Applying for a Mortgage
The process for applying for a mortgage is pretty straight forward. Like any application for credit, we need your personal information (name, birthday, address, employment etc) in order to be able to pull a credit bureau. The bureau is an important part of the process. It will determine more than anything else, the type of loan we will be able to arrange for you. The better your score, the more options you will have open to you.
Once we know your monthly debt obligations from the bureau, we can determine your debt servicing ability. Deducting your debts from your income, tell us how much of a mortgage you can afford. If you want to get a bigger mortgage, you either have to have more income or less in monthly payments. Paying off loans or credit cards will increase the amount of the mortgage you qualify for, its simple math. One of our mortgage brokers will give you all your options to help tailor a mortgage that works for you.
Applying for a Mortgage When You are a Property Virgin
When you apply for a home loan as a first time buyer it may seem like an overwhelming process but it is really no different than applying for a credit card. The lender is going to look at your willingness to pay (your credit history) and your ability to pay (your income); its really not a complicated or difficult process. The third leg of course is the collateral; what are you buying and do they want to put a mortgage on it.
One of the big criticisms we get from clients about their banks, is the lack of information. When they get turned down by their bank, they don’t know their next step, how to fix the issue or in some cases what the issues even were on their application. A lot of clients don’t qualify immediately, they need to work on their credit or situation a bit to get over the mark. We will work with you to fix any issues that you might have and get you qualified sooner than later.
What You Need to Get Pre-Approved For a Home Loan
There are certain documents that we will need to do a proper pre qualification for you. Income documents and proof of down payment. The down payment docs are very straight forward, so we will start with those. We need to confirm that you have had your down payment for a minimum of 90 days. We do this by getting 3 months of bank or investment statements.
If your down payment was gifted, we just need a gift letter filled out and we will (in time), need to see the gifted funds deposited into your account. The gift must come from an immediate family member or from a spouse (with explanation of why the spouse is not on the mortgage)
For income verification, a job letter and paystub will suffice for most clients. However, if you are self employed, commissioned, part time, work a lot of overtime or new on your job the lender will need to see 2 years of notice of assessments and T1 Generals. A two year average of your income is a common way lenders determine your usable income.
This process may seem complicated, but we will walk you through the process and educate you on why the lenders are asking for the documents they want to see.
If you feel like you are ready for home ownership here in Edmonton, the first step is to apply for a mortgage, contact us today. We will walk you through the application right up to the day you take possession of your new home!