Buying a home in Toronto can and should be a fun experience. The secret in helping make the home buying process fun is basically being organized from the get go. Understanding the process will make you feel not only more comfortable but also more confident when you begin to understand the people and the roles that they will play in the whole process. This 10 step guide will help you through the process.
Getting your Finances up to Date
The first step in the home buying process is understanding your personal finances and the things that can affect your financial situation. Things like debt, credit reports and income to dept ratio. Your credit report is vital to how a lender will judge your application favorably or not.
Understanding a credit report and what to look for can be a challenge especially if you don’t know what to look for. In Canada there are two different bureaus that people can access their credit score and full report, Equifax and TransUnion; both sites provide Canadians and lenders the information quickly and easily on the web. Knowing your FICO score and how it affects buying a home in Toronto is important and plays a big role in the process. Home buyers that are seeking a mortgage find out early if their score is looked upon favourably by the lender which in turn can affect not only the interest rate that is offered but also the type of mortgage product. Before creditors lend money they want to determine the risk factor and credit scores help them make that determination.
Credit scoring looks at five variables of your credit report:
1 Your payment history
2 Amounts of debit you currently have
3 Length of your credit history
4 Type of credit used (car loan, visa etc.)
5 New credit that is being applied for
You can improve your credit scores by analyzing your credit report and charting an action plan to improve it. It’s important to check your report periodically to make sure there are no errors. Correcting errors can be a long and tiring process. If you have discovered errors in one or more of your credit reports, or even worse, accurate references to late payments or other negative issues that lower your credit scores. Take a deep breath and try to stay calm, because credit report errors can be fixed. It's possible to remove many negative items as well.
Here is how:
1 Take a photo copy of your credit report and circle all the discrepancies.
2 Write a letter to the reporting Bureau and explain in detail and request an investigation to resolve the issues, send any supporting documents and do not send the originals.
3 Send everything in a package via courier with a return receipt request so that you have documented your request.
4 Send a similar letter with your supporting evidence to the creditor who has reported statements that you disagree with. Always refer to a billing statement to find the correct address for disputes.
If your dispute involves personal information, such as your current address, enclose a copy of your driver's license or a utility bill in your name to verify your residence.
The reporting agency will initiate an investigation, contacting your creditors to verify the accuracy of the information. If the creditor cannot verify that the entry is correct, it must be removed. When the investigation is complete, the agency must send you a free copy of your report if changes were made.
If the investigation uncovers an error, you have the right to ask that a corrected version of your credit report be sent to everyone who received the report during the past six months.
Please remember that having outstanding credit allows the consumer to have buying power and buying power is the key to long term success!
Please feel free to comment and share your personal experiences with us.