The Mortgage Process

There are a few main guidelines that are followed when qualifying for a mortgage. These are normal for most deals but not every mortgage is the same. So your situation may require more documentation or less.

Income
All income will be verified through documentation that the lender will review. Depending on how you are paid will change the documentation you have to provide. Standard documents for a salaried employee would be a letter of employment and recent pay stub. The lender will usually do a verbal confirmation with your employer as well. But different documentation will be required for commission, part-time, self-employed and bonus income.

Credit
Your credit is a major component of the mortgage process. The better your repayment history and credit score the better your chances of getting a mortgage will be. Most credit bureaus will report a beacon score which is what the industry uses to rate your credit.

Ratios
We use two ratios to figure out if you can qualify for the mortgage amount you want. GDSR is your new mortgage payment, taxes and heat on the property as a percentage of your income. There are different limits we can go to depending on how good your credit is. The second ratio is TDSR which is all of your debts as a percentage of your income. So this includes the same as the GDSR plus any loans, credit cards, lines of credit, etc. that you may have. Once again the limits we can go to depends on your credit and the product you use.

Property
The property you purchase is a major component of the mortgage approval process. Some styles of properties have a much higher re-sale value so are looked upon better by lenders/insurers. Example being a single family detached home is easier to get approved than a high rise condo.

The most important step in the process is to get a pre-approval. Getting a pre-approval allows you to go out and shop with confidence. This definitely increases your chances of getting a full approval when you need to. At the pre-approval stage you will be asked to provide the support docs that you would if you had purchased a property. We go through everything and make sure that you are prepared when you are ready to buy. If you are ready to get a pre-approval contact us to get the process started.

Purchasing a New Home

You can purchase a home with as little as 5% down. Contact us to find out how mortgage default insurance works and when you have to pay it, the difference between fixed and variable rates, prepayment privileges and something as simple as payment frequency options.

Refinancing Your Current Home

If you have equity in your property you can take it out to use for investing or even debt consolidation. You cannot refinance your house above 80% of the value so this does not work for everyone. With a quick phone call you can find out if a refinance will work for you.

Lines of Credit (HELOC)

A re-advanceable mortgage with the ability to make interest only payments. This is a fantastic way to free up equity in your property.

Mortgage Renewals

One of the biggest mistakes people make is not shopping the market when their mortgage renewal comes up. This mistake can cost home owners thousands of dollars in extra interest. Many lenders offer the ability to switch your mortgage to them without incurring any costs so it is beneficial to see if this would be advantageous to you.

Subprime and Private Mortgages

In many cases it can be hard to qualify for a mortgage but being a home owner is just out of reach. As a mortgage broker we have access to many lenders that lend money without standard guidelines to follow. This is very true for self-employed people and people with bruised credit. These types of lenders may also be a great alternative when someone is in financial hardship.