Updated: December 2022
Choosing the right mortgage is just as important as and can be as stressful as finding your dream home. Whether you are purchasing your first home, or are a seasoned real estate investor, the Canadian Mortgage Authority team can provide the best advice on how to prepare for the mortgage application process.
Tip #1: Understand Your Finances:
As your Grimsby mortgage broker, I use a consultive approach to ensuring that you receive the mortgage that best fits your needs. In-order to help you decide on the best mortgage for you, I will need to identify your short and long term needs and goals. How long do you plan on living in the home. Will it be your forever home or will you likely want to, or have to move in the foreseeable future?
What does your budget look like? Do you have a budget?
What are your income prospects? Do you anticipate earning more in the coming years based on your job or industry?
What is your lifestyle? Are you home body, or must you travel?
What are your spending habits? Are you a spender or a saver?
These are all questions that you should ask yourself, just to name a few.
What are your current debt obligations such as loans, leases and credit cards? Can you afford to continue making payments on my existing debts and also a new mortgage payment, as well as property taxes etc. that are associated with home ownership? Paying off debt, especially credit card debt, is arguably more important than saving your down payment.
Put all of your documents together, such as paystubs, T4’s, etc. along with a list of current debts and assets. This will make things go a lot smoother.
Knowing your credit score is something that everyone should know. I recommend setting up an account with Equifax to find out what your credit score is. This is truly the only way to accurately obtain your credit rating. There are other free services that claim to, however, they do not deliver your true score. Knowing your credit score ahead of time gives you the opportunity to fix any problems your financial record may have. Everything else being equal, the better your score, the better rates you may receive on your mortgage. More information on how your credit score affects your application can be found here.
Tip #2: Start Saving Ahead of Time
Before you start looking for a home or apply for a mortgage, you will want to start saving for a down payment. You will want to do this as early as possible and take advantage of a TFSA and/or open an RRSP. The income earned on your savings within your TFSA will be tax free and you can borrow up to $35,000 from your RRSP without having to pay tax on the withdrawal.
If you are short on savings explore the possibility of whether a family member would be in a position to help you would with gifted funds to “top up your savings”. As your Grimsby Mortgage Broker, I will be able to help guide you on the required down payment and closing costs required for a given purchase.
Tip #3: Get Pre-approved
Getting pre-approved, or more accurately pre-qualified for a mortgage gives you the confidence that you are ready to start shopping for a home. It will provide you with a range of affordability based not only on what you qualify for on paper, but also on how much you are personally comfortable with based on the required down payment and mortgage payment, in-light of your income, lifestyle etc.
As part of the pre-approval process, we will also review relevant income documentation along with your credit. Being pre-approved can also save you time because it means all of your financial documentation will be together and organized for when you actually apply for your mortgage.
In conclusion: Preparing for a Mortgage Application
Obtaining a Grimsby or Hamilton mortgage can be very overwhelming without the guidance of an experienced expert, but if you follow our mortgage preparation tips you will have everything in order which should help to make the process stress free.
For more tips or to get started on your mortgage application today, please contact Canadian Mortgage Authority, Inc. at 905-309-8799.