Where do I start?
Getting pre-approved for a mortgage is the first step to finding out the maximum amount a bank will lend you and at what interest rate. Setup an appointment with a mortgage specialist at your bank. Getting pre-approved will give you the price range of the home in which you should be shopping for and the mortgage payments you can expect.
What you need.
To process a pre-approval, you should have the following information ready for the potential mortgage specialist/lender:
. Proof of Employment
. Proof of current salary or hourly pay rate, position & length of time with organization
. Current pay stub and letter from your employer
. If you are self employed, bring your Notice of Assessments from Canada Revenue Agency (last two years)
. Information about your assets (IE. car, boat)
. Information about your debts or financial obligations (IE. credit card balances, child or spousal support amounts, car leases, line of credit, student loans)
Borrowing from Bank vs. Mortgage Broker.
What is a Mortgage Broker
Mortgage brokers are independent licensed mortgage specialists who have access to multiple lenders and mortgage rates. They can assist you from the pre-approval process to shopping and negotiating the lowest rate for you.
The Pros of using with a Mortgage Broker.
With access to multiple lenders and mortgage rates, they essentially do the shopping for you. Volume discounts achieved by mortgage brokers are passed along directly to you.
Mortgage Brokers have knowledge of the entire active mortgage market. Their experience will allow them to advise you on which lender be better to work with based on individual financial circumstances. This is particularly helpful with people who have poor credit history.
The Cons of using with a Mortgage Broker.
For first time home buyers, it’s important to understand that not all brokers are equal. Do your own vetting and ask about the broker’s qualification and experience before making a decision.
You shouldn’t have to pay a fee to a broker, but understand that they receive a commission from the financial institution that they setup your mortgage with. Brokers tend to develop relationships with lenders, so a common concern is if they are shopping for the best deal from all the institutions.
The Pros of working with a Bank.
Chances are you’ve been doing your banking with the same financial institution for years. Obtaining a mortgage from a bank has extensive benefits considering your banking history and have developed a trustworthy relationship.
If you plan on doing your mortgage through your bank, they already have direct access to your pay stubs, assets (RRSP, Saving etc.) reducing the time and paperwork required to process your mortgage.
Your banking and mortgage would be centralized to one location, meaning you can consolidate your statements and view your balances online without having to setup another account at another financial institution just for your mortgage.
If you do your shopping and find a lower rate elsewhere, chances are that your bank will try to match or beat the rate to have your mortgage with them.
The Cons of working with a Bank.
If you don’t have a good relationship with a bank, you will have to shop around and negotiate rates which can be time consuming. For home buyers with a poor credit history, it may be harder to obtain a mortgage.
Vancouver Real Estate Agents
If you are looking for homes & condos in the Metro Vancouver Area, call our Vancouver real estate agents:
Phone: (604) 899-3368 to get started!
Let us help you find your perfect home or investment property!