7 Tips To Get Approved For Mortgage

7 Tips To Get Approved For a Mortgage

An Introduction

If you are planning to buy a home, it is so important for you to be prepared for every possible scenario, and at every possible step. Besides keeping a close eye on interest rates and hunting for your dream home, the biggest step in the process is to apply for financing, otherwise known as a mortgage. It may seem a little stressful and intimidating at first, however, it can be enjoyable and handled professionally with the help of a Montreal mortgage specialist, given you have your financial affairs in order.

Below, we will talk about 7 imperative tips that will help you get your application for a mortgage approved, quickly and at a very competitive rate.

    • Preserve A Larger Amount Of Down Payment
      Needless to say, in order to buy a home, you are required to put some money down, which is usually a significant amount of cash upfront that will use as a down payment. One of the reasons why a big down payment is good is that you will need to borrow less, therefore resulting in less interest paid over the course of the term of the mortgage. It should be noted that getting your mortgage application approved sometimes depends on the down payment as well. In Canada, an upfront payment of less than 20% of the home’s selling price requires the buyer to get mortgage loan insurance.
    • Keep An Eye On Your Credit Score
      Mortgage lenders use your credit score to assess your financial situation and whether or not you are able to repay your debt. In Canada, if your credit score is high, there is a good chance that you will get a very competitive and lower mortgage rate, than if you had a lower credit score. Your credit score is a major factor in this process.It should be at least 660, but the higher, the better. Adding to your overall score, your credit report should also include information on debt payments (if any), your overall debt levels, the number of accounts you have (open and closed), and the length of your credit history. Completing bill repayments and loans in a timely manner, without using too much of your available credit will help you to achieve a higher score.
    • Make Sure Your Income Is Stable
      When you apply for a mortgage, you need to make sure that you keep your day job. Remember, mortgage lenders will not approve your mortgage application without proof that you can, in fact, make timely payments. The best way to display this is to secure a full-time job so as to prove that you can make payments. This also guarantees your income for the long run and helps the underwriter build confidence in your file. If you apply for a mortgage with your partner, then both of you should have full-time jobs.If you are self-employed, things can be a little tricky. This is where an experienced Montreal mortgage specialist can be very helpful. He/she will get all of the pertinent financial details on your business, so you can indeed meet your mortgage payments. Since the specialist has all of the company information, he/she will help you prepare the best application for your mortgage.
    • Get A Pre-Approval On Your Mortgage
      A mortgage pre-approval takes place when a lending mortgage broker in Montreal understands your financial situation and pre-approves you for a set amount, term as well as interest rate before you need the funds. Again, apart from your credit score, the amount of your down payment, your employment status, your income debt-to-income ratio as well as your liabilities and assets are taken into consideration. Getting a pre-approval on your mortgage is an excellent way to begin to hunt for your dream home within your price range. This pre-approval implies that you can move further to submit an offer when you actually find a home in your price range.
    •  Get A Good Rate
      Getting a good rate is the assumed outcome of a mortgage application but it can go both ways. By using a reliable mortgage broker in Montreal, you will find lenders who offer lower rates. With a great mortgage rate, your monthly payments will be significantly less, therefore making it easier for you to pay back your mortgage.
    • Pay Your Existing Debt
      Getting a mortgage means taking on long-term debt, so you must focus on minimizing your existing debt. Once you have been approved for your mortgage, making monthly payments will be a lot easier when you do not have many debts to pay off. Having a good debt-to-income ratio before applying for your mortgage is a good idea, generally 36% in Canada.
    • Analyze What You Can Afford
      There are several things that can affect how much of a mortgage you can afford. This includes your known living costs, expected mortgage payments, debt repayments as well as other financial obligations. Although mortgage lenders take all of this into consideration, it is essential to be honest with yourself about what you can actually afford, so that you can save your time by looking at only the properties which are in your budget. After all, it is only you who knows your lifestyle needs and financial status.

Wrapping Up!

When you are working towards submitting a mortgage application, it is important that you have a Montreal mortgage specialist by your side. The best place to find one is MortgageMD. Their team of experts and finance professionals works tirelessly to make sure that you do not miss any opportunity on getting approved for your mortgage.

Related Articles:

1. Is your Mortgage Healthy?
2. Get the best rate the first time you ask.

 

Share: