Mortgage Agent Discusses Millennials
Ben Sammut Mortgage Agent Discusses Millennials. What millennials need to know about getting a mortgage. How to accept family gifts for down payments. How to buy a house in this competitive market. Transcript Davelle: Welcome to the Morrison Report. I really wanted to create a podcast that would give people insights into the Toronto real estate market. You can follow me on Twitter @DavelleMorrison and on Instagram as Davelle Morrison, and you can also like my business page on Facebook. On today’s episode, we have Ben Sammut with us. He is a mortgage agent with Mortgage Architects. He’s also a millennial. So today we’re gonna be talking about issues affecting millennials and their mortgages, so join me speaking with Ben. So Ben, tell us, what are some of the most important things for millennials to know and do about getting a mortgage? Ben: Well, I think it first and foremost starts with the fact that we need to differentiate ourselves from the American market. Usually what happens is a lot of millennials are getting the news from these dismal housing markets going on in the States and dismal job markets, and while the job market is a little different nowadays from what our parents had, mortgage financing is a bit of a different animal down there. So, we don’t need to be as discouraged, and I always start with just, just start with a plan. See where you are now. Davelle: Cool. Awesome. Ben: Yeah. Davelle: That’s great advice. So, someone comes in to see you. What’s the first thing that you take them through or you do with them? Ben: So, the process of pre-approval is pretty straightforward. It’s the same with a mortgage broker that it would be with the banks, but sometimes a little bit more detailed. So, we’ll have a first, or a primary conversation, just to go through their needs. We see what they want to do, see if their expectations are realistic, and then from there we just try to find the perfect fit between their income, their debt ratios, what their credit can afford them, and then really what kind of options they can pull on from there. So, if Mom and Dad are able to help, if there’s anything like income suites that we can look at, and I’m sure we’ll speak to that a little bit later on, but we really just want to make sure that all options are explored for them, so that they’re realistic when, by the time they’re ready to go out with you, they know what they’re looking for. Davelle: So, before they come and see you, would you suggest that they pull their credit history beforehand so they have an idea of where they stand, or is that something that you would do for them? Ben: It’s something that we do. One of the benefits of working with a broker is that we’re able to only pull one bureau and then present that to all of our banks. So, there’s a common misconception that multiple pulls on your credit bureau can damage it pretty badly. It’s true that if you pull a few bureaus for, let’s say, a car loan, then a student loan, credit card, mortgage, things like that, it’ll affect your credit score negatively. But, if you’re just checking in and you take one of those consumer reports that are offered free through certain websites, it doesn’t hurt for you to know but we’ll be able to give you a much better analysis anyways, so … You’re really free to do either way, but we’ll certainly make sure you know what’s going on. Davelle: So, what are things that you might want to suggest that millennials could do now to make sure that they have a good credit history, before they come and see you? Ben: One of the things that I would definitely advise against is applying for multiple credit cards. So, I have plenty of friends my age and slightly older that would always get free newspaper subscriptions or boxes of cookies or Raptors tickets for signing up for a card that they never use, and they think because they never use it that it’s never going to affect their credit score. But there is a portion of your score calculated based on the amount of credit you have available to you, and I think a lot of people don’t realize that it’s not good to have $10,000 in unsecured debt available that could cripple you at any moment, if you’re looking to apply. So I say, the best thing to do is start off with one credit card. Make sure you’re keeping on time with your payments, and then from there, just establish a good repayment history. As brokers, we’re able to tell you which are gonna really help out your credit score, which ones not so much. So as long as you’ve got somebody who’s somewhat financial savvy to advise you and tell you exactly which ways to move forward. The main concern is just that you are actually thinking of your credit score. Davelle: So, what if you’re the kind of person that doesn’t want to have a credit card at all, and you want to pay cash for everything? How’s that going to affect their credit score? Ben: Well, it really isn’t. It’s not going to do any damage to their credit score, but when they go to apply for a quarter of a million dollars in a mortgage, and they don’t even have any repayment history on a $2,000 credit card, it’s a little difficult for banks to learn to trust them. So, you’re almost better off taking on a little bit of debt and establishing a good payment history before you actually try to take on larger debts like car loans and mortgages, because if you pay cash for everything, you’re trying to establish a cash-only standard and it’s just not really possible