Five Important Tips When Preparing For A Mortgage

If you’re in the market for a new home, congratulations! Purchasing a home is an exciting time. However, it can also be a bit overwhelming, especially if you’re a first-time home buyer. There’s so much to think about and keep track of, from getting pre-approved for a mortgage to closing on the deal.

To help make the process a little easier, I’ve put together some tips for home buyers, from pre-approval to closing. I’ll cover everything from what you need to do to get pre-approved for a mortgage to what to expect at closing and more. So whether you’re just starting to look for a new home or you’re ready to sign on the dotted line, read on for some helpful tips.

Tip #1: Get a mortgage pre-approval
Mortgage pre-approval is a way to get an estimate of how much you would be able to borrow for a mortgage. This can help you know how much house you can afford and give you an idea of your monthly mortgage payments.

Tip #2: Ensure a minimum 20% down payment
When you make a down payment of at least 20% on a home, you avoid paying for private mortgage insurance. You also gain equity in your home from the start, which can give you an advantage when you sell. In addition, a larger down payment could get you a lower interest rate on your mortgage.

Tip #3: Prepare 1.5% closing cost
If you want the best mortgage rate and terms, it’s a good idea to prepare 1.5% of your home’s purchase price for closing costs in advance. This way, you’ll have the funds available to cover any last-minute repairs or improvements to your home before closing, and you’ll be less likely to be caught off guard by unexpected costs during the mortgage process.

Tip #4: Prepare supporting documents
If you are self-employed, it is imperative to have all your business documents in order before applying for a mortgage, as it will give the lender a clear picture of your business and its financial health. This will help the lender determine whether or not your business is a good risk for a loan. Also, having all of your documentation in order will help the process move along more quickly. The lender will not have to spend time chasing down missing information, which could delay your mortgage approval. A well-organized mortgage application shows that you are a professional and that you are serious about your business. This can give you a leg up in the competition for a mortgage.

Tip #5: Be employed for at least three months
As an employee, you will need to show your proof of income to the lender to get a mortgage. Most lenders generally require that self-employed applicants have been running their business for a minimum of three months to prove that their income is stable.

For more useful mortgage tips, reach out to Patrick Tang at Mortgage Architects - mortgage by Patrick Tang. I have clients who come from various industries and every situation imaginable. No matter who the mortgage is for, the reason for it, or the amount, I ensure everyone receives the highest quality service and due diligence.

My services are extended to clients across Richmond Hill, Toronto, Unionville, Markham, Newmarket, Mississauga, Vaughan, Pickering, Brampton, and surrounding areas.

Get in touch with me today!
To learn more about the services I offer, please click here. To get in touch with me, please click here or call me at (647) 308-3234 or email me at patrick.tang@mtgarc.ca.