What Home Buyers Who Are Single Should Know – Ask Bruce Coleman, Vancouver Mortgage Broker
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What Home Buyers Who Are Single Should Know
Nationally, and this of course includes Vancouver, a recent census survey from Stats Canada revealed that single people now comprise 27.62% of Canadian households. They actually make up a larger group than people who are married or living common law with children.
Single people also want to invest in real estate and want to buy either a home or a condo just like everybody else. Real estate investment is still quite an attractive investment these days interest rates the lowest they’ve been so it’s still a perfect time to buy.
Rent money just ends up in someone else’s pocket and doesn’t earn you a dime. With an investment in real estate, you can build up equity and increase your investment through appreciating property prices. This means you can use your investment as a means to make money which you can build up for your retirement.
The question that a single person might be wondering about is whether they are likely to experience more of a hurdle when it comes to getting approved for a mortgage application.
So, should you take the plunge? The main problem with being single is that your mortgage payment is your sole responsibility as you can’t access the income of another person.
If you feel you have job security, and plan to be living in the City of Vancouver for the next few years, then it could be advantageous for you to invest in real estate.
It’s important that you plan to live in your newly acquired real estate purchase because asides from the down payment you have tot remember that the closing cost for buying a property can be as a high as 2% of the purchase price which could take some time for you to recoup.
Most experts suggest you should only consider buying a property if you plan to be staying for at least a minimal of 3-5 years.
What Lenders Look for in Single People
Several of the things that lender will be looking when it comes to a single person applying for a mortgage includes:
- Employment – A lender will want to know that you have a solid employment history with your current employer, and will look at your employment history going back for the past several years.
- Income – You will also have to provide at least 3 years of your past tax records to verify your income as stated on your application. You will be required to provide additional information if you also happen to be self-employed. The lender will perform what a debt-service ratio analysis as most lenders won’t consider you application if more than 32% of your income is used towards the payment of your outstanding debts and costs to pay for a mortgage including property taxes, utilities and insurance.
- Debts – A lender will also want to know everything about your current debts, and credit history including outstanding personal loans, conditional contracts and credit cards.
- Down Payment – Any down payment which is less than 20% of the purchase price of a real estate property will require that you apply for mortgage insurance through such agencies like the Canada Mortgage and Housing Corporation (CMHC) which is an additional expense that will be added onto your mortgage cost.
- Closing Costs – As stated previously, you need as much as an additional 2% in expense to cover closing costs.
If you’re single and ready to take the plunge into real estate investment then you might want to consider using an independent mortgage broker such as myself. I can give you plenty of helpful advice and can also help you find the best possible rates as we have access to numerous mortgage lenders.
