If you’ve stumbled across this article, it must mean you are thinking about buying a new home for your family. Whether it’s your first home or tenth, it can be an overwhelming time for you. But I’m here to answer any of your questions that you may have as well as to help you overcome any challenges that appear throughout the process of getting approved for a mortgage.

What exactly is a mortgage?

When you buy a home, it’s very uncommon to have a million dollars on hand to pay for the home upfront. To buy a house, a mortgage is typically obtained from a bank or lender who will lend you the money to purchase the home outright. Then, over the next 20 years or so, you slowly repay your mortgage loan until that home is officially your own.

If you sell the house you bought in that time frame and buy another, you may be able to pay off one mortgage in a lump sum after the sale of the home closes. Then you take out another mortgage loan for the new home you purchased. Though it might seem like a simple concept, it’s quite complex. Before lending you the money to purchase your new house, the bank or lender needs to verify a few things to make sure you can realistically afford a home and be able to pay them back for the loan they are providing you with.

Mortgage lenders will need to verify these things in order to get you pre-approved for a mortgage:

• Whether you have a stable job to consistently make money to pay back the loan.
• Whether you make enough money to pay back the loan in the agreed time frame.
• Whether you have good or bad credit.
• Whether you have extra money put aside to cover the closing costs, land transfer tax, downpayment, and other monthly expenses with home ownership.
• Whether you have existing loans or loans in the past that you haven’t paid back.

Additionally, you will need to provide your mortgage broker with these items:

• Identification – driver’s license, passport, etc.
• Employment verification – Last 3 pay stubs
• Proof of income – Last income tax return
• Proof of assets – Copy of your RRSP investments, bank account statements, etc.
• Credit score verification – Your mortgage specialist will need to run a credit check for the lender. The higher the credit score you have, the lower your mortgage rates will be. The credit score you want to aim for is 750 or higher. If you want to improve your credit score, start paying down and eliminating any outstanding debts or loans. Make sure you make your payments on time and clean up any errors on your credit report.
• Other documentation – Existing student loan documents, car loans, etc.

What happens if you don’t get approved for a mortgage?

Working with a mortgage broker is way better than going to the bank. A mortgage broker can offer you ample mortgage solutions instead of just one or two, unlike banks. An experienced mortgage broker like myself can also help you strategically set yourself up to get a lower interest rate, pay off your previous loans, and improve your credit score.

If you’ve previously been denied a mortgage in the past read this blog HERE to find out what your next steps should be.

If you’re self-employed, it may be harder to get pre-approved for a mortgage. You need to ensure that you can prove that you receive a steady income, even though it may fluctuate depending on the number of clients you have or the season. THIS is my quick guide to mortgages for the self-employed.

And again, DON’T STRESS! Once you have collected the documents above, you’ll be ready to take a look at the numbers with an experienced mortgage broker, like me, Darren Robinson. I’ll be able to work out the calculation of how much of a mortgage you can afford, what the interest rate on that mortgage will be, and what your next steps are. If that sounds like a plan to you, click here to book your free mortgage consultation with me, or give me a call at 705-315-0516. Let’s find you the best rate out there and lock it in so you know you have the funding you need to buy ‘the one’ when you see it.