EXIT Realty Saskatoon

Banks don't lend to just anybody. They want to make sure you are capable of paying back whatever you borrow so they ask two questions:

First, is your income large enough to cover mortgage payments and other expenses?

Second, do you have enough cash to cover mortgage closing costs and put some money up front as down payment?

Answers to both questions should be yes to proceed with home mortgage qualification.

Home Mortgage in Canada 

Minimum qualifying mortgage credit score is 580.  Anything lower will be turned down by most lenders.  The higher your credit score, the lower your interest rates.  The lower your credit score, the higher your interest rates.

Being late on credit cards, mortgages and other loans lowers your score.  Paying your bills late is also bad for credit.  Paying on time is one of the easiest ways to raise your score.  For best interest rates – pay your credit cards and bills on time.

It's important to note that raising your credit score is a bit like losing weight: It takes time and there is no quick fix.  In fact, quick-fix efforts can backfire.

Minimum downpayment is 5%. If you put less than a 20% downpayment, you are required by law to get mortgage insurance which costs $60 - $175 per month.  If you don't have money for down payment, you can withdraw up to $20,000 from Home Buyers Plan, provided by Canadian government.  Lenders also want to see cash worth few months payments.

If you put less than a 20% downpayment, the amount of your monthly income that can go towards monthly mortgage payments is restricted to 44%.

If you put more than a 20% down payment, then up to 50% - 60% of your monthly income can go towards monthly mortgage payments.

Closing costs range from 2% to 6% of your mortgage.  A down payment is not considered part of mortgage closing costs.  Mortgage closing costs include lawyer fees, document preparation fees, home survey, government taxes and more.

 Make sure to contact your EXIT Realtor for information on getting a Mortgage Broker who's right for you!

Documents & Information Needed for a Mortgage

Basic Information:

• Name, Address, telephone number, email (including co-borrower)
• Social Insurance Number - SIN
• Employer, job title and time you work with the company
• Income
• Previous Employer (if current employment less than 3 years)
• Age / date of birth
• Number of dependants (children, parents, disabled)
• Name and address of the bank you deal with
• Copy of photo identification such as driver's license, passport or other government ID.
• Credit score. When you fill out home mortgage application you give lenders permission to check your credit score. Lenders cover this cost.

Assets & Liabilities Documents:

• Proof of real estate, car, investments or other assets you own
• Documentation of loans such as credit cards, car loans, mortgages, student loans and other debts you must repay

Income Verification Documents:

• Most recent pay stub or pay slip showing amount you earned this year.
• Letter of employment.
• Must be official from your company
• State length of employment, date of hire and position
• If you get paid hourly, than the letter must state hourly rate and hours you work per week
• If you get paid salary than the letter must state the amount you get annually (per year)
• T1 General Income Tax Form - most recent copy.
• Notice of Assessment from most recent tax return to show if there are any taxes owed.
• Financial bank statements

Real Estate Property Documentation:

• Specify type of mortgage (home mortgage, refinance, home equity, pre-approval, etc)
• Mortgage amount
• Mortgage term (5 years, 10 years, 15 years, etc)
• Interest Rates and Amortization
• Property address and type (condo, house, townhouse, etc)
• Details of existing mortgages on the property you want to purchase (must be obtained for the seller).