Everyone wants the best rate. It’s incredible to think that the best rate comes with a price. That price is insurance. But nevertheless, you get a deep rate discount when you get an insured mortgage approval based on these 3 important factors.
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Income
- You have proof of employment income and usually, they like to see tenure. You must have been there for at least 2 years. Some exceptions do exist I would say. For example, if a borrower just finished post-secondary education, I would ask a lender to waive if income was less than this 2 years.
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Credit
- Oh boy! This has changed since I began doing mortgages. When we pull your credit we get a number between 0 and let’s say 900. We would need you a Credit Score of over 600. Sometimes 680 depending on the situation. To check your bureau quickly and for free go here.
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Down payment
- This amount needs to be 5% of the purchase price. Up to 19.99% of the purchase price. If you put 20% down you are not going to be insured, instead, you will move to uninsured. This amount can be gifted from an immediate family member with a gift letter and proof of deposit. It is best to have 90 days of this money saved in the account. RRSPs can be used as a down payment as well.
As always, there are other situations and hurdles that occur when obtaining, processing, and funding your mortgage. Make sure that you communicate with your mortgage Agent/ Broker, as they provide numbers and the conditions of your approval.
