How to get approved for your new home mortgage.

Here are the three items that are reviewed by lenders when they are considering you for your mortgage approval:

1) Credit Score

You need to have 3 sources of credit in good standing over a two-year span to establish your score and acquire your pre-approval for your home purchase.  Let us show you how to obtain or improve your credit.  We can show you how to work your credit cards to your advantage, and use the point and cash back incentives many of them offer.  If you are disciplined when managing your credit you will find the rewards great!

2) Down Payment

A large down payment helps you avoid unnecessary expenses.  CMHC insurance is required for any mortgage that is greater than 80% of the value of the home and is a one-time fee that is added to your mortgage and can cost you thousands.  With a down payment of 20% or greater you can currently amortize your mortgage over 30 years and keep your monthly expenses low.  For investment properties, making a large down payment is vital to maximizing your monthly cash flow.

3) Income

Of course, having a large income increases your chances of obtaining a mortgage.  Although every lender is different, most lenders look at you annual income, minus current expenses, to formulate a percentage-based number.  They use this number to determine what you can afford.  If you are self-employed be prepared to provide two years notice of assessments to help show consistency in your annual income.  On salary or hourly?  You will need to provide pay stubs as well as a letter of employment.

Remember:  In order to qualify for a mortgage, you will need to be strong in at least two of these three categories.


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