Beginners Guide to Getting a Mortgage

Beginners Guide to Getting a Mortgage

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A beginner’s guide to getting a mortgage

In this beginner’s guide to getting a mortgage we will take you through the main steps of applying for a mortgage application. This beginners guide to getting a mortgage will cover the main points that will help you better understand what is involved when getting a mortgage in Canada.

Beginners Guide to Getting a Mortgage

A beginner’s guide to getting a mortgage STEP 1 – find a mortgage professional

We strongly recommend you working with a Mortgage Broker or Agent. They are licensed with their respective Provincial Governments and have met all the required educational standards to become a licensed mortgage broker or agent.

There are many advantages to acquiring the services of a mortgage broker or agent. To name a few;

  1. They work for their client’s best interest,
  2. Mortgages are what they do day-in, day-out,
  3. Because a mortgage broker or agent is not working for any of the lenders there is no conflict of interest for them towards pushing you to one lender or the other,
  4. They constantly stay up to date with the real estate financing world by participating in continuing educational courses and workshops.

A beginner’s guide to getting a mortgage STEP 2 – ‘checks and balances’

Buying real estate is, for most people, the largest single investment they will ever make, and because of this, getting a mortgage should not be taken lightly. Every person thinking about buying their own home whether now or in the future should start planning for the inevitable. What is the inevitable you ask? It is being able to show the lender that you are able to pay them back on a timely manner as agreed upon based on your credit strength and income. And how do you show this in practicality? Lenders such as Chartered Banks, Trust Companies, and Credit Unions follow Government underwriting guidelines, and as well their own internal policy’s, all designed to test how strong or week someone’s personal financial strength is in comparison to their debt level’s to be able to pay back the mortgage loan. To do this the lenders have certain requirements and they ask for information from the borrower when considering whether to approve them for a mortgage loan or not. They want to make sure at minimum the borrower has:

  • Enough income to pay back the monthly principle and interest of the loan
  • At least 5% down payment or more; you can even use gifted money from immediate family
  • A satisfactory credit history and a healthy credit score
  • We also recommend checking your credit report and score regularly, perhaps every year or two at Equifax and Transunion. This is great preparation for when you are ready to apply for a mortgage by making sure there are no discrepancies or fraud activity in your accounts.

Beginners Guide to Getting a Mortgage

That means from now you can start putting aside money each month in your bank account for your down payment and making sure that you have a steady job or income coming in to show the lender that you can afford to pay back the loan. As well, you want to make sure that you are paying back your debt on time, and on a monthly basis, and not be late making those payments.

A beginner’s guide to getting a mortgage STEP 3 – Consult with your Mortgage Broker or Mortgage Agent

Beginners Guide to Getting a Mortgage

Now that you have done your checks and balances, you can contact your Mortgage Broker or Mortgage Agent and consult with her or him about your current financial strength and debt obligations. They will ask you to fill out their mortgage application so that they can better assess your financial health and credit worthiness/readiness to apply for a mortgage. Your mortgage professional will, after reviewing your financial and debt history, ask further questions and give you advice on what steps to take next; whether to continue with your mortgage application or to wait until other matters are taken care of to strengthen and improve your chances of getting approved for a mortgage.

 

This post and its content, we hope, has provided you with the basic information you need when considering applying for a mortgage. Don’t hesitate to Contact Us with your questions, and if you would like to start the mortgage application process. As well, we invite you to share any thoughts you may have about the mortgage application and approval process below in the comments section.

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How to Get Approved for a Mortgage

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How to Get Approved for a Mortgage

Knowing how to get approved for a mortgage is very helpful when planning to buy your first home, or investment property or even your second home. Do not even think that real estate financing can be approved without knowing that there are certain prerequisites on how to get approved for a mortgage.

people that are mortgage happy, how to get approved for a mortgage

When it comes to getting a mortgage approval you should be ready to provide proof of employment / income, down payment, strong credit history and willingness to work with your mortgage broker or agent.  There will be occasions when it’s just not time yet to buy your own place and that’s alright. This wake-up call allows you to prepare yourself for the near future. Things that you can do on how to get approved for a mortgage are:

1) Make sure you have a steady income stream; full time employment or self-employment

2) Start putting aside money for your down payment. You will need at least 5% of the purchase price. The higher your down payment amount the higher could be your chances to getting a mortgage approval.

Equifax_Transunion, How to get Approved for a Mortgage

3) Do a credit check on yourself with both Transunion, and Equifax Canada

to make sure your credit is in order. If you find any problems with it, such as fraud, outdated payment / debt balance information, incorrect personal information, or anything else; immediately rectify the issues. The stronger and cleaner your credit bureau history the better it will look when the lender reviews it at the time of mortgage application.

4) Even the property you are interested to buy can make a difference in your mortgage approval rating. There are times that for different reasons the lender will not approve the mortgage application, even though everything else is good, because the property is not marketable, or too small, or was previously used for illegal purposes. This is where it pays off to work with an experienced and trustable Realtor who can find you the right properties.

5) Lastly,and equally important, consult in advance with a mortgage professional about your future plans of home ownership. A mortgage professional is trained and educated on the subject of mortgage lending and underwriting. They will be able to provide you with valuable and timely advice.

Are you wondering if you could be approved for a mortgage and how much? Contact us. We are here to help, and work with you in reaching your home ownership goals.

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