First Time Home Buyer Canada:
Don’t be afraid of your dirty laundry- Tips to Get Your Mortgage Approved.
You have found the perfect home, in the perfect neighbourhood, and you’re simply in love. Now what? Applying for a mortgage can sometimes be a daunting or scary process when faced with laying all your financial “dirty laundry” out to dry in front of a lender. But fear not! Read on for our first time home buyer canada tips on how to get approved so that you too can take advantage of the currently low Canada mortgage rates.
The 5 C’s of Credit: a staple in determining whether you qualify for the top Canada mortgage rates
- Credit History
Do you Pay back your debts. A lender’s biggest concern is whether you will pay back your debts and your credit score is also largely affected by how regularly and on time you make payments. So if you still have that vacation to Puerto Vallarta or part of that new car left on your credit card, put in an investment to pay off your balance before applying for a mortgage.
Have you accumulated assets? Or, in simple terms, have you managed to save some of the money you earned? Healthy saving habits are a good indicator to lenders that you will be capable of handling the extra burden of a mortgage. This first time home buyer canada tip can help you obtain a fantastic canada mortgage rate mortgage.
In this case, collateral means your house itself (the security). Should things go awry, your house will be the lender’s biggest piece of security. That means that the lender can take possession of your house and sell it to recoup any funds in the event that you do not make your mortgage payments. Also, another first time home buyer canada tip, to obtain some of the top canada mortgage rates, if you have other forms of assets, to demonstrate fall back, it will help your cause.
Do you regularly spend 50% or more of your income on Canucks tickets? If so, this may not be the right time to seek a mortgage approval. Capacity is how large a percentage of your annual income that your new mortgage would take. If having a mortgage would bring your debts to more than about 40% of your annual income, a lender may determine you don’t have enough capacity for a mortgage. Don’t know your current capacity? One way of figuring this out is by using an online mortgage calculator. Or call us, and we can help you figure it out!
Also known as the charming, witty, and decidedly spontaneous you. Your character evaluation rounds out your credit profile by taking into consideration things like your job and your current housing situation.
What else is important?
- Understand your preapproval situation
Your mortgage specialist will verify your income and check your credit before you can go through final approval stages. It is crucial for you to go through this screening process. No, a rate hold is not the same as being pre-qualified. Ask to make sure that your mortgage professional is checking your credit history at the beginning of the approval process so you have a clear understanding of what to expect and there are no surprises.
- The more info the better
Down payment receipts, letters of employment, or anything else you have to help the mortgage specialist understand your financial picture will help make the approval process easier.
To wrap things up, mortgages can seem very complicated in the beginning. But by working through each aspect of your mortgage step by step and by having all the necessary info prepared and ready, you can have a much smoother home buying experience. And the time really never has been better to be a first time home buyer. Not only can you take advantage of the First Time Home Buyer Tax Credit, but with The Mortgage Specialist, you can get some of the best mortgage rates in Canada.
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