Five Tips To Prepare You For A Mortgage Application

Applying for a mortgage can be a daunting task, especially when dealing with traditional financial institutions. That’s where Vic Lehan & Associates, your licensed mortgage professionals in Leamington, Ontario, come in. We understand that each mortgage application is unique, and we’re here to guide you through the process, even if you’ve faced challenges with banks in the past. With our extensive experience and personalized service, we aim to match you with the right mortgage solution for your specific needs. In this blog, we’ll share five valuable tips to prepare you for a successful mortgage application.

Tip #1: Understand the Key Components of a Mortgage Application

A mortgage application comprises three vital elements: the downpayment, total income, and credit. As mortgage professionals, these are the areas we focus on when assessing your eligibility. Understanding these components will help you prepare for the application process more effectively.

Tip #2: Gather Detailed Income Information

When submitting your mortgage application, it’s crucial to provide detailed income information for the past two years. This includes employment income, self-employment details, and other sources such as Child Tax Benefits or pension income. While these are the primary income sources, it’s essential to disclose any additional relevant details.

Tip #3: Save for a Suitable Downpayment

To secure a mortgage, you’ll typically need a minimum downpayment of 5% of the purchase price, along with an additional 1.5% of the purchase price for closing costs. These costs cover legal fees, taxes, and appraisals if necessary. A larger downpayment is beneficial as it reduces your mortgage payments. It’s important to demonstrate the source of your downpayment, whether it’s from savings, investments, or assistance from family members.

Tip #4: Maintain Good Credit Health

Credit plays a significant role in your mortgage application. Lenders will conduct a credit check to assess your creditworthiness and repayment history. Many individuals worry that multiple credit checks can harm their credit scores. However, according to Equifax, one of Canada’s major credit bureaus, you have a 45-day “window” during which credit inquiries related to mortgage financing won’t affect your score. However, it’s important to avoid seeking various types of credit in a short period, as this may indicate potential financial instability.

Tip #5: Understand Real Estate Agent Agreements

When working with a real estate agent, it’s crucial to comprehend the terms and conditions of any agreements you sign. Some agents may request a “Buyer Agency Agreement,” which can benefit both parties involved. This agreement states that you will exclusively work with the agent for a specified period to help you find a suitable property. Familiarize yourself with the terms and duration of such agreements to make an informed decision.

I’m Vic Lehan, Leamington, the area’s longest-running mortgage agent. Since 1999, I have proudly served clients throughout Essex County, Windsor, and beyond from my base in Leamington. With a commitment to personalized service, extensive industry knowledge, and a strong track record, my goal is to find the right mortgage solution for you. Remember, mortgages are not one-size-fits-all, and that’s why I diligently search through multiple lenders to ensure your needs are met.

If you’re ready to learn more about the services we offer at Vic Lehan & Associates, please click here. To get in touch with us, feel free to call (519) 326-6410 or email vic.lehan@mtgarc.ca. Don’t worry about banking hours—we’re available whenever you need us.