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Everything You Need to Know About Getting a Mortgage in Calgary

How to get a mortgage in Calgary

Buying a home is incredibly exciting, but it can also feel confusing dealing with all the paperwork that comes with it. Getting a mortgage can seem intimidating but it’s an essential part of the home-buying process, so we’re going to break it down step-by-step. But first, what is a mortgage?

A mortgage is a loan provided by a lender for you to purchase a home. These long-term loans usually last between 25 to 30 years and differ depending on your terms. Each has its own stipulations, which we’ll discuss in-depth further on.

What are the requirements to get a mortgage in Canada?

Before you can apply for a mortgage in Canada, there are a few important requirements you need to meet. First, you need to meet the minimum credit requirements. Most lenders will require a credit score of at least 600, but some may require a higher score. You can check your credit score before applying for a mortgage to make sure you meet the minimum requirements. One free, helpful tool which won’t impact your credit score is Credit Karma.

Second, you need to have a steady source of income. Most lenders will require you to have a full-time job and have been employed for a certain amount of time. They may also require that you have a certain income level in order to qualify for a mortgage. Often your credit score and your income will determine how large of a mortgage you are able to apply for.

Finally, you need to have enough money for a down payment. The amount of money you will need for a down payment will depend on the type of mortgage you are applying for. Some mortgages may require as little as 5% of the purchase price as a down payment, while others may require more.

How to find a mortgage lender

Once you have met the requirements for getting a mortgage, the next step is to find a lender. There are a few different types of lenders that offer mortgages in Canada.

The first type of lender is a bank. Banks are traditional lenders and typically have competitive interest rates as well as a wide variety of loan products.

The second type of lender is a mortgage broker. A mortgage broker is a professional who acts as an intermediary between borrowers and lenders. They can help you find the best mortgage products and rates for your needs.

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Applying for a mortgage

Once you have found a lender, the next step is to apply for the mortgage.

The first step is to fill out an application form. This form will ask for information about your income, debts, assets, and other financials. The lender will then use this to assess your ability to repay the loan. After that, you’ll need to provide documentation such as pay stubs, bank statements, and other financial documents to prove your income and ability to repay the loan.

From here, you’ll meet with a mortgage advisor. Your lender will assign you a mortgage advisor to help you through the process. They will tell you and answer questions about the loan products available to help you find the best one for your needs. Once you have chosen a loan product, it’s time to sign the mortgage documents. This is a legally binding agreement that outlines the terms of your loan.

The final step is to close on your mortgage. It involves signing closing documents and paying any fees associated with the loan. Once you have closed on your mortgage, you will be the proud owner of your new home.

What is the mortgage approval process?

Once you have filled out and sent in the application as well as given the necessary documents, the lender begins the process of approving your mortgage. First, the lender will review your application and documentation. They will assess your income, debts, assets, and credit score to determine if you are a good candidate for a mortgage.

Next, the lender assesses the value of the home you are buying. They will use the appraisal to determine if the home is worth the amount you are borrowing. After this, the lender gives their final decision. If you are approved for a mortgage, the lender will issue a formal approval. If you are denied, the lender will explain why and provide you with options for improving your chances of approval.

Rates and terms

Once you have been approved for a mortgage, you will need to choose the loan product that best suits your needs. One of the most important factors to consider here is the interest rate. The interest rate is the amount of interest you will pay on the loan. Lenders typically offer different interest rates depending on the type of loan, your credit score, and interest rates from The Bank of Canada.

Another important facet in this decision is the loan term. This is the length of time you will have to pay off the loan. Most mortgages in Canada have terms between 25 and 30 years. However, the length of time in the loan doesn’t fully determine the repayment plan, you do. The repayment schedule is the amount of time you have to make payments on the loan. Most lenders offer weekly, bi-weekly, and monthly payment options.

Finally, you need to consider any additional fees associated with the loan. These can include closing costs, origination fees, and other fees. This is something you can ask your lender about for further details.

Closing on your mortgage

Once you have chosen a loan product and signed the mortgage documents, the next step is to close on your mortgage. You’ll need to sign closing documents first. These documents will outline the terms of the loan and spell out the responsibilities of the borrower and lender. The second step is to pay the closing costs. Closing costs are the fees associated with the loan and can include appraisal fees, title insurance, and other fees. Then finally, and most excitingly, you’ll get the keys to your new home!

Tips to make the process easier

Getting a mortgage in Calgary can be a complicated process, but there are a few tips you can follow to make it easier:

  • Be sure to check your credit score before applying. Your credit score plays a major role in the approval process, so it’s important to make sure it is in good shape before applying.
  • Shop around for the best loan product. Different lenders offer different loan products and interest rates, so it’s important to compare them to find the best one for your needs.
  • Be prepared. Make sure you have all the necessary documents and information ready before you apply. This will save time and help the process go more smoothly.
  • Be patient. The process can take weeks so it’s important not to rush the process and end up with a lender or terms you aren’t happy with.

We asked Calgary mortgage specialist, Mario Damjanovic, for his best advice for first time buyers, and he told us,

Be sure to understand the value of a pre-approval from a reputable mortgage specialist to ensure you are shopping within your budget. Also, avoid making decisions based on interest rates…rates don’t matter if you don’t get the right mortgage approval to begin with”. 

You can reach out to him at mario.damjanovic@td.com if you’re looking to ask more in-depth questions or to start the process of getting a mortgage.

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