How to get pre-approved for a mortgage in Canada

Welcome to Homebuyer's School brought to you by Brookfield Residential So hi everyone, and welcome to another edition of Homebuyer's School Today I'm joined by Mujtaba Syed, Mobile Mortgage Specialist with TD Canada Trust, and today the question we're gonna answer is, "How to get pre-approved for a mortgage in Canada

" So Mo, how do we get pre-approved for a mortgage? Karl the best way to get pre-approved for a mortgage is to reach out to your bank, to your mortgage broker, book an appointment with them and kind of sit in, and just work your numbers, work the application to see what your pre-qualifications are Any bank? Any bank that you're comfortable with Someone that you have a relationship would be ideal Someone that kind understands where you're coming from So how do I apply for a mortgage in Canada? The best way to apply for a mortgage is to book the appointment with the mortgage specialist, someone who specializes in mortgages

Sit down with them, have the appointment It should be a fairly decent deployment, should be very lengthy shouldn't be less than an hour to go over all your needs You should be able to bring in your documents with you that includes any income documents, anything that you think you might need for mortgage pre-approval The specialist at that time could even advise you what you need prior to the appointment so you know you're not missing anything Can you break down some of the steps for pre-approval? Yeah, absolutely

The first step we definitely do is we actually look at your credit Credit's a big part of getting pre-approved for a mortgage It kind of gives a bank an idea of your paying habits Technically we look at it as more like a character thing So it's more of when you promise to pay something we want to make sure that you actually stay on top of your payments- That's definitely the first step, and then second step we look at your income

The reason why that is so important is we need to know that you can actually service the mortgage with your current debts that you might have or any financial obligations you might have So we look at that and then we also look at your down payment which is also very important to kind of see how many savings you have, what kind of saving habits you might have, so in a way we can look at credit, what you think that you might get pre-approved for, depends on the house you are looking for as well, your income saving habits, a whole bunch of different things Do you require access to like the financial records of people? In terms of when you're looking at in terms of maybe their credit score or their income or so on? Yeah, for financial records I guess, for most average people, will look at income statements so that could be your recent pay stub, it can be a job letter, it could be direct deposits going into your account, what's your income We could also look at your year-end statements to kind of see if you're making any overtime, you might have some bonuses, you might have some shares or anything in the company so it could be a factor of both and ideally if you would like to get the most income as possible, which it really does help you qualify for a mortgage So when we talk about income, does that include- is there a difference between a full-time job, how about people who are consultants or have their own company, does that have any impact? Yes, absolutely

So if you're a full-time employee it all comes down to your debt servicing So you could be a part-time person or a full-time person but if the income is there to qualify for the certain amount that you're looking for it doesn't really matter Start times could matter if you've started and you're still on probationary period with your employer, that could definitely effect If you're self-employed we actually like to take a two-year average for self-employed or contractors we kind of look at them as self-employed as well, because their income can fluctuate, you can vary when the banks actually want to see like a two-year kind of like an average, to see how the income has been the last few years Is there a difference between mortgage specialist- I mean like applying for mortgage specialist with a bank versus an independent company? Yeah, a little bit so applying what the mortgage specialist with a bank is you're dealing with the bank employee, so you're dealing with someone who is very familiar with bank policies, bank procedures -someone who has direct access to the employees at the bank as well which are the underwriters which is someone that is going to look at your deal, someone was going to approve your deal, is also- they work for the bank

So they have direct access to the underwriters, they have direct access to any other bank, different groups of the bank that they might need to reach out to regarding your accounts and you might need, anything like that, and the biggest difference I find between a mortgage specialist at a bank and a broker is a mortgage specialist at the bank, they kind of have to go through constant learning on a yearly basis We have to go through annual courses and annual certifications and we also know our bank policies inside and out because banking as a financial institution, the industry is constantly changing So it means policies are changing procedures are changing and once you kind of focus you kind of become that specialist Going back to some of the steps in terms of getting pre-approved for a mortgage, do you also need some sort of collateral? That like, whether it's a personal asset in terms of getting mortgage? Absolutely, so in the mortgage process the collateral is actually the house you're looking at buying So that is going to be the collateral that you do so we will- the bank will actually use that as a collateral

Okay Do you have any other things to add in terms of getting pre-approved, how to get pre-approved? I would recommend when you do look at getting pre-approved for a mortgage definitely, definitely do your research and the people that you're talking to- a specialist or the independent broker, it should be someone who is willing to work for your best interest in mind right So checking who has the best interest for you, who's going to work hard for you Everyone's situation is a little bit different, not everyone is 'cookie cut' is what I'll have to call it I used to really kind of take an interview of the person that's gonna be working for you like as you might be taking an interview for someone else or someone's gonna be- like a real estate agent? Correct

Doing that is because the financing part is just as important as the home buying or finding part Okay, perfect Well thank you very much for the information Thank you everyone for joining us, and we'll catch you next time That's another edition of Homebuyer's School

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