First steps for your mortgage approval.
Confirm your affordability
Make sure you provide the requested documents to your mortgage broker so their pre-approval can accurately calculate your purchasing power. This will give both you and your realtor peace of mind so that you know you’re shopping for a property within your budget.
Know your rate. Know your products.
There are so many rates, terms, conditions and fine print out there when it comes to mortgage products. A great rate is often the key focus but make sure your mortgage broker has explained all of the fine print. How much extra can I pay on my mortgage each month? Each year? What is my penalty to break the mortgage and when does it apply to me? How long am I guaranteed this rate? 90 days? 120 days? These are all questions you’ll want to make sure you’ve asked your broker. Then you know exactly what you’re dealing with when you’re shopping for that new home in Calgary.
Communicate with your broker
A mortgage has quite a few moving parts. The last thing anyone wants is a surprise. Good communication is the key. If you are uncertain about any aspect of the transaction, ask. Don’t assume! You have a broker, lawyer and real estate agent working for you. Use these resources to stay informed and keep through the process. Further, if anything changes for you, like employment or down payment, or potentially the type of property you’re considering, check in with your mortgage broker and make sure this doesn’t change your rate, product or purchasing power.
Lenders are required to calculate line of credit and credit card debt as if the client was obligated to pay 3% of the current balance each month. For example, if you have a credit card with a balance of $10,000, lenders need to calculate a payment of $300/month when deciding how much you can borrow, (even though your minimum payment is likely only $80/month). Working with a mortgage professional that has a firm understanding of how to restructure debt can greatly benefit your mortgage file. Rolling Credit Cards or Lines of Credit in to “Term Loans” or considering products like a cash back mortgage can help to decrease the perceived monthly obligations and add thousands of dollars to your maximum borrowing power.
Related Calgary Mortgage Blogs
As if deciding to have a fixed rate or a variable rate on your mortgage loan is not stressful already, let’s add a pandemic into the mix, which only makes this decision more complicated for Calgary homebuyers. Before we dive into that subject, we will explain the...
Let’s face it, paying tax is no fun and we all want to work to pay as little tax as possible and take advantage of tax savings where we can. During tax season, every year, it’s important to consider anything that could be a write off against your income. One of the...
Have you ever wondered what lenders base their decisions on when it comes to approving or rejecting a mortgage application? The requirements can be different depending on the lender at which your loan will be approved. That being said, there are two calculations...