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Are you tired of renting, and considering buying a house in Ontario? This article has the most relevant information that will guide you when going through the process of applying for a mortgage. You can become a homeowner through a mortgage but the first thing is to find out is if you’re qualified to apply for one.
The mortgage process can be sometimes intimidating and daunting. This is because most brokers make it confusing, and in most cases banks don’t take time to explain all that the lenders ought to know. Of course, there’s no mystery surrounding the process. You only need to understand the fundamental principles guiding a mortgage application process and then find out whether you’re qualified or not.
In This Post:
Eligibility for a Mortgage Loan
As we’ve pointed out earlier, you have to confirm your eligibility before you apply for a mortgage loan. Eligibility is generally determined by your credit, gross income or job stability, and equity. Conditions for eligibility are mainly predicated on the ability of the lender to pay back the loan in due time. Canada Mortgage and Housing Corporation is the federal body saddled with the responsibility of regulating house prices and mortgage matters in Ontario. Other criteria for eligibility for mortgage include but not limited to full time employment/proof of income, excellent credit rating, confirmed down payment, etc.
Licensed Mortgage Broker Vs Banks
You can decide to deal with a bank or seek the service of an independent mortgage broker. Professional mortgage brokers are licensed mortgage specialists. Their existence gives you the opportunity not to base your decision only on the information you get from banks.
It’s also important to emphasize that professional mortgage brokers have access to multiple lenders and good mortgage rates in Ontario. Studies have shown that brokers receive less in terms of market share on the loan.
There’s opportunity for you to apply for a mortgage pre-approval in Ontario. What does mortgage pre-approval mean? This provision is available for you in case you’re planning of buying a house in the near future and you want to secure an interest rate guaranteed by the lender. However, the interest rate can only be held for 120-180 days depending on the lender.
The minimum down payment required to purchase a home in Ontario
The minimum down payment required to purchase a home in Ontario is 5%. The rate, however, is subject to maximum price restrictions. In addition to this, you must be able to confirm that you are capable to cover all the costs incurred to close your mortgage. These costs include the legal fee, survey certificate and appraisal fee. Once these are settled, you’re good to go!
How long does it take to complete a mortgage transaction?
The transaction period doesn’t take long if you meet the conditions for the mortgage. The whole transaction can be completed within two weeks or less if you’re able to present all the information required by the lender to the broker.