House Hunting In Toronto Team™
Rick McGuigan & Robert Holbrook -
HomeLife/Cimerman Real Estate Ltd., Brokerage -
© 2002 -
Not long ago, anybody with a job could get a mortgage. These lending habits were unsustainable. Today, it takes good credit and the right income and references to get a mortgage.
Before completing a mortgage application, make sure that you are prepared for the mortgage application process. Whether the lender approves your loan application will be determined by an evaluation of the following:
Neither a high income nor an exemplary credit report alone is enough to make your loan application stand out. What lenders like to see is strength and stability in all four areas. Borrowers who are qualified, but whose down payment will be less than 20 percent of the purchase price of the home must withstand a second level of scrutiny. That is because mortgage insurers also have to approve such loans, and they have completely different qualification ratios.
A mortgage approval should take only a few days, but it is probably best to allow
up to two weeks. During this process, the lender will do a credit check and spot
check other information you have provided. In addition, an appraisal of the value
of your home may be obtained. Unfortunately, when you are in the middle of the house
hunting process and you come across your dream home, you will not have time to await
mortgage approval. Also, the home seller might not consider your Offer to be worthwhile
if you cannot show you will be able to finance the deal. Do not worry though. There
is an easy solution: Get pre-
Your Credit Score
If you are planning to buy a house, think about your credit history first. The people who lend money do! How well you have handled your credit obligations in the past is of the utmost importance to lenders today.
Ideally, your credit report is an accurate, up-
A credit report is a snapshot of your current credit information. It includes a list of your creditors, payment history, balances, and late payment history (if any). It also includes any inquiries made by creditors to which you have applied for credit.
Many inaccuracies on a credit report can be the result of simple human error, and are therefore not difficult to dispute. Whether the inaccuracies relate to payments not credited, late payments, or data mixed in from the credit file of someone else with a name similar to yours, you will want to contact the credit bureau to dispute inaccurate information promptly.
One of the most important elements of credit is a demonstrated history of on time
payments. Once you send the cheque through, anything can happen – a delay in the
payment being received can kick you over to a 30-
If you are shopping around for a loan or more credit, you should know that when creditors check your credit, it places an inquiry on your credit report. Inquiries can add up, which is often interpreted as a negative by creditors. For this reason, too many inquiries can actually make getting credit more difficult. Moreover, if you did not authorize someone to look at your credit report and they did, they may have broken the law.
It is a good idea to check your credit report for inaccuracies at least once a year. If you find inaccuracies, contact a credit reporting agency in writing within 30 days.
To obtain a free copy of your personal credit file, send a written request to one of the following credit reporting agencies:
Equifax Canada Inc.
Consumer Relations Department
Box 190 Jean Talon Station
Equifax requires a written request including: your name, address, date of birth and Social Insurance Number. Please also include photocopies of two forms of identification and remember to sign your request.
Trans Union of Canada
Consumer Relations Centre
P.O. Box 338, LCDI
Trans Union requires a written request including: your name, address, previous address (if present address is less than 5 years), phone number (optional), date of birth, place of employment (optional), and Social Insurance Number (optional).
Do not confuse pre-
If you apply for a pre-
Advantage 2: Increase Bargaining and Negotiating Power
If several buyers are interested in the same property that you are, being pre-
Advantage 3: Gain Confidence and Avoid Disillusionment
Now when you find that perfect home, nobody can take it away from you by telling
you that you do not qualify to buy it. You can minimize anxiety and remove last-
Advantage 4: Enjoy a Faster Closing Period
Because there is no window period while your loan application is processed, the lender can speed up the entire processing procedure.
It's important to note that raising your credit score is a bit like losing weight:
It takes time and there is no quick fix. In fact, quick-
For a small fee of approximately $15, you can also have direct access to your credit report online (click the company logo above to visit the website).