Gather your financial documents
You'll need to provide a lot of financial documentation including tax returns, bank statements, pay stubs, and more. At the time of mortgage pre-approval application, your mortgage broker will walk you through all the documents you need. Gathering these documents in advance can help speed up the pre-approval process and prevent delays. Many of these documents are available to you online through your online baking, Canadian Revenue Agency account, and your company payroll software.
Review your options through multiple lenders
Shopping around for the best mortgage rates and terms can save you thousands of dollars over the life of your loan. That's why it's essential to speak to multiple lenders and see where you can find the best deal. You can also get pre-approved through more than one lender; however, this may count as a “hard hit” on your credit score.
Also, remember to read the terms and conditions carefully for each mortgage you qualify for as a low-interest rate may not always be the best option if there are high fees. Ask about things like penalties for lump sum payments, late payments, and early re-financing.
Hold off on any major purchases
During the pre-approval process, it's important to avoid any major purchases or changes to your financial situation. This includes buying a car, taking out a new loan, or changing jobs. Any of these actions could affect your credit score or debt-to-income ratio and potentially jeopardize your pre-approval.
To wrap up
By following these tips and doing some research, you can increase your chances of a successful pre-approval and ultimately find the home of your dreams.
