Understanding the world of mortgages can be overwhelming, especially when faced with time constraints, so we decided to ask the experts: How can I speed up the process and get the best mortgage rate?
If you are in the market for a home, getting pre-approved speeds the process and can eliminate headaches down the road, says Matthew Field, a builder mortgage specialist with Home Loans Canada.
"There is nothing worse than buying your dream home and finding out you can't qualify for the mortgage.
Find out how much you can qualify for so you know exactly what you can shop for," says Field, who also recommends buyers do their homework before they sign on for a mortgage.
"Take the time to learn about mortgages. There are so many mortgage products out there and you need to choose one that works for you.
Have your mortgage specialist educate you on the pros and cons of variable versus fixed, open versus closed, prepayment options, terms, payment increases and so on.
"Ask as many questions as you need."
Ensure you are fully aware of what pre-approval means when shopping for your new abode, says Trish Hart, an accredited mortgage professional with Invis.
"A mortgage pre-approval can be a broad term. With some banks it is no more than a rate hold. With other banks they will do the preliminary underwriting on a pre-approval.
"It's important to have as many conditions of a mortgage approval complete as possible, prior to completing a purchase agreement."
So how do you prepare for a pre-approval?
"It is imperative to have your down payment in place. Make sure your down payment is in the form of liquid assets, which is cash in the bank. The buyer should be able to write a cheque to back up the purchase contract."
Secondly, make sure you have all of the necessary documents at your disposal.
"Be prepared to provide documentation to verify your income and employment. A letter from your employer and last year's Notice of Assessment will usually do as well as the source of your downpayment," says Field.
Outstanding credit cards or personal loans should be paid off should you need to obtain a specific amount, says Hart.
"If a client is required to pay down a credit card in order to qualify at a particular mortgage amount, it is wise to have the account paid prior to writing a purchase contract."
