{"id":17247,"date":"2023-01-09T01:20:17","date_gmt":"2023-01-09T01:20:17","guid":{"rendered":"https:\/\/hypotheques.ca\/blogue\/comment-savoir-si-mon-pret-hypothecaire-sera-approuve\/"},"modified":"2023-07-19T19:40:35","modified_gmt":"2023-07-19T19:40:35","slug":"how-do-i-know-if-my-mortgage-will-be-approved","status":"publish","type":"post","link":"https:\/\/hypotheques.ca\/en\/blog\/how-do-i-know-if-my-mortgage-will-be-approved\/","title":{"rendered":"How do I know if my mortgage will be approved?"},"content":{"rendered":"
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How do I know if my mortgage will be approved?<\/h2>\n

The first step to buying a home on credit is to get approved for a mortgage. Some Canadians mistakenly think that having a solid credit history is enough. However, there are many other factors to consider. How do you assess your chances of getting approved for a mortgage? This article should help you understand this question.<\/p>\n

Mortgage approval: what to look for before approving<\/h3>\n

It goes without saying that your\u00a0credit rating\u00a0is an important element of your borrowing profile. But the\u00a0debt ratio is also a crucial parameter for evaluating the strength of your file. Since the repayment is in some way guaranteed by the mortgage\u00a0registered on the property purchased, the bank will also verify that it is and will be able to cover the amount of the mortgage loan with the help of the supporting documents that you will have had to submit to it to constitute your application file.<\/p>\n

That said, each lending institution has its own rules and tolerances. It is therefore not always possible to know in advance whether a mortgage application will be accepted by Bank X or Lender Y. This is why the services of a\u00a0mortgage broker\u00a0are all the more valuable. His perfect knowledge of the market will allow him to direct you towards the actors able to offer you, in addition to their agreement, the most attractive conditions.<\/p>\n

The parameters that influencemortgage approval\u00a0are:<\/p>\n

\u200d<\/p>\n

1. The\u00a0credit rating<\/p>\n

2. Your income<\/p>\n

3. The professional career, and in particular its stability<\/p>\n

4. The amount of money you are willing to put down<\/p>\n

5. Your savings, or the source of your down payment<\/p>\n

How to build an ideal borrower profile<\/h2>\n

You can use the following recipes to strengthen your borrowing profile, and thus increase your chances of being welcomed by banks with open arms. And, it’s in your best interest to get started as soon as possible.<\/p>\n

1. Build up savings<\/h3>\n

If you haven’t already done so, open a savings account and put money into it on a regular basis, monthly if possible. Not only will this allow you to build up your savings, but it will show banks that you are a financially responsible person with the resources and discipline to save.<\/p>\n

2. Use credit sparingly while adhering strictly to deadlines<\/h3>\n

Having no debt is great, but a borrower applying for a mortgage with no credit history gives the banks no visibility. They prefer to see that you have used this type of service before and that you have been a good customer. This can be done through a credit card, the use of a line of credit, a small personal loan, etc. Ideally, two active lines of credit for at least two years will help demonstrate this.<\/p>\n

3. Polish your credit report<\/h3>\n

Always make sure you meet your payment deadlines. For your loans and credit cards, of course, but also your electricity bills, rent, etc. Banks look at your history to make sure you are a good payer.<\/p>\n

What documents do I need to submit to apply for a mortgage?<\/h2>\n

Here are the documents you will need to provide to the bank or lending institution. Some are only required in specific scenarios (e.g. if there is a down payment).<\/p>\n

Proof of income<\/h3>\n

To prove that you can afford the monthly loan, you will need to prove your income. For employees, it’s easy: you just need to provide a pay stub and a letter from your employer indicating the position you hold, the date your contract began and the amount of your gross salary.<\/p>\n

For self-employed people, it is a little more complicated: you must provide at least a T1 and a notice of assessment for the previous 2 years. There are\u00a0mortgages specially designed for self-employed people<\/a>.<\/p>\n

Please contact us if you have any questions about this.<\/p>\n

Proof of purchase agreement<\/h3>\n

If the transaction has already been formally documented, you will need to provide it. This may include:<\/p>\n