, as well as other regular expenses when determining how much housing you can afford. Your journey from rent to own homes province is made easier with us because we help you identify your budget.

Choose Property that you can Manage 

When considering a home’s affordability, first-time buyers should consider the property’s condition and size. Because big isn’t always good, especially when heating and cooling are beyond budget. A quaint home on a scenic hillside might be a dream come true, but cleaning up that long, steep driveway during the winter months could be an expensive nightmare. You could also find that 3,000-square-foot top fix that seems super cheap until you find out you need to renovate every room in the house.

Check the utility bills for the property you are considering and ask a home builder to estimate the cost of repairs, if any. If you plan to do it primarily yourself, be realistic about what you can handle, both in terms of capacity and time.

Conclusion 

Homeownership can quickly turn into a nightmare if they miscalculate their purchase. First-time buyers, in particular, have many desires, often more than they can actually handle. They must ensure that the home they are buying is affordable by considering more than just the monthly mortgage payment. Without some foresight, they can be huge but without cash, leading to all kinds of financial problems. Take the time to enjoy your dream before signing it and shake hands with us to identify your budget for your dream journey!!

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Categories
Mortgage

Taking a Mortgage: 4 Ways to Improve Your Chances

Buying a home is probably the biggest investment you will ever make, and if you are like most people, you will need a mortgage, in order to make this possible. While there are no promises that you will be approved for the loan you desire, there are several steps you may take to increase your chances of getting approved. Continue reading for tips on how to increase your chances of acquiring a mortgage.

  1. Check Your Credit Report

Lenders will check your credit report, a detailed report of your credit worthiness, to determine if you qualify for a loan and at what rate of interest. You can monitor your credit report throughout the year.

  • Correct Any Errors 

Once you have your credit report, don’t assume everything is correct. Take a close look to see if there are any errors that could negatively affect your creditworthiness. You should watch out for:

  • Debt already paid
  • Information that is not owned by you due to an error (for example, the creditor has it due to          similar names and / or addresses or due to an insurance number social security information) 
  • Information that does not belong to you due to identity theft
  • Information about a former spouse that should no longer be there
  • Outdated information
  • Incorrect entry for closed accounts

It’s a good idea to check your credit report at least six months before applying for a mortgage so you can see and remedy any inaccuracies. If you discover an error on your credit report, contact the credit reporting agency as soon as possible to correct the error and file a complaint. 

  • Improve Your Credit Score

Although a credit report summarizes your history of paying debts and other bills, your credit score is the only number that any lender will use to assess your credit risk and determine how likely you are to make payments.

In general, the higher your credit rating, the better the mortgage rate you can get. So, it’s worth doing everything you can to get the highest possible score. First, check your credit report and correct any mistakes, then work on paying off debts, set payment reminders so you can pay your bills on time, keep your credit card and revolving balances low, and reduce the amount of your debt (e. g. your credit cards). If you happen to be in Canada and possess a bad credit score or wish to opt for zero down payment mortgage Canada, the possibility persists but such possibilities are rare. 

  • Reduce Your Debt-to-Income Ratio 

A debt-to-income ratio compares the amount of your debt to your total income. It is determined as a percentage by dividing your entire monthly recurring debt by your gross monthly income. Lenders look at your debt-to-income ratio to measure your ability to manage the payments you make each month and determine the amount of housing you can afford.

There are two things you can do to lower your debt-to-income ratio, both easier said than done:

  • Reduce your monthly recurring debt.
  • Increase your gross monthly income.

To lower your monthly recurring debt, the most crucial thing you can do is to buy less. Take a close look at where your money goes each month, find out where you can save, and put it to use. 

While there is no easy way to increase your income, you can try to find a second job, work overtime at your main job, take on more responsibilities at work (and get a raise), or complete courses / licenses to increase your skills, marketability and earning potential. If you are married, you can increase your household income by having your spouse do additional work, or return to work if one of you has stayed home. 

The Bottom Line

Tighter lending practices have made it difficult to obtain a mortgage. The good news is that there are several steps you can take to improve your chances of getting a loan, especially if you start early. Begin by reviewing your credit report and correcting any errors, then work to improve your credit score, lower your debt-to-income ratio, and actively save for your down payment. If you want to secure a mortgage in Ontario, Toronto, or any other city in Canada, shake hands with Kachet, which offers a unique step-by-step system to assist you in obtaining the best loan.

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Categories
Rent to Own

When Is The Best Opportunity To Refinance Your Car Loan

The best time to refinance your car loan is when it can save you money in the long term, but other factors should be considered. Here’s a list of some situations where we recommend considering an auto car loan refinance: 

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Categories
Bad credit

5 Steps to Get a Mortgage with Bad Credit

Mortgages are one of the most common ways to finance a home. A bad credit mortgage in Ontario can make it challenging for some people to get approved for a mortgage because lenders want borrowers with good credit scores to ensure they can pay back their loans. This is why it’s important that you know your options and what steps you need to take to successfully apply for a mortgage with bad credit. Here are the five things that you should know about getting a mortgage with bad credit.

1) You can still get approved for mortgages with bad credit

There is a common misconception that people with bad credit can’t get approved for mortgages. As long as you have a higher income and a lower level of debt compared to other applicants, you should be able to get approved for a mortgage. However, while your odds of being declined are greater if you have a poor credit history, there are still some lenders who will consider lending to borrowers with poor credit.

2) Self-employed mortgages require careful consideration

A major part of the assessment for applying for a mortgage is verifying that you can afford to make the monthly payments. Lenders don’t like to see self-employed borrowers because they are seen as more of a risk. Lenders want to ensure that they will get their money back, so lenders need to verify your income and run credit checks on you before approving you for the loan. If you are trying to get approved for a mortgage with bad credit and you’re self-employed, you must be prepared to answer questions about your income before you apply.

3) Documentation is another factor when applying for mortgages with bad credit

The lenders will need documents to verify your income, which can be challenging when you have bad credit. Most lenders will want to see the last three years of tax returns, and if you’ve been self-employed for a while, it can be difficult to get the lenders to accept your documents. As well, lenders need to assess how much they will give you, and this is where documentation comes in because you will need proof of income before the lender will approve the loan.

4) You may be able to obtain a second mortgage on your home

When applying for a bad credit mortgage in Ontario, you may be surprised to discover that some companies and online lenders will allow you to obtain a second mortgage on your home if you need additional money. However, these loans can come with high interest rates, so it’s important to look at all of your options before choosing to take on a second mortgage. It’s also important to note that it can be more challenging to get approved for a second mortgage if you already have a first mortgage.

5) Consider getting help from your bank

Many people with bad credit are reluctant to turn to their banks for help because they may not want to alarm them about their situation. However, banks are in the business of lending money, and they will likely be able to find a solution that works for you. Many people with bad credit have been able to get approved for mortgages if their bank conducts a manual review instead of using an automated system for assessing creditworthiness.

If your goal is to secure a mortgage so you can purchase a new home, you are not alone. Many people have bad credit for one reason or another, and there are options available to help them achieve their goal of homeownership. Just make sure that your credit is in good standing before applying for a loan because this will give you the best chance of being approved.

Stop procrastinating and apply for a mortgage with bad credit today. For more information about how you can get approved for a mortgage with bad credit, you can fill out the form here to speak to one of our agents, who can help you explore your options.

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Bad credit

Four Tips That Will Get You a Loan Even with a Bad Credit Score

If you have bad credit, getting a mortgage can seem like an impossible task. But it doesn’t have to be! There are plenty of ways to get on the property ladder, even if your credit score isn’t perfect. But, before you make any decision, we always advise you to re-check your credit score. You never know what might have changed those numbers, right? If your problem still has no solution, then here are four tips for getting a mortgage with bad credit:  

Improvising the Credit Score

A higher credit score is advantageous because it helps you ensure a lower mortgage rate, which results in cheaper monthly payments. If your current FICO rating isn’t high enough to qualify for an expensive loan from one of the big banks (referred to as ”A lenders”), then don’t give up hope just yet! You may want to use some time fixing this critical aspect before applying again—and hopefully, get approved faster next time around too. 

Here are a few tips that can help you improve your credit score over time:

  • Paying all your bills on time may be a great help
  • Ensure to keep your expenditure under the credit limit
  • Never try to apply for too much credit
  • Keep all your old accounts along with you

When you start implementing the above tips, we assure that you will see a change in your score for the better!

Saving Larger Down Payments

Bankers look for more than just your credit score when considering a mortgage. They also consider factors like income and debt levels, as well as the size of your down payment (5% minimum in Canada). In general, if you have less-than-stellar finances or an unfavorable history, the higher risk will require that lenders take precedence over smaller cash contributions from applicants who do not need help paying off debts currently but could in future years. Consider saving 20-25% upfront instead if bad credits cause problems due diligence process-wise (to weed out riskier applicants and those who lie about their ability to pay). 

Find a Lender That Can Give You a Bad Credit Loan

It can be difficult to obtain a mortgage without an ideal credit score. If you don’t meet the bank’s minimum requirement for approval, try finding “B lender” or lenders who can provide you loan. Are you in Ontario, Toronto, or any other city in Canada and are looking for mortgage without a good credit score? With bad credit mortgage Canada, our team of experts guides you in the right direction by hand-holding and providing extra support.

These agencies work exclusively with people that have less-than-perfect records of payments on their loans in recent years, try finding “B lender” or lenders who can provide you loan. Are you in Ontario, Toronto, or any other city in Canada and are looking for mortgage without a good credit score? With bad credit mortgage Canada, our team of experts guides you in the right direction by hand-holding and providing extra support.

Consider Joint Mortgage as an Option

One way to get a mortgage with bad credit in Canada is by having an individual sign as a co-signer. This person promises to pay your monthly payments if you cannot, but there are many risks involved here! If the other parties stop making their own installment plan, it could become burdensome on top of what was already difficult – financially speaking, at least.

If improving and savings might not be possible for you, searching for a bad credit loan lender might be the safest option for you. We specialize in providing home loans to people with a bad credit score without much difficulty. So, what are you waiting for? Contact us today and discuss the procedure further!

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Categories
Rent to Own

Top 5 FAQs About Homes Rent to Own Near Me

Rent-to-own homes are a great way for prospective buyers to get into the housing market without having all of their finances committed upfront. Instead, they commit only as much money and time as necessary, including making monthly payments against an anticipated price tag until lease expiration; usually, two years or less with no credit is needed.

Rent-to-own is an attractive option for those who need a quick fix and don’t want the responsibility of owning something. The buyer has more flexibility during their lease period, but they are still responsible if anything happens to go wrong. Renters also have peace of mind knowing someone else will protect this property in case there ever arises any danger or trouble at home. If you don’t have a decent credit score or want to improve it, “homes rent to own near me” is always a smart option.

Suppose you are a person who likes to stay abreast of the changing prices of various essential products around you. In that case, it’s barely possible you would remain uninformed about the dynamic value of one of the most imperative assets in the world – “a home.” So, how much does a home cost? If you try to find out the average house price in Ontario, you should know that it’s around $594,000.

Categories
Rent to Own

Simple Ways You Can Prevent A Foreclosure

Foreclosure is a frightening thing to think about for many homeowners, which occurs three to six months after the first payment hasn’t been made. So long as you work with a bad credit mortgage broker, you can secure a private mortgage and retain your status as a homeowner.

What To Do If You Suspect A Foreclosure

Foreclosure often occurs when homeowners are not able to honor financial obligations from events like unemployment, illness, injury, unexpected home expenses, accruing too much debt, and the death of a loved one that had been earning income. While you may be subject to foreclosure, it’s important to take action as soon as possible.

There are two ways in which you can stop foreclosure from occurring should you feel it might happen soon. One way is to contact your lender, while the other is to take out a mortgage loan.

Communicating With The Lender

If foreclosure draws near, it’s important to let your lender know that you are trying to make things right by still showing interest that you want to honor your financial commitments. The lender likely also is not thrilled about going down the route of foreclosure, since it’s a long process that requires attorneys and other expenses. Most lenders are willing to forgive a couple of missed payments and suggest alternative loan plans rather than resort to foreclosure.

If you are anticipating that you won’t be able to make payments and do not see yourself doing so anytime soon, it’s important to let your lender know. Explain why you can’t make payments and request to be given more time or change the loan terms to something that’s more favorable to you.

Go With A Mortgage Loan

If you are already behind on payments, then it could be too late to adjust your payment plan. Fortunately, you have another option before a foreclosure might happen in the form of a mortgage loan. To secure this loan, you will need to find a private lender that specializes in foreclosures. This gives you a simple way to keep your home and continue to make payments towards a mortgage.

For an easy way to find a private lender, you will need to contact a mortgage broker. They will be able to find you the best deal for your situation so you are somehow able to make payments on your home again.

What happens when securing a loan is that a private lender will be able to pay your lender, with the compensation being that you will now need to pay the private lender rather than the original lender. Though as this lender is likely to understand your situation, you’d likely allowed some breathing room and an adjusted plan to be able to pay your new lender back.

Summary

When facing foreclosure, you might not be able to do anything about making payments, but there are a couple of options to consider. If reasoning with your lender doesn’t work, you should consider talking to a broker to help you find a private lender that can issue you a mortgage loan. This helps you pay your original lender off in addition to giving you a more tolerable means to make payments on your home.

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Rent to Own

How to Buy a Car in a Smart Way

Any vehicle is a major purchase expense and usually requires extensive research for the vehicle. In addition to this, those looking at suitable finance options would also need to sift through auto loan income requirements. It is most important to be able to find caring and personalized financial services for vehicles, and now it is not necessary to run from dealership to dealership for the same. Auto loan experts in Canada will always be able to provide the best deals.

Trained Experts

Trained auto lending specialists are aware of all the aspects of vehicles and will be able to understand customer requirements in a jiffy. Since they are in contact with major banks and various dealer plan lending centers, they will be able to provide the best offers after understanding auto loan income requirements. Expect them to also be able to answer all questions related to auto finance. Customers will feel confident to get auto loans after speaking to them. This includes information about loan protection programs and vehicle protection programs as well.

Credit Situation Does not Matter

Customers are eligible to get auto loans irrespective of whether they have reasonable, bad, or excellent credit scores. It is great even for those trying to rebuild their credit. The auto experts are able to provide the best terms and conditions in every situation. All customers need to do is put down their requirements and fill their income details to get experts to call them with instant approval. What’s more, the best dealerships will also be able to deliver cars to customer doors.

Choose New or Used Car

All buyers will be in a position to choose either used cars or brand new cars in Canada. This provides a large database of options from which the right pick can be taken easily. There are three main steps in getting a dream car:

  1. Deciding the Budget
  2. Let the experts pre-approve the loan for best rates
  3. Selecting the car at the end ensures that there is no fear of rejection  

More About Loan Protection

A financial commitment with respect to a car loan means that the payee is in good health and can make regular loan payments. In case the payee is unable to make payments due to reasons like injuries, accidents, or any other at any place, a Loan Protection Plan can be utilized. Various plans as per different budgets can clear off the dues.  

Make Loan Payment Worth It

Cars have come a long way since being in existence for long. Walk into any service center to find the mechanics administering modern rust prevention measures to prevent vehicles from being rusted over time. Despite the treatments in Canada, cars aren’t yet completely protected from salt and corrosive de-icing agents on roads. The chances of rust in various situations can be handled using Rust Protection, Paint Protection, and Interior Protection plans. Paying for these plans will make buying a car through a loan worth its value, without owners having to feel stressed out about car usage.

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Rent to Own

Top 6 Things You Must Know About Rent to Own Home Program

It can be hard to get your hands on a house that feels like home in today’s competitive housing market. This is where rent-to-own homes in the city come in. Renting the property gives you peace of mind and flexibility while showing interest towards owning by paying monthly installments at the same time. This house buying program lets buyers get the chance to see if they like living on a property before making any commitments. Potential home-buyers can live in a given residence for an agreed-upon duration as per lease paperwork and then decide whether or not it is right for them.

A rent-to-own contract allows the buyer to make payments towards a downpayment on their new home. The seller charges an additional amount in addition to monthly rent, and that money pays off the mortgage once it’s paid enough for ownership of the house.

Do you want to buy a lavish home in the capital of Canada? Is the bad credit score a problem? Then we can help you buy your dream home differently while eliminating the need to mortgage. The rent-to-own home is a unique concept that allows people to buy a home after using it as a tenant for a certain period. In the rent-to-own agreement, the buyer expresses their interest to own the property while leasing it, with an option to buy.

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Rent to Own

The Importance of Rent-to-Own Homes in Ontario: A Definitive Guide

Rent-to-own homes are a great way to own your home without the high upfront cost on any down payment. There are many reasons why rent-to-own is such an appealing option for those who want to own their property but do not have enough money saved up. Renting with the option of buying at a later date means you can get some joys and benefits that come with homeownership without having to pay for it all right away.

Homes are expensive these days. If you are not able to come up with a down payment, or if you do not have good credit, the chances of being approved for a mortgage loan is pretty low. Rent-to-own homes in Ontario offer an alternative way to get into your own home, and they can be cheaper than renting long term. There is no pressure on either party because at any time during the process both parties can back out without penalty.

Rent-to-own homes are becoming increasingly popular

Rent-to-own homes are the new thing for middle class families who cannot afford a traditional mortgage. Rent-to-own is becoming increasingly popular with people from all backgrounds and income brackets, as these properties offer more flexibility in homeownership than you will find anywhere else on the market today — even if it is just an option of renting until your finances allow for something better down the line!

Why is rent-to-own a good idea?

Rent-to-own is a good idea for people who are unable to buy furniture or appliances outright. It can be risky, however; the renter may spend more in total than if they had bought it new and then end up losing their items because of past due payments. Rent-to-own can also help people save money by renting rather than buying expensive merchandise such as electronics that will last only one year before becoming obsolete.

Benefits of renting to owning your home

Renting can be a viable option for many people. You will not have to make any large purchases like you would if buying your own home, and it is easier than ever before to find affordable housing options that come with all the features you need.

Here are some benefits of rent-to-own homes in Ontario:

  • For some individuals who are only looking for an apartment or townhouse as their primary residence, renting may work best because there are no long-term commitments involved in this type of arrangement.
  • It is much more difficult now than when I was younger trying to buy my first house but luckily most rentals offer great amenities at fair monthly prices, so they are worth checking out too!

When it comes to rent-to-own homes, the decision is often a difficult one. Renting can be an affordable way of living in many areas and owning your own home may not always be feasible for those with low incomes or credit scores. If you are considering renting a property that offers some form of ownership through monthly payments, make sure that you do all the necessary research before making any decisions. The right rental agreement could provide you with more stability than what most apartments offer while still giving you time to save up for down payment on a future home purchase.

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