You must be out of the probationary period at your place of employment (typically three months) in order to qualify. If you are anything other than full-time or salaried, speak with a mortgage broker to make sure you have the appropriate documentation to provide a lender.
If you are self employed, you will need two full years worth of tax returns to qualify, if you fall into this category, it’s best to speak with a mortgage broker as well, as self-employed files can be case-by-case.
Any loans (auto, student, etc), lines of credit or credit cards which carry a balance will be used in your debt calculations. If you carry high balances or are over-limit, you may be required to pay some of this debt down prior to mortgage conditions being fulfilled.
Paid and unpaid collections may have to be dealt with prior to approval. If you need credit counselling, or you aren’t sure what your credit bureau will show, a chat with a mortgage specialist is a must.
Expect a minimum requirement of a 5% down payment, 10% of any amount over $500,000, and substantially more for any amount over $1,000,000.
If you have a pre-approval, DO NOT open new forms of credit until after your home purchase has closed. A pre-approval gives you confidence based on your current conditions. If any of those conditions change, your approval may be in jeopardy.
Lenders will trace your deposit funds for 90 days prior to underwriting of the loan, don’t deposit large sums of cash as it is untraceable and can affect your ability to be approved.
If your deposit is gifted, the funds must be deposited into your account prior to the mortgage being instructed. The sooner you can receive the gifted funds, the better.
You can shop your mortgage between brokers and banks in order to make sure you are getting the right product, which isn’t necessarily the one with the lowest rate.
Your bank won’t give you preferential treatment, no matter how long you’ve been a client.
Best bet?
Get pre-approved through a mortgage broker who you feel you can trust and has asked you all the right questions up front. The more information provided prior to your home search, the more confident you can feel moving forward with the process.