With increasing rental rates, owning a house is a better option as compared to renting apartments or condos. However, in a city like Toronto, buying a house is not a cake-walk and one cannot just go and buy a house in one fell swoop. Therefore, getting a mortgage is a more suitable option for those who can not afford to buy a new house by paying all money at once. Due to strict mortgage rules in Canada, the process of acquiring a loan or mortgage can be rather tedious and if you don’t have prior knowledge of getting a mortgage then it could be a bit difficult for you. We have collected some tips, for getting a mortgage in Toronto, which may prove beneficial for you.
Downpayment is the money you need to provide to the seller upfront. In Canada down payment is usually 20% of the total price of the house. If you don’t pay 20%, you need to get insurance for your mortgage which can put a burden on you because in that case, you will need to pay insurance installments as well. So, you should make sure to gather enough down payment.
Get a pre-approval
Getting a pre-approval is a smart thing to do. You can get the lender to assess your financial situation (it includes credit history, downpayment, income, and other factors) and pre-approve your mortgage amount, interest rate, and terms. It allows you to do carefree house hunting and also you can readily put an offer when you find a house.
Check your credit history
Credit history is one of the most important points your lender will consider about you before approving your mortgage. Therefore, you need to ascertain that you have a rather clear credit history because if your credit history shows unpaid debts and late payments it may create hurdles in approval of the mortgage.
Try to keep things within budget
“Don’t bite off more than you can chew” is a quite well known saying. The point here is that one should look for a house or a condo that he can afford. Trying to get an expensive house decreases your chances of getting a mortgage. So, it is better to look for an economical and decent house.
By following these tips you can easily get a mortgage approval, however, this is only one side of the coin. All the terms and conditions applied by the Canadian banks and agencies before and after getting a mortgage can become quite a headache for you as they inquire about your whole life and have a long list of requirements. So, if you don’t want to bear the hassle of strict mortgage rules then you can look for a private lender in Toronto. The benefits of getting private loans include little or no background check, less down payment requirement, easier terms, leniency depending on your financial condition, etc. whatever you choose, it depends upon your comfort level.