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How to Choose the Best Mortgage

When you’re a first time buyer on the property market, or a seasoned veteran, choosing the best mortgage for your financial situation is often a tough task, and always decided by the banking institution of your choice; based on your current financial standing and credit history. There will always be a number of mortgage products available in the financial marketplace, for every applicant, at various interest rates, but, income, debt load, property taxes and condo fees are the variables that will dictate interest rate and mortgage approval by the lender. Is there any way to help solidify your chances of approval? What if you’re struggling with debt repayments? The easiest solution to these questions is to keep close eye on your current debt load to adopt a debt elimination strategy to lower your debt repayment obligation and plan for your future using personal financial management software that will allow you to;
  • manage savings, income, and expenditures
  • create financial goals
  • compare and track your financial situation

Personal Financial Management Software

Using personal financial management software when controlling debt load and having a healthy repayment history will help enable you to get the mortgage rate that best suits your current financial situation is an easy way to keep track of all your financial issues. Using an easy to navigate financial software application such as Money Coach Client Application, will allow you to simply manage your finances and keep track of income, expenses, savings, debt, balanced budget, financial plans and long term financial goals such as mortgage payments. Mortgage repayments can be simply planned while taking into account debt repayments, irregular income or unforeseen expenses. Having a clear and considered plan with manageable goals, while stabilising your finances, will always be a plus when preparing and submitting for your chosen mortgage application. The management software will also allow the user to compare and track your finances on a daily, weekly, or monthly basis, allowing you to best examine your financial goals and if necessary make adjustments to better suit your situation going forward.

Mortgage Planning Tips

Here are just a few things to take note of when choosing the best mortgage for your current financial situation;
  • When choosing a mortgage, consider a less expensive property rather than the maximum you can afford. Circumstances can always change and unplanned expenses in your budget can complicate future repayments. There are two calculations to consider when applying for a mortgage; Gross Debt Service Ratio and Total Debt Service ratio. Gross Debt Service Ratio assumes your monthly housing costs (utilities, taxes, etc.) is not more than 32% of gross monthly income. Total Debt Service Ratio addresses your total debt load (car loans, credit card bills, etc.) and should be no more than 40% of your gross monthly income. Personal financial software management can help pay down your high balances by half and help you avoid going over the limit on your credit card.
  • Keep track of interest rates and their impact on your monthly repayments. Subtle percentage increases can take a toll on your finances, evaluating the impact of increasing interest rates on your monthly payment today may help you to avoid financial problems in the future. If you have fixed rate mortgage none of this apply, if you have a variable rate mortgage this is true
  • Plan to be mortgage free faster and try to be prepared for unforeseen financial difficulties. This can be accomplished by taking a shorter amortization period, or leveraging prepayment privileges.