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Steps to acquiring financing
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  • 1. Evaluate your credit worthiness to figure out your credit rating.
    Your credit rating is your record of borrowing and repayment over the years.
    Without a credit rating very few financial institutions will lend you money.
    Your credit rating is established when you establish a bank account, apply for a credit card, or apply for a loan .
    Good and Bad information about how you handle your finances may be on your file. This information is held for approximately seven years at a number of credit bureaus.
    When you pay all your bills quickly, and pay off loans on time your credit rating will be good.
    When you miss payments and / or make late payments and have an over abundant of credit cards and borrow more than you can afford, you will establish a bad credit rating and possibly have difficulty getting financing.
    A good idea is to get a copy of your credit report from the credit bureaus (possibly for a nominal charge) and verify its accuracy and correct any errors .

    Tip: The less credit cards you own the better the chances are for acquiring better financing. Cancel and close accounts of credit cards that you never use.

  • 2. Evaluate your financial lifestyle.
    Figure out the amount of money that have on a monthly and yearly basis. Make sure that you able to cover the costs of your daily living expenses and try to establish an amount of money that you feel comfortable paying on a monthly basis for your financing.

  • 3.Plan ahead for the costs involved:
    A. If you are planning to buy a home or property.
    Once you have found a home that you would want. Try to discover all the costs involved in the home buying process. The appraisal fee(approx. $200 ), the home inspection fee(approx$500 ), Land survey or title insurance fee (approx. between $225 to $900), legal costs for notary or lawyer, taxes such as the land transfer tax, the welcome tax and the gst, fire insurance (approx. $500), new home warranty (if you are purchasing a new home), Mortgage application and processing fees and closing adjustments.
    B.If you are refinancing to consolidate debts. Always determine all your costs involved from professional fees involved to taxes and insurance.
    C.If you are financing a renovation make sure that you consider the costs of added insurance, permits and possible added unexpected problems which may arise.
    D. If you are financing the purchase of other investments make sure that the cost of professional fees are covered as well as any tax implications that may be involved.

  • 4. Get financing, The Mortgage.
    A. Choose a term with rates that you are comfortable with.
    Go with long term -if you feel the rates are rising and you can manage a locked in rate for that amount of time i.e. 5, 7, or 10 year
    Go with Short term -if you feel the rates are going to decrease i.e.6 month convertible or variable rate
    B.Choose the features of a mortgage that will help you pay back the loan faster. Choose from Monthly, biweekly or weekly payments, closed or open mortgages: open mortgages you can repay without penalty (6 month or 1 year only), closed mortgages (6 months to 10 years only) repayment of closed mortgages comes with a penalty of approx 3 months interest , prepayment which allows you to pay a little extra and receive a bit of savings on your mortgage payment, amortization period: the longer the amortization period the more interest that will be paid, increase your regular payment, double up on payments, early renewal option, portable mortgage, assumable mortgage, mortgage life insurance
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This site contains general information and is not intended to give financial or other professional advice. If expert advice is required, please seek the services of a qualified professional of Mayco Financial Corporation.


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