When looking for a new home, you should always get pre-approved by a lender first. We can help you find out how much you can afford in a matter of minutes!
Before buying a home, you should always obtain a mortgage Pre-Approval, and here is why it’s important that you pre-qualify for a mortgage first:
Our mortgage pre-approval process is fast and easy. It involves one of our professional and experienced mortgage brokers or agents assessing your financial situation and then shopping around for the most ideal lender that will offer you the best rate and best mortgage terms for your individual goals and situation. The lenders will then determine how much money they would be willing to lend to you as a mortgage and at what interest rate and terms.
These are the factors that matter most to lenders when they are making their decision whether to grant you a mortgage loan or not:
For a more thorough list of what may be required for a proper and accurate pre-approval please refer to our mortgage pre-approval checklist.
Using the right pre-qualification process, the experts at Clover Mortgage are able to lock in and guarantee the lowest interest rate for you for a period of 4 months (120 days) with certain lenders that we work with. This process is 100% FREE and you have no obligation to take this rate. So even if interest rates go down while you are buying your home we will be able to requalify and approve you at the new lower rate at the time of closing.
As a professional Mortgage Broker, our obligation and commitment is to you, our valued client. We promise you that we will search for the absolute best mortgage rate and term for you because we always put our clients first!
Lenders care about how much income you earn and what percentage of that income goes towards making your mortgage payments vs what percentage of your total income is needed to pay for your other regular expenses and debts. With this information a lender can assess whether or not you will be able to afford the home you want given your current financial situation.
Mortgage lenders will look at all aspects of your income as it relates to all of your current debts. If you have enough income to be able to afford all of your debts and financial obligations, including the mortgage payments, then the lender will grant you the loan. If a lender feels that by purchasing this home you will likely have trouble affording to pay for all of your current debts and obligations, the lender will be likely to decline your application.
Different lenders will accept different sources as income. It is our job to help you build your case honestly and present it honestly to the lender. Many traditional lenders prefer to see that you have been employed full-time for at 2 consecutive years without a gap in your income, but we have access to many lenders who would even accept self stated income (with proof such as invoices, past income tax fillings, contracts, etc.), part-time or seasonal jobs, property rental income, investment income, and more.
With most institutional lenders having good credit is a key factor in qualifying for a loan. While your credit score is important since we work with institutional lenders like banks and credit unions, fortunately we at Clover also work with many less traditional lenders such as trust companies and other lending corporations that place much less emphasis on a borrower’s credit score. In many cases, certain lenders will lend regardless of how good or bad your credit score might be.
While your credit score gives the lenders a numbered rating of your overall credit report, your credit history provides a more detailed picture to lenders. With taking into account all of your current debts, a lender will also analyze how likely you are to make your mortgage payments on time. From your credit report the lender will be able to analyze your payment patterns, they’ll be able to see any late or missed payments that appear on your record, and they will be able to determine based on your past payment history, how likely you are to make you payments to them.
We always recommend that you order a copy of your own credit report from both Equifax and Transunion prior to applying for a loan so that you know where you stand and have a better time understanding what lenders might be best for you.
In addition to your income, lenders will look to see if you have any additional assets. Money in your savings or chequing accounts, RRSP’s, mutual funds or bonds, a paid of vehicle, another property, rental properties, other investments, and other assets are looked at in a positive light and help offset and balance any debts that you might currently have.
Like most Canadians, you probably have some liabilities, also known as debts, that you are in the process of paying for. Lenders will assess all of your current debts, such as car loans, student loans, credit card balances, lines of credit balances, child support, spousal support, mortgage payments, and more.
If you have too much debt, the lender might require part of the mortgage loan directed to pay off some of your debts, or you can consider a home equity loan, which involves taking equity from your home to pay down and consolidate some of your current debt. Since the interest on a home equity loan is usually much less than the interest on other loans and debts, this option will often times save you a lot of money and make your monthly payments more affordable.
Contrary to what many people think, you do not have to have a large net worth in order to qualify for a mortgage, but it really helps your application get approved is you have a history of consistent employment, regardless the field or occupation. Lenders feel more confident lending money to people who have worked at the same company for several years rather than someone who has many gaps and inconsistencies in their employment.
If you do not have several years of steady income, luckily for you the Mortgage Agents at Clover can still help you get approved for a great rate, as long as you have been earning a steady income of the past year.
There are several ways that lenders can verify your employment including requesting a job letter signed by your employer that confirms your occupation, how long you have been working at the company, and how much your earn per year. If you are not salaried employees of a company, but instead you are self-employed or you own your own business, or if you have been at your current place of employment for less than two years, you might be asked to provide additional information such as your federal income tax documents and other documentation.
Institutional lenders, such as banks, want to make sure that you have enough “skin in the game” when taking out a loan to buy a property. This means that there are certain lenders that have certain minimum down payment requirements, and some might even want to ensure that a certain portion of the down payment comes directly from you and is not loaned or gifted to you by someone else, like a family member or friend. This makes the lender feel more secure because they know that you have your own hard earned money invested into the home and are less likely to default on your mortgage payments.
Many people think that the value of a house is the amount that someone buys it for. That’s not always true. In many cases a house might be worth much more or even less than the price that a buyer pays for it. When applying for a mortgage the lender will want to ensure that the home you are buying is worth the price that you are going to pay for it. The lender is concerned about their ability to recuperate their loan in the event that you stop paying your mortgage and they need to proceed with a power of sale or foreclosure on your house (foreclosures are very uncommon in Canada).
The value of your home also makes a big difference with regards to the loan amount that a lender will consider. In the case of more traditional institutions, such as banks, they will often lend up to 95% of the property value on home purchases, though certain conditions would apply including mortgage default insurance, good credit, and more. In order to determine the true value of your home a lender will usually request that an appraisal is conducted by an appraiser of their choice before approving any potential loan.
*Rates start as low as 4.49%
*Rates are subject to change. Terms and conditions may apply.
We pride ourselves on quick, easy & honest service. Our clients always come first.
We specialize in dealing with bad credit & bank declines. We turn a “no” into a “YES!”
*No credit checks. No complicated application and no income required!
*Terms & conditions may apply.