5 Tips To Get The Fastest Approval For A Mortgage In Canada

A mortgage is probably necessary when you’re buying a home in Canada. The first step is comparing mortgage rates, but the real key is applying and getting approved. Although getting a mortgage approval may seem challenging and overwhelming but with the right preparation, it can be fairly easy.

Mortgage approval and the amount of money you can borrow are directly related to many factors. There is no shortcut to getting a guaranteed mortgage approval in Surrey, Canada, but following these tips should improve your chances.

1. Make sure your credit score is good (and improve it)

In order to determine your creditworthiness, your credit score must be between 300 and 900. Late payments, credit application errors, and defaults will lower your credit score each time they appear on your credit history.

An early payment, an application for credit, or a default will increase your credit score when recorded by credit reporting agencies. The higher your score, the more likely you are to repay your loans in the future and so are less likely to default. If you have this kind of record, mortgage lenders are more likely to lend you money since they know you’re more likely to repay your loan.

According to the Canadian credit bureaus, here are the usual credit scores:

  • 300-692: Poor
  • 693-742: Fair
  • 743-789: Good
  • 790-832: Very good
  • 833-900: Excellent

Mortgage lenders assume that borrowers with poor credit are less likely to make timely repayments, so they will take a chance on lending to you. If your credit score falls below 600, most major banks won’t approve your mortgage application. You might be better using a “Profirst Mortgage Lenders” or even a private lender in surrey canada, they will charge you a competitive interest rate.

You should improve your credit score before applying for a mortgage so that you will have access to better mortgage lenders and lower mortgage rates in surrey canada. You can take the following steps:

–Monitor your credit score to see how you’re doing. You can access free online tools for this.

–Keep your credit cards and loans current and in full by paying them on time.

–Keep your credit usage under 30% of your total credit limit.

–Don’t take out more credit than you need. Making many credit inquiries may harm your credit score.

If you don’t use your oldest credit card, keep it active. It helps to boost your credit score if you’ve had a credit history for several years.

2. You can reduce your debts by paying them off

The ratio of debt-to-income is one of the crucial factors lenders consider, when deciding whether or not to lend to you. Even after you have paid off your existing debt, lenders will want to know if your income will be sufficient for mortgage payments. The amount you can borrow will be affected by your existing debt.

You have to keep your income as high and stable as possible, which is the first part of this ratio. The most ideal situation is to be in a full-time job for a long time. You can maximize your affordability by paying off existing debt, as well as increasing your income.

All forms of credit with regular payments are included here, including car loans, student loans, credit cards, and other credit cards. When you apply for a mortgage, you’ll be able to rely on a higher income-to-debt ratio if you pay back as much of your debt as you can.

With a higher income and fewer debts, a bigger mortgage will be available to you. The simplest way to improve your debt service ratio is to pay off your existing debt to the greatest extent possible if you can’t increase your income easily.

3. Invest more to get a larger down payment

You have to make a down payment of a certain amount depending on the purchase price of the home you intend on buying in Canada.

  • A minimum down payment of five percent is required for properties priced less than $500,000
  • Home purchasers who are purchasing a home between $500,001 and $999,999 need to make a down payment of five percent of the first $500,000 and afterwards ten percent of the remaining.

If you choose to put down more than the minimum down payment, you will still be able to do that. Here are a few benefits:

  • You will be able to purchase more with a larger down payment. A larger down payment also expands your maximum purchase price because of the minimum down payment rules.
  • A larger down payment means you’ll borrow less and need a smaller mortgage, allowing you to buy a house within the same budget. A lower interest rate on a smaller loan can save you money over time. Consequently, your monthly mortgage payments will be lower, allowing you to better plan your budget.

4. Determine what you are able to afford

In order to find homes you can really afford, you should have a realistic budget in mind before you begin house hunting. Having a budget will help you avoid disappointment and save time.

You can calculate how much you can afford after setting aside enough money for your down payment and paying off your existing debt. Don’t forget to calculate the closing costs associated with your home purchase, which are additional expenses.

5. Get pre-approved for a mortgage

Getting pre-approved for a mortgage is the first step to home ownership once you have your financials in order. You can view a mortgage pre-approval at any time to see how much money a lender is willing to lend you and what interest rates they’re willing to hold.

Making an offer on a house that interests you is easier when you know what you can afford. If you do not change your employment or financial situation between the time that you obtain a mortgage pre-approval and when you actually apply for your mortgage, you should have little trouble getting approved.

Wrapping Up

Your first mortgage application may seem overwhelming, but if you are prepared, it won’t be overwhelming. Get a mortgage pre-approval, one of the ways we’ve discussed, and you should be able to get approved fairly easily.

An experienced mortgage professional, such as a Profirst mortgage, can provide you with personalized advice and information about the mortgage process. You can get expert advice and personalized service from Profirst mortgage without spending a cent on a consultation.