When you are planning to buy a home it is important to get pre-approved for a mortgage before you even starting looking at
houses. Sellers will be more likely to accept your offer if you are already approved for a mortgage. A seller does not want to take
the chance on accepting an offer from a potential buyer who may not be able to qualify for finance when there are other buyers who
are already approved. Here are some tips to increase your chances of getting pre-approved for a loan.
The very best tip we can offer is to use a mortgage broker to find the right loan, and to prepare the loan application. There is no
substitute for experience and brokers understand the application process and the banks requirements, making the process much simpler
than doing it on your own. I wasted lots of time and effort applying to 3 banks and was rejected by each but a mortgage broker was able to
obtain a loan for me without any trouble. If you don't know a broker, see our recommendation at the bottom of the page.
- This goes without saying, but be honest about everything on your application.
- If you will be borrowing your down payment from a relative be sure to do it more than six months before you apply for your home
loan. Lenders will typically not allow you to borrow your down payment. Some lenders will accept this situation if your relative
provides a statement that money is a gift without repayment obligations.
- Request a copy of your credit report and review for mistakes. If there are any errors attempt to clean up before you submit your
application. You can send a letter with documented proof to the credit bureau requesting a correction of the mistake.
- Catch up on all bills and continue to pay all your bills on time. Late payments can hurt your credit and your ability to get approved
for a loan.
- If you have too many debts consider consolidating these loans. Too many debts can cause lenders to question whether you will be
able to take on additional payments.
You will need to bring certain documents with you when completing your mortgage application. These include:
When completing the home loan application you will typically need the following information.
- 1. A copy of the purchase sales contract.
- 2. The property legal description.
- 3. Your tax returns for the previous two years including all schedules if you are self employed, employed in a family business or
receiving a portion of your income from commissions or own rental property.
With a little preparation your mortgage application process will go smoothly and you will be on your way to owning that new home.
- Your employment history for the last two years.
- Bank account information including account numbers and balances.
- Stocks, bonds and investment account information.
- The value of your superannuation with a recent statement and supporting documents.
- Automobile information.
- Life insurance policies including the name of the insurance carrier, policy number, and amount of insurance.
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