Unless you’ve saved up a significant amount of money and are buying your new home in cash, you’ll need to apply (and get approved for) a mortgage.
There are several steps that you need to follow in order to get a mortgage in Canada successfully. Missing just one of these steps could put your application in jeopardy and prevent you from getting a mortgage to buy your dream home.
Here are three important steps that you need to take to successfully get a mortgage as a Canadian resident.
Contact a mortgage lawyer
A mortgage lawyer is a legal expert that knows the legal rules and regulations around mortgages inside and out. They can help you with a wide range of mortgage-related activities, including:
- Reviewing mortgage documentation
- Negotiating mortgage loan terms
- Helping to find the best mortgage rates and deals for you
- Resolving mortgage disputes and navigating legal issues relating to mortgages
- Helping you to comply with national and local mortgage laws
Make sure you choose reliable and credible lawyers in your area to make the home buying process simple. For example, if you live in Calgary, search for reputable Calgary mortgage lawyers that can put you in the best position to get your loan approved quickly.
Improve your credit score
Mortgage applications are largely dependent on your credit score (as well as your annual earnings). In Canada, credit scores are ranked between 300 and 900, with a higher score being better than a lower score.
The ranking that you fall into depends on your financial history. If you’re in a lot of debt or consistently pay your credit card bills late, you’ll likely have a poor credit score. However, you should have a decent credit score if you’re always on time with your payments.
If you’re not sure what your credit score is, contact your bank or use a reliable company to assess your finances and give you a detailed credit report. To improve your credit score, make sure to pay your bills on time, get yourself out of debt, avoid overspending, and don’t apply for more credit than you need.
Start saving for your deposit
You’ll need at least a 5% deposit to buy a house in Canada. Ideally, you should save up a 10% deposit (that is, 10% of the total cost of the home you’re buying) to be in the best position when placing offers for different properties.
The higher your deposit, the lower the amount of money you’ll need to borrow, and the less you’ll end up paying back overall. Your mortgage is more likely to be approved when you’re asking to borrow less money too.
Start saving as early as possible to build up a significant deposit. Stay organized with your finances to ensure you can set aside at least a small amount of money each month to put toward your deposit.