A mortgage is a sum of many parts and there is a lot to think about, especially if this is your very first time applying for a mortgage. It is tempting to jump in, complete a mortgage application and start looking at houses, but before you even begin writing your mortgage application, there are several things you can do to help put you in the best position possible for being successful in the mortgage process:
Check your credit score – Tip: work on getting your credit score as high as possible. Lenders focus a lot on your credit score when determining if you are well qualified to borrow at a competitive rate. So, make sure your score is as high as it can be.
If you get a copy of your credit report and your score is lower than you expected, see if there are errors affecting your history. Check for late payments that you might ask creditors to remove from your record to help raise your score. And you can also pay down debt to improve your credentials before you try to borrow. Here are some more tips on how to avoid credit mistakes.
Set your budget – Lenders tell you the maximum amount they will loan you. But you may not want to take the largest loan your lender permits, so you can avoid devoting so much of your income to housing.
Before you go to a lender, look carefully at your overall budget and financial goals, and set your own housing budget based on what makes sense for you. (link)
Save your down payment – The minimum amount you will need for your down payment depends on the purchase price of the home you are buying. In Canada, if your down payment is less than 20 per cent of the price of the home you want to buy, you must purchase mortgage loan insurance. Lenders may require a larger down payment if you have a poor credit history or are self-employed. Questions about what sources are acceptable for a down payment? Your mortgage broker will be able to provide you with this information!
Call a mortgage broker – Before you start even looking at houses, you should speak to a mortgage broker! Making sure you are ready to borrow before you need to borrow is a step in the right direction. Working with a One Link Mortgage Broker ensures that you get independent advice from an expert who isn’t tied to any one lender. They can offer you more choice and competitive products and help you get the best product and rate you are eligible for. Mortgage Brokers also save you time by negotiating on your behalf. Best of all, their services continue on after your mortgage closes to ensure you are always informed and continue to get the best mortgage should you refinance, renew or need a new mortgage.
If you have questions about how to start your pre-mortgage application checklist, call 204-954-7620 and speak to one of our knowledgeable One Link Mortgage Brokers.