Everyone wants the best rate. It’s incredible to think that the best rate comes with a price. That price is insurance. But nevertheless you get a deep rate discount when you get an insured mortgage and you have these 3 important factors.
- Income: You have proof of employment income and usually they like to see tenure. Be there for at least 2 years. Some exceptions do exist I would say I’m a Broker that would ask a lender to waive if income was less than this 2 years. Example, a borrower just fine post secondary education.
- Credit: oh boy! This has changed since I began doing mortgages. To check your bureau quickly and for free go here. When we pull your credit we get a number between 0 and let’s say 900. We would need you to have this Credit Score over 600. Sometimes 680 depending on the situation.
- Down payment: this amount needs to be 5% of the purchase price. Up to 19.99% of the purchase price. If you put 20% you are not going to be insured. You will move to uninsured. This amount can be gifted from an immediate family member with a gift letter and proof of deposit. It best comes from 90 days of this money down saved in the account. RRSP’s can be used as a down payment.
There are as always other situations and hurdles that come up when obtaining, processing and funding your mortgage. Always make sure you communicate with your mortgage Agent/ Broker, as they provide numbers and your conditions of your approval.
6 responses to “The 3 Most Important Factors That Determine Your Mortgage Approval”
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