How to Get a Mortgage in Ottawa: A Beginners Guide
If you’re looking to buy a home in Ottawa, you may be wondering how to get a mortgage as a first-time home buyer. While the process can seem overwhelming at first, with some planning and research you can make it happen. Getting approved for an mortgage is not easy and will involve gathering lots of documentation and satisfying lender requirements. You will need to put together an application which shows your housing history, income, credit score, etc…
If this sounds like something you’re ready to take on, read on for our beginner’s guide on how to get a mortgage in Ottawa.
What you need to get a mortgage in Ottawa
There’s no one-size-fits-all mortgage, but there are some basic requirements most lenders will look for in an application. – You need to be a Canadian citizen or permanent resident: While immigration and refugee status are not factors in mortgage approval, your citizenship does matter. You can apply for a mortgage only if you’re a Canadian citizen or a permanent resident.
You need to be employed: Lenders will want to see proof of income in your application, such as pay stubs or employment letters. You’ll also need to show proof of income history for several months at minimum. This means you’ll have to show proof of employment for the last 12 months.
You need to have collateral: In the case of a default, the lender can take your house and sell it to recoup their losses. While you should always make your payments on time, you don’t want to leave your lender with no way to make up for a missed payment. If you have a down payment of less than 20 percent, you’ll likely need a collateral-backed mortgage.
You need to have savings: Lenders will want to see that you have savings set aside for housing costs, maintenance and repairs. You’ll need to show proof of funds in your application, such as a bank account statement.
You need to have good credit: Lenders will look at your credit history and score when reviewing your application. Make sure to pull your credit score at least 90 days before you start the mortgage application process, so you have time to improve it if it’s not at its best.
Meet with a mortgage broker
Many people only deal with a bank for a mortgage, but there are many different lenders in the market and each has different lending policies. By working with a mortgage broker, you can shop around for a lender offering the best terms and rates. A mortgage broker works with several banks and lenders, so they can help you navigate the process of applying for a mortgage. They can also advise you on which lenders are best suited for your credit history and financial situation. Working with a mortgage broker will allow you to compare different lenders, account for your credit score, and make sure you’re getting the best deal possible. There are many different types of mortgages out there, such as fixed-rate, variable-rate, open term, closed term, etc…
It’s important to know which type of mortgage you should be getting. A mortgage broker can help you make an informed decision on what type of mortgage is best for you. They will be able to help you decide on the best type of mortgage for your needs.
Check your credit score
One of the first steps of getting a mortgage is to check your credit score. This will give you an idea of how lenders will see you. Having a good credit score is key to getting a good interest rate on your mortgage. Most lenders will want to see a credit score of at least 680. There are a few ways you can go about checking your credit score, but the most reliable method is to sign up for a credit monitoring service. A credit monitoring service will give you a detailed report on your credit score, along with information on what factors are affecting it. You may have to pay for a credit monitoring service, but in the long run it’s worth it. Having a good credit score means you’ll have more options when it comes to lenders. You’ll also have a better chance of getting a lower interest rate with a better payment plan.
Get an appraisal
An appraisal is a process where a third party will assess the value of your home. Lenders will want to see an appraisal on your home, so they have an idea of what it’s worth. Appraisals vary in cost, so you may need to set aside some cash to cover the expense. Your mortgage broker can help you find a reputable appraiser who will accurately value your home. The appraisal process can take anywhere between a couple of weeks and a few months, so keep that in mind when getting an appraisal. Depending on the value of your home, lenders may require two appraisals. This is common when the value of the home is high, as it provides a level of assurance that the mortgage amount won’t be more than the value of the home.
Know your lender and the loan type
Not all lenders are created equal, and they will each have their own lending policies. So, it’s important to do your research and find a lender that best suits your needs. Make sure you pick a lender that offers the type of loan you’re looking for. If you’re in the process of getting a mortgage, you may want to jot down the name of the lender you’re working with. This way, you’ll have one lender to focus on instead of applying to as many lenders as you can. Different lenders will have different mortgage rates and terms, so do your research and make sure you apply for a mortgage that works best for you. You can start by taking our quick quiz to find out which lender is best for you.
Conclusion
Getting a mortgage can be a stressful experience, but it doesn’t have to be. By practicing good financial habits and making sure your credit history is in order, you can get the best mortgage terms possible. By following our beginner’s guide on how to get a mortgage in Ottawa, you can take the first steps towards owning your dream home. You will need to gather lots of documentation and satisfy lender requirements. And while it may seem like a daunting task, it’s one that can be accomplished with the right amount of preparation.
We here at Capital Mortgages in Ottawa look forward to assisting you with all your Ottawa mortgage broker needs. Contact us today by calling us at: 613-228-3888 or email us direct at: info@capitalmortgages.com
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