Before you start shopping for your property, it is a good idea to make some preparations.
Get Pre-Approved.
It’s a good idea to get pre-approved for a mortgage before starting to look for a home. This will help guide your search and allows you to understand your affordable price range, along with interest rates and future monthly mortgage payments.
Bring the following information when you meet with your lender or mortgage broker ––
- Government-issued Photo IDs with your current address
- Void Cheque or Pre-authorized Debit Form
- Letter of Employment & Employer Contact
- Proof of Income; two most recent Pay Stubs & T4s along with Notice of Assessments
- Proof of Down Payment & Closing Costs (amount and source)
- Proof of Savings & Investments
- Details of current debts & other financial obligations
If applicable, also include ––
- Canada Child Benefit Statements & Proof of Deposit
- Recent Mortgage Statement or Renewal Agreement for a current property
- Recent Property Tax Statement showing payments are up to date
- Active Rental Leases on properties you own
- Separation Agreement
- Business Owners;
- Business Registration or Articles of Incorporation
- Three years of HST Returns
- Two years of Company Financial Statements & T1 Generals
Know Your Credit Score.
Your credit score will have a huge impact on what type of property you can buy, and at what price. It is first recommended to check your credit rating with an experienced lending institution so that we can determine what you can afford. The lender will research your credit ratings from credit reporting agencies such as Equifax and Trans Union. We will be happy to recommend experienced, knowledgeable lenders in the residential, construction, and commercial and investment real estate fields.
Mortgage Loan Insurance.
If you plan on providing less than 20% of the down payment, you will need Mortgage Loan Insurance. This protects banks and other lenders against the risk of default, similar to property insurance which protects you in case of loss. In general, the smaller the down payment, the higher the insurance premium will be.
Be Careful With Your Finances.
Now is not a good time to make sudden career changes or large purchases. You want to approach your property purchase from a position of financial stability.