When our clients are ready to purchase a home (especially first time home buyers), it makes sense to begin from the strongest negotiation position possible, obtaining a pre-approved mortgage will demonstrate to home sellers that you're VERY serious about purchasing a home, and will give you an edge of buyers who haven't gone through this process, especially when you're competing in multiple offers for a home. By filling out this mortgage pre-approval form (below) our mortgage partner will be able to get the process started (without any signatures or obligations) but as a means to get you started on the right path to home ownership! Once completed, our Calgary mortgage agent will reach out and let you know how much house you can afford, allowing you to hit the market with one of our agents and start browsing for your new home right away!

Our mortgage partnerships have been strategically crafted to give our clients an advantage! This means you'll have access to fast, easy to understand terms, and exclusive rates! Our mortgage partner routinely beats the rates offered from our clients own banking institutions. These lower rates mean you'll either A) Get more house for the same monthly payments or B) Pay less for the same house on a monthly basis. 

Take 30 Seconds to fill in the pre-approval form below and get started today with no obligation!

Factors in obtaining your Calgary mortgage pre-approval

The following list of factors can help determine, and play a role in discovering how much of a mortgage, and at what rate, you'll be pre-approved for by one of our talented Calgary mortgage professionals.

1. Your Credit Score

Your personal credit score is a measurement of your health financially, and demonstrates to lenders what type of risk you may or may not pose. When your credit score lands between the upper 600's and 900, you’ll likely qualify for a mortgage with an “A” level lender, such as a major bank.

If your credit score lands below 680 but is above 600, lenders will then proceed to look into the other details of your finances to determine if you can obtain your mortgage qualification with an “A” level lender or not. In the event that you don’t qualify, you’ll need to go through a “B” level lender, such as Home Trust, to get a mortgage pre-approval.

When your credit score falls below the 600 score mark, you will only be able to qualify for a mortgage with “B” level lenders, and you likely won't be able to take advantage of the current BEST mortgage rates.

2. Down Payment

The down payment is the lump sum of money that you will put towards your homes purchase. In Canada, there are 0% down payment programs, but traditionally the minimum down payment you must make on a mortgage is between 5% and 20% of the properties purchase price. In a situation where you are putting down less than 20%, you’ll have to also be prepared to purchase mortgage default insurance to insure your risk and protect the lender in case you default on your mortgage.

The amount of your down payment can affect how much you are able to borrow. An example, if you were looking to purchase a house worth $400,000, you would require at least a $20,000 down payment. 

$400,000 x 5% = $20,000

Minimum down payments in Canada:

The lowest down payment in Canada is 5% this is for homes that cost less than $500,000. For properties that are priced between $500,000 and $1 million dollars, you are required to put down 5% of the first $500,000, along with 10% of any amount over $500,000. For example, a house worth $700,000 would require a down payment of at least $45,000.

($500,000 x 5% = $25,000) + ($200,000 x 10% = $20,000) = $45,000

For homes that are priced over $1 million, a down payment of 20% is required.

3. Debt Service Ratios

Your debt service ratios are calculations that a lender would utilize the determine the biggest monthly mortgage payment you would be able to afford. This is based off of your current income (monthly) and reflects your expenses and total debt obligations. 

Lenders will utilize these calculations and ratios to ensure you are able to afford and make your monthly mortgage payments, along with all of your other financial commitments, this ensures that there is a much smaller risk that you would potentially default on your mortgage.

4. Supporting Documentation

This is wholly dependent on the mortgage broker or lender that you choose to work with, however, there will always be some level of documentation that you will need to provide for your Calgary mortgage pre-approval. For example, there are some mortgage brokers who require clients to provide them with proof of their income for a mortgage pre-approval. Other lenders may not require proof until your offer has been accepted and you're in the finalizing stages of your purchase. 

Below is a list of possible documentation that you may need to provide for your mortgage pre-approval in Calgary:

  • Identification (eg  Passport or a Canadian driver license)
  • Proof of income (This can include pay stubs or a letter from your employer, or could also come in the form of a notice of assessment if you are self employed)
  • Duration and documentation of time with your employer
  • Proof of down payment and ability to pay closing costs 
  • Proof and verification of other assets (cars, boats,etc) 
  • Details and/or information about other various debts including:
    • Credit cards or lines of credit
    • Spousal or child support payments
    • Car leases or loans
    • Personal loans
    • Studen Loans

Ultimately, the five biggest factors that count the most when lenders are evaluating whether you qualify for a mortgage loan are:

  • Your income
  • Your debts
  • Your employment history
  • Your credit history
  • Your identity
  • Your property value

Once you understand how a mortgage lender will review your loan application, it is easier to see your own strengths and weaknesses as a loan applicant. 

A stronger loan application will typically include these:

  • A housing expense ratio no greater than 32% (Now optional) (the lower the ratio, the better)
  • A debt-to-income ratio no greater than 44% (the lower the ratio, the better)
  • The home buyer has steady income - ideally, the same job for two years or longer
  • The home buyer has good credit (bills have been paid on time)
  • The house is worth the price the buyer is paying
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