CREDIT! Yet another chicken and egg story of the real world!

I don’t have credit, but I need credit to get a loan, credit card, or mortgage. So, how am I supposed to get my first mortgage without any credit? Many young people have very little knowledge of their own credit and how credit works. You don’t need a well-established paper trail of formal credit in order to get a first mortgage. Read on, and your first mortgage will seem much closer than you initially thought.

Do I Need a Credit Card to Get My First Mortgage?

Having two credit cards for at least two years, that are used regularly, in good standing with no late payments on anything on your credit report is the best way to attain a high credit score. In the case that you are new to credit and still want your first mortgage, you still may have options.

The answer to the question above is no; you do not need a credit card to get your first mortgage. Mortgage Brokers can help you find banks that will look at other types of credit such as utility bills or cell phone bills, and negotiate with the banks to approve a mortgage to help you buy your first home.

Sometimes in cases like this, the mortgage lender will want twelve months of bank statements so that they can see your money management history. If there are a lot of returned cheques or charges it would be difficult to get a mortgage approved.

Build Your Credit

Once you get your first mortgage, you will be building your credit while living in your new home. Owning a home and not having late payments on your credit report will open up new credit options.

You will likely be receiving a lot more credit card and store card offers. It is crucial that you don’t get too enthusiastic with all these new offers. Your actual financial situation has not changed, you are just being offered more credit. Make sure that you don’t overextend yourself with exorbitant future payments because that could lead to bankruptcy and losing your home in the long run.

Jamie Arthurs can help you obtain your first mortgage and home. Contact her today to get started!

Homeowners have many options for obtaining the funds needed to renovate their properties – such as home equity loans, home equity lines of credit, personal loans, and mortgage refinancing. But what if you plan to purchase a home that needs fixing up? In this case, there is another frequently overlooked home renovation loan option: a purchase-plus improvement mortgage.

A purchase-plus improvement mortgage allows home buyers to borrow up to 10 percent of the purchase price to a maximum of $40,000.00 for home improvements. Purchase-plus improvement mortgages typically carry lower interest rates than credit cards, lines of credit, and other home renovation loan options.

How a Purchase-Plus Improvement Mortgage Works

Let’s say you’re planning to purchase a home for $250,000, and the renovations you plan to complete on the home would increase the property value to $275,000. You can apply for an extra $25,000.00 to be added to your mortgage, making the total amount that you can borrow $275,000 less your required down payment. This home renovation loan, is a great way to finance your dream kitchen in an otherwise perfect home for you.

How to Obtain a Purchase-Plus Improvement Mortgage

Your lender must approve of the amount you wish to borrow to make improvements on the home you’re buying. They will require quotes from a contractor for the desired improvements prior to approving the application. Once your home renovation loan is approved, the extra money is kept in trust until the agreed-upon improvements have been completed. After the work has been completed and appraised, the funds will be released to you.

Still not sure if a purchase-plus improvement mortgage is the best way to obtain the home improvement funds you need? Jamie Arthurs can help. Contact us for more information about whether this type of home renovation loan is right for you.