3 Best Practices in Applying For a Mortgage in Canada Faster
Owning a home is both an achievement and an investment. But for first-time home buyers, it is a challenge to get approved for a mortgage that could help them in owning a home faster and easier. However, there are many ways to expedite the process of applying for a mortgage, and all it takes is a bit of hard work and knowing the system by heart. Here are some things applicants can do to get approved for a mortgage faster.
1. Build a Good Credit Score
A good credit score is one of the requirements for getting a mortgage approved. A good score shows the lender that you can pay back your debts and handle your finances well. Therefore, it is essential to have a good score and build it up before you start applying for a mortgage.
There are multiple ways to build a good credit score, but having a record of paying back all your bills and loans on time, using a credit card, and getting all the other insurance products can build a good score. If you have a bad credit score and are looking for ways to improve it, you can get some assistance from a credit card debt relief program to help you deal with bad debts and improve your credit score.
2. Offer Bigger Down Payment
For most homeowners, the only way to buy a home is through a mortgage. A mortgage is what will help homeowners pay for their homes, and the lender will give the homeowner a certain amount of time to pay off the loan. Therefore, home buyers must make a larger down payment when applying for a mortgage. The bigger the down payment, the easier it is for the lender to approve your application.
However, it is also important to note that you don’t need to spend much money just to get a mortgage approved. Most lenders allow applicants to put down less than 20 percent of their down payment. The rule only applies to people who don’t want to pay Mortgage Default Insurance, the insurance product the lender will require you to pay to cover your mortgage loan balance.
3. Keep Income Stable
Another essential requirement for getting a mortgage approved has a stable income to pay the mortgage loan. It is an expectation for most lenders to approve applicants who have a steady source of income, whether it is a monthly salary, a fixed deposit, or a deposit from a pension or retirement fund.
However, the applicant shouldn’t have mortgage payments that are too high and that it would be too much for the applicant’s income to handle. Applicants with a lower income are at risk of disqualification. If the applicant has a high income and a big loan, the mortgage payment could be too much for the applicant to handle, leading to foreclosure. On the other hand, if the applicant has a low income and a limited loan, it could be challenging to have a stable income to pay off the mortgage loan.
THE BOTTOM LINE
Applicants need to know the proper steps to take to get approved for a mortgage. As applying for a loan can become competitive, it's only suitable to establish a good standing among financial institutions. It is not only a way to get faster approval for loans but also maintains a strong relationship with them which can become helpful for future transactions.
Level Up Mortgages offers alternative lending options for clients in Canada. Our goal is to make applying for financial help more accessible and faster by making sure our steps are easy to do and quick. We look forward to meeting first-time homebuyers and helping them achieve their dream homes today. Learn more about mortgage strategies in Canada by browsing our website.