Mortgage Pre-Approval is your first step towards home ownership, and Mortgages by Candice with The Mortgage Group is pleased to have the opportunity to start you through the process. Our mandate is to make sure you completely understand your chosen terms and conditions, and customize your mortgage to work for you.
Mortgages by Candice will:
Discuss alternative Pre-Approval options such as Pre-Qualification Agreements and Rate Holds, and begin looking in to what type of mortgage will suit your lifestyle best.
Filling out the information required in the primary mortgage application form doesn’t necessarily mean that you can start contacting realtors. Once you receive your quote you then need to find a lender – and that’s where the specialists like Candice Light come in.
The Mortgage Group has developed partnerships with a number of lenders, and our Accredited Mortgage Professionals can provide a “one-stop-shop” experience where you can compare several offers side-by-side.
Click on a [+] sign below to view detailed information about the Mortgage Pre-Approval Process.
Who Can Apply For A Mortgage?
All Canadian residents of legal age with an active bank account can apply for pre-approval for a mortgage or a mortgage.
Filling out the information required in our primary Mortgage Assessment form doesn’t actually mean that you can start contacting realtors. Once you receive your quote you then need to find a lender – and that’s where the specialists at The Mortgage Group come in.
“As accredited mortgage brokers we have access to myriads of contacts and resources to find you the most competitive rate, and we will tailor your mortgage to fit your lifestyle and assist you in reaching your goals.”
How Does Mortgage Pre-Qualification Work?
This is a simple procedure where you provide a lender or broker with financial information such as assets, income and debt. A pre-qualification provides a simple estimate of the amount of mortgage you may qualify for, and does not take in to account credit card ratings.
What Is A Mortgage Pre-Approval?
Pre-Approved Mortgages are tentative agreements supplied by lenders that outline the terms of the mortgage for which you have qualified. Real estate professionals generally require a pre-approval before they will begin hunting for your home to ensure they show you appropriately priced options. A pre-approval gives you a head start in the home-buying process, and outlines in detail the costs you can expect.
What Is A Rate Hold Agreement?
For those not quite ready to start the mortgage application process, consider a Rate Hold Agreement. Lenders can hold a fixed rate, or the spread on a variable rate, for up to 120 days from the date of request. Mortgage brokers have the added benefit of being able to provide clients several different rate holds at one time.
If you provide the down payment for that mortgage within the agreed length of time you will receive the rate you were quoted.
When you finally find the home of your dreams, your lender then needs to ensure that the property meets certain condition standards and will also evaluate the market value of your home before final approval is made.
Who Can Afford A Mortgage?
The general rule of thumb is that your bills, mortgage and monthly housing costs should not amount to more than 35 per cent of your gross family income. To calculate this number, add up all of your monthly property-related bills including projections for expenses such as utilities and property taxes. Then divide that number by your monthly income and multiply by 100. This number is known as your Gross Debt Service (GDS) ratio).
To further test your resources, a second general rule is that if your current monthly debt (including your credit cards, lines of credit and car loans) amounts to more than 42 per cent of your income, you should look at ways to reduce your debt before house hunting. This number is referred to as your Total Debt Service (TDS) ratio.
What Information Will I Need To Apply?
Be prepared to provide the following information (for each borrower if there is shared property) when applying for your mortgage.:
- Social Insurance Number
- Current address. If less than three years were spent at this residence a previous address will be required.
- Current and previous employment information (if current employment is less than three years).
- Verifiable income such as a pay stub or bank statement.
- Value of all assets not including the home, such as vehicles, RRSPs and savings accounts.
- Recent mortgage statements.
- Recent credit card statements.
- Recent loan statements, including lines of credit, car loans and student loans.
- Estimated value of your home.
- Housing expenses (utilities, property taxes etc.)
What Mortgage Information Do I Need To Provide?
You will be asked to provide information on the type of mortgage you are interested in, such as:
- The amount of the mortgage you are applying for.
- The value of the property you wish to buy.
- Your down payment amount.
- Whether the mortgage is for purchase, renewal or refinancing.
- The type of property and address.
- Expected annual property taxes.
- Annual condo fees, if applicable.
- Annual utility costs.