If you are starting to shop for a new home in Canada, then getting pre-approved for a mortgage is highly recommended. A pre-approval will show a prospective seller that you are serious about buying and it will also give you a good idea about how much you can afford.
If you are ready to get a mortgage pre-approval, here are a few tips that will help you qualify for the best rates and largest amount you can.
Work with a mortgage broker. Sure, it is possible to shop around for rates yourself, but working with a mortgage broker simplifies the process immensely. Mortgage brokers have access to dozens of lenders and working with a broker is one of the best ways to ensure you can lock in a great rate on your mortgage-preapproval.
Get your documents in order. In order to get pre-approved for a mortgage in Canada, you are going to have to have certain paperwork ready. This will include things like your Notice of Assessment, bank account statements, a recent pay stub, etc. In most cases, your mortgage broker will give you a list of what you will need prior to your first meeting with them.
Maintain your credit. The better your credit is, the more likely lenders will be willing to offer you a good rate on a mortgage. In the months and years leading up to your house hunt, you should do your best to maintain a good credit rating. Pay your bills on time and don’t borrow too much. (You should however borrow some money – such as using a credit card on occasion – because lenders will want to see that you have a good repayment history.)
Once you are pre-approved, don’t make major purchases on credit or quit your job. Your mortgage pre-approval is based on a number of factors including how much debt you have and how much you are earning. If you make a major purchase such as a car or if you quit your job, your pre-approval offer may be withdrawn.
Ensure you are comfortable with the mortgage payments. Just because you are pre-approved for a home worth a certain amount doesn’t mean you have to purchase a home worth that full amount. Decide for yourself whether you will be comfortable with the mortgage payments. If not, it is better to buy a less expensive home that be financially stressed each month.
If you are ready to get pre-approved for a mortgage, then contact Akal Mortgages today.
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