As a potential new home owner, we’re here to remind you of the importance of doing your homework to help make the most of your real estate investment. By following these top mortgage application tips, you will be one step closer to making a good investment and having your dream home become a reality.
Do Your Credit Report Homework
Before you start applying for your mortgage, be proactive and get a copy of your credit report. Once you have it, thoroughly check for errors and other items which may need to be addressed. Since your ability to get a desired mortgage rate largely depends on the information contained in your credit report, it’s important for you to ensure that all the information is correct.
Prepare the necessary documents in advance. This will save you time and ensure a smooth application process. Depending on the type of mortgage you’re applying for and your employment situation, various documents may be necessary. You will need to confirm your downpayment through banking/investment statements, down-payment gift letter if applicable, or RRSP statements if you plan you use those as a downpayment through the Home Buyer’s Plan. You will also need to verify your employment and income with recent pay slips, copy of your latest T4, letter of employment, recent Notice of Assessments from CRA possibly along with the T1 General, and any other income you may receive.
Get the Stamp of Pre-approval
Getting pre-approved for a mortgage helps you understand how much you can borrow before going through the mortgage application process. This is an important step as it will influence your decision on the upper price limit of your house purchase, and will provide some realistic boundaries before diving head first into the process.
Consider the Future
Your mortgage should be planned in accordance with your future. Your plans may change, but the end goal should always be to reduce financial risks. Think about how long you’re planning on staying in the house, whether or not you should consider saving for a larger down payment, and how much of a risk you are willing to take.
It’s important to be well informed prior to applying for a mortgage. Understanding the options and procedures involved with buying real estate will be hugely beneficial to your plans and finances. Your mortgage is a long-term commitment, and like all big decisions, it needs to be researched and well thought out ahead of time.
If you have any questions about starting the pre-approval process, please give me a call. I have mortgage specialists at every major bank, as well as a mortgage broker to be sure you are getting the best rates and terms available.