A Beginner's Guide To Applying For A Mortgage
When it comes to applying for a mortgage for the first time, it’s important to understand all of your options. The world of mortgages is comprehensive and can be confusing to those looking to purchase their first home. Enlisting the help of a mortgage broker can help first-time homebuyers feel confident in their financing options and choice.
By hiring a mortgage broker, you’ll have access to products beyond your bank, ultimately giving you more freedom to choose. With experience on their side, mortgage brokers can help first-time homebuyers, as well as repeat clients, understand how the process works and which products are best for their unique situation.
At M.O.S MortgageOne Solutions Ltd., we explain to all our clients, especially first-timers how the entire process works, what documentation is required, and how to apply for a mortgage. Here’s a brief rundown of how the mortgage process works:
Getting Started: Organize your Financial Documents
Getting a mortgage by yourself is tough, so we recommend using a mortgage broker, no matter how capable you believe you are.
The first steps for anyone applying for a mortgage, whether on your own or through a broker, is to gather your financial documents. These include:
- A copy of your latest pay slip
- Your T4
- A letter of employment
- Your T1 - General Income Tax Form
- Notice of Assessment
- Proof of any other sources of income
- Proof of your down payment (for example, a savings/investment statements, a gift letter if someone is giving you the money for your down payments, and/or proof of withdrawal from an RRSP)
Next Step: Passing the Stress Test
Starting in January 2018, a mortgage stress test is now compulsory. As you begin the application process, one defining factor for its approval will be how various factors, including your household income and down payment amount, hold up through the mortgage stress test.
Any home purchase requires a downpayment. The higher the down payment, the greater your chances are of avoiding the mortgage stress test. To understand how much of a down payment you can make, your mortgage broker can help you go through your financial documents to determine what you can afford.
The team at Mortgage One Solutions ensures you understand how each financial component affects your application and what are the ways around the test.
Getting Approved: Fundamentals for a Successful Mortgage Application
Brokers are always available to answer questions and genuinely want to help you. A good mortgage broker will do everything they can to squeeze you into the box set by the government by using any tools and exceptions available. When working with a mortgage professional, you will not have to navigate the mortgage process alone. They will help review your income, down payment, and confirm affordability.
Listen to the advice your mortgage broker gives. If it is not possible to qualify for a mortgage now, by following their advice, you could qualify for the mortgage you want in the future. Or if you work closely with the broker, they will help you find a mortgage product that fits within your financial abilities.
If you plan on going ahead and obtaining a mortgage by yourself, we strongly suggest that you at least have it reviewed by a professional. We can review your application before it is seen by any bank and possibly correct any errors before it is sent to the bank. These corrections could be the difference between a successful application or getting declined.
Improve your Odds: Avoid This Major Mortgage Mistake
In a lottery, purchasing multiple tickets increases your chances of victory. However, when it comes to mortgages, multiple applications often do more harm than good. Multiple applications mean your credit scores are pulled numerous times, affecting your score each time. In addition, multiple applications usually also cause conflicting information which can hinder your mortgage application. The bottom line? Hire a mortgage broker to help you do it right, the first time.
The Final Point: Seek Professional Guidance
Mortgages are complicated and the process is difficult to understand without guidance. While there are the odd individuals who successfully obtain a mortgage on their own, most fail, delaying their dream of owning a home.
If you’re seeking a mortgage, our advice is: Don't try to do it on your own. Chances are, you aren’t aware of the different products and options. A bigger mistake would be seeking advice from a bank; they will offer you a product that only benefits them. Using an experienced mortgage professional is the safest and most ideal way to go about getting the mortgage that’s right for you and your family.
If you’re planning on obtaining a mortgage, reach out to M.O.S MortgageOne Solutions Ltd. As the qualified mortgage brokers serving Mississauga, Burlington, Oakville, Georgetown, Milton, Brampton, North York, Yonge Street and West Toronto, we have access to products you won't find anywhere else. We offer the best rates in the industry and exceptional customer service. We work with numerous lenders and strive to convert even the most challenging cases into successful mortgage bids.