For many, buying your first home is a giant lifetime milestone.
Whether you’re planning to buy a home now or planning on buying a home soon, preparing for a mortgage is key to securing your first home. But, there are a lot of factors to consider when participating in the real estate market for the first time.
In order to buy a home, one of the most important aspects of the home buying process is to apply for a mortgage. Continue reading find out what you need to consider in order to get approval for a mortgage.
What is Your Credit Score?
Thinking of owning your own home? Check your credit score. This should be one of the first aspects you’ll need to consider when buying a home. If your credit score is on the higher end of the spectrum, a high credit score will be advantageous when applying for a mortgage.
On the other hand, if your credit score isn’t as high, there are many elements that can impact your score. Some of these elements include how long you’ve had credit, the amount of credit used, and if you’re paying bills on time. Focusing on improving your score by using a low-interest credit card and consistently paying your bills on time can help improve your chances of enhancing your credit score and getting approval on a mortgage.
How Much Debt Do You Have?
Increase the chances of your application getting approved by practicing debt-reduction strategies. Some of these strategies include credit counselling, strict budgeting, and paying off any debts.
Essentially, mortgages are loans that are used to pay for a home. If lenders find that you’ve accumulated high debt from other loans/lenders, lenders may think that you aren’t able to pay your mortgage on time and may reject your mortgage application.
How Much Have You Saved Up for a Down Payment?
One of the financial costs that comes with buying home is a down payment.
In Canada, for homes that are $500k or less, you’ll need to require at least 5% of the overall price for your down payment. If you’re purchasing a home $1 million or more, it requires at least a 20% down payment. Anything between $500k and $1 million requires a down payment of 5% on the first $500k and then 10% for the remainder.
Prepare for your down payment by saving up using a high-interest savings account, GICs, or investing in the stock market. Having a bigger down payment can boost your mortgage application’s chance of being approved.
Contact Zoie Conforti Today!
Hiring a real estate agent that is knowledgeable in the real estate market can help guide you in the home buying process and securing a mortgage. If you’re looking for an experienced realtor in the GTA area who knows the ins and outs of the real estate world, then call me today at 647.293.8773 so we can achieve your real estate goals together!
Real estate is in my blood! My entire life, I have been exposed to the intricacies and complexities of the real estate spectrum from resale and land development to pre-construction and closing. I not only can make your homeownership dreams come true, but I have the experience to get your home on the market and sold in no time!