Qualifying For A Mortgage
All the tips and tricks you need to know.
Income and Debts
The amount of income required to qualify for a mortgage depends entirely on multiple factors such as: price of the property, any existing debts or obligations you may have, condo fees (if any), property taxes, and more.
Lender’s typically prefer borrowers with a low debt-to-income ratio, so aim to reduce existing debts and avoid taking on new ones before applying for a mortgage.
Mortgages are available for both salaried employees and self-employed purchasers! Our in-house mortgage team will quickly be able to tell you how much you qualify for when you schedule a strategy call!
Downpayment
Saving for a downpayment may seem daunting, but there are programs available to help you save faster. The minimum downpayment required in Canada is 5% of the purchase price of the property.
Programs such as the Home Buyer’s Plan and First Home Savings Account can help you increase your downpayment and provide great tax savings!
Our in-house mortgage team can help you get these accounts set up so that you can realize thousands of dollars in tax savings and quickly increase your downpayment!
Credit
Typically, lenders and banks look for a minimum credit score of 680.
Maintain a good credit score by paying bills on time and keeping credit card balances low to improve elgibility for favorable mortgage terms. Avoid opening new lines of credit before applying for a mortgage, as multiple inequities can lower your score!
Bad credit? Our in-house accountant works to put buyers on a path to repair their credit. Schedule a free consultation by clicking here.
Downpayment, credit, and income all good? Then you are ready to sit down and figure out how much you are approved for!
Book an appointment with our in-house trusted mortgage broker to get started.
Type of Mortgages
Fixed Rate Mortgage
- Payments are fixed for the entire mortgage term
- Predictable monthly payments, making budgeting easier
- Offers stability with a constant interest rate and payment throughout the term
- Ideal for those seeking long-term financial certainty and protection against interest fluctuations.
Variable Rate Mortgage
- Payments fluctuate throughout the mortgage term
- Initial rates typically lower than fixed rates
- Monthly payments can vary over time, making budgeting more challenging
- Ideal for those who have a stronger risk appetite due to potential for savings if interest rates decrease, but also risk of increased payments if rates rise
High Ratio Mortgage
- Downpayment is less than 20% of the purchase price
- Requires mortgage default insurance (an extra cost)
- Protects lenders against borrower default and allows borrowers with smaller down payments to access mortgage financing.
- Typically associated with lower interest rates due to reduced risk for lenders.
- Mortgage default insurance provided by CMHC, Genworth, or Canada Guaranty
Conventional Mortgage
- Does not require mortgage default insurance when the down payment is 20% or more of the purchase price.
- Borrowers with larger down payments are considered lower risk by lenders.
- Generally associated with higher interest rates compared to insured mortgages.
- Borrowers may have more negotiating power and flexibility in terms and conditions.