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Mortgage Pre-Approval FAQ

Why do I need a mortgage pre-approval?

Mortgage pre-approval shows your lender that you’re ready to make a serious financial commitment. This reduces their perceived risk, which potentially helps you get better deals and lock in the rate you want.

How long does a mortgage pre-approval take?

Mortgage pre-approval can be completed in as little as one hour if you’ve organized your documents ahead of time. During our first phone call, I’ll let you know exactly what documents you need to provide to make the process as quick and painless as possible.

What happens during pre-approval for a mortgage?

Before I submit your application for pre-approval to the lender, I’ll determine how much of a mortgage you can afford and choose the rate that suits you best. Then the lender will review the details and confirm them so you can continue with the process.

How much does it cost?

Good news—your application won’t cost you a thing. I get paid by the lender after each transaction is complete. If you don’t get funding or end up using my services, you won’t be out of pocket at all.

What will my mortgage rate be?

When you first apply, your mortgage interest rate is primarily determined by how much risk your lender faces. This depends on numerous other factors, including how much of the home’s value your mortgage will cover, your credit score, and the size of your down payment.

How much can I get for a mortgage?

The size of the mortgage you’re able to get generally depends on:

Your total gross household income per year
How much debt you have (including consumer debt and other loans)
How large your down payment is
Your monthly condo fees (if you’re buying a condo)

Will I be approved if my credit score is low?

Most Canadian banks will require you to have a credit score of at least 600 to apply for a mortgage—and the Canada Mortgage and Housing Corporation (CMHC) requires you to have a score of at least 680.

There are some mortgage options for borrowers with low credit scores, but these may come with higher interest rates and other less desirable terms because of the relatively high risk to the lender. When you contact me for help, we’ll discuss your credit score and how it can affect your mortgage pre-approval.

Why would a mortgage pre-approval be denied?

Mortgage pre-approvals can be denied for several reasons, including:

A household income that does not meet the lender’s criteria
A credit score that is too low
Employment history that raises concerns for the lender and increases their risk

When you work with me, we’ll go over your information to look for these red flags. Together, we’ll ensure that you have the best chance of being pre-approved for the mortgage you want.

1st & 2nd Time Buyers FAQ

What is the first step to getting my mortgage approved?

The first step towards getting approved for any mortgage should be to contact a qualified mortgage broker (like myself) and learn about your options. I’ll be able to show you offers you won’t be able to find by yourself, and give you the best shot at getting approved for the mortgage that will work best for you.

Are incentives available for 1st-time home buyers?

The Government of Canada’s First Time Home Buyer Incentive is aimed at helping people across the country buy their first home. It puts an amount equal to 5 or 10% of the home’s purchase price towards your down payment, lowering your monthly mortgage payments and making home ownership easier to afford.

How much money do I need to make to get approved?

There is no set minimum income required for mortgage approval, but you’ll need to prove to your lender that you can afford your mortgage. Different lenders use different standards to determine this.

For example, according to the Canada Mortgage and Housing Corporation (CMHC), your total household expenses should never be more than 39% of your gross monthly household income. These expenses include:

Your mortgage principal and interest
Property taxes
Heating costs

When you work with me, I’ll provide you with mortgage options that are a good fit for your income level, as well as your credit score and other common requirements. Together, we’ll find an option that works for you.

Once I’m approved, what happens next?

Once your lender has decided to approve you, they’ll send you an official commitment for your mortgage. This is the part where your mortgage rate and terms get locked in, and you sign the final documents that make you a homeowner! This step generally takes up to 10 business days, although it can take longer if additional documents are needed—but I aim to make it happen faster. Congratulations—we did it!

What will my mortgage rate be?

When you first apply, your mortgage interest rate is primarily determined by how much risk your lender faces. This depends on numerous other factors, including how much of the home’s value your mortgage will cover, your credit score, and the size of your down payment.

How much can I get for a mortgage?

The size of the mortgage you’re able to get generally depends on:

Your total gross household income per year
How much debt you have (including consumer debt and other loans)
How large your down payment is
Your monthly condo fees (if you’re buying a condo)

Will I be approved if my credit score is low?

Most Canadian banks will require you to have a credit score of at least 600 to apply for a mortgage—and the Canada Mortgage and Housing Corporation (CMHC) requires you to have a score of at least 680.

There are some mortgage options for borrowers with low credit scores, but these may come with higher interest rates and other less desirable terms because of the relatively high risk to the lender. When you contact me for help, we’ll discuss your credit score and how it can affect your mortgage pre-approval.

Why would a mortgage pre-approval be denied?

Mortgage pre-approvals can be denied for several reasons, including:

A household income that does not meet the lender’s criteria
A credit score that is too low
Employment history that raises concerns for the lender and increases their risk

When you work with me, we’ll go over your information to look for these red flags. Together, we’ll ensure that you have the best chance of being pre-approved for the mortgage you want.

Renewals & Refinancing FAQ

What is the difference between renewing & refinancing?

Renewing means resigning your mortgage for a new term—which may be at a different lender with better rates. I’ll help you shop for the best deal.

Refinancing a mortgage involves changing your current mortgage deal for a different one. This means you’ll have to get the new mortgage approved by the new lender, and can come with various fees. However, refinancing is often a good idea if interest rates have dropped since you took out your original mortgage, as this can lock you into a lower rate.

When you work with me, we’ll discuss the pros and cons of renewing and refinancing so you can understand what option is best for you.

Why use a mortgage broker for a renewal?

You might think there’s no need for a broker if you’re simply renewing the terms of your existing mortgage. But working with a broker can come with several benefits, including:

Troubleshooting mortgage renewal problems
Finding you better options than renewing with your current lender
Helping you process your required documents quickly and accurately

Is it worth it to renegotiate my mortgage?

There are several situations in which renegotiating your mortgage can prove useful. These include:

You want to borrow against the equity in your home
You want to take advantage of lower interest rates
You want to consolidate debt

Finding opportunities to refinance your mortgage for a better deal with another lender can also help you negotiate better terms with your current mortgage holder. When you contact me, we’ll look at your situation and see if you can benefit in any of these ways.

Will my mortgage payments go down when I renew?

When you renew a mortgage, you have an opportunity to ask for a better rate. Most people don’t, because they assume that what they’re offered is the best they can hope for—but that’s almost never true. A skilled broker like me can help you get the best terms when you renew so you can enjoy the lowest possible rate.

But even if you manage to get a lower rate for your renewal, it’s a good idea to keep making the same monthly payments as before. This will help you pay down your mortgage faster, giving you the best value in the long run.

Is renewing your mortgage the same as refinancing?

No! Renewing and refinancing are very different things. Renewing means resigning your mortgage for a new term, whether it’s with your existing lender or another one. Refinancing means breaking your term for a lower rate or to pull equity out of your home. I’ll help you weigh the pros and cons of each option so you can get the best deal for you and your family.

Can refinancing help me get a better rate?

Absolutely! One of the best reasons to refinance is to take advantage of lower interest rates, which can either reduce your monthly payments or help you pay your mortgage off faster in the long run.

But refinancing isn’t always the best choice—it comes with certain expenses, and you’ll need to make sure that any amount you’re saving offsets those costs in a reasonable amount of time. Fortunately, I’ll be at your side to help you make that call.

Renovation Mortgages FAQ

How do I calculate my renovation budget?

The average spend for a home renovation these days is around $10,000 CAD, but costs can vary greatly. Some of the factors that will contribute to the costs of your home renovation include:

How old the property is
How large the property is
The complexity of your planned renovations
Your renovation timeline
The quality of the labour, materials, and fixtures used
The costs for permits, appraisals, and fees in your area

To get an idea of the likely costs for specific projects, you can use HomeStars’ cost guides. But working with an experienced professional is the best way to figure out how much money you’re going to need.

Is my rate impacted by adding renovations to my budget?

Bundling renovations into your mortgage shouldn’t increase your rate—but you will be paying interest on the funds borrowed for your renovation costs. These funds will typically be held back until your renovations are completed, at which time they’ll be released to you.

Is there a limit to how long renovations can take?

Since you’ll be paying interest on the funds held for your renovations until that work is completed, it’s in your best interests to complete your renovations as soon as possible. However, you generally have up to 12 months to complete the work (depending on the lender).

Is there a limit to how much I can request?

Various lenders offer different options for how much money you can request as part of a renovation mortgage. For example, the Canadian Mortgage and Housing Corporation (CMHC) offers up to 95% of the property’s value after renovations with a 5% downpayment.

If you already own a home and want to renovate it, refinancing your mortgage can allow you to borrow up to 80% of the appraised value of your home (after considering the amount still left to pay on it). Together, we’ll look at how much money you need for your renovations and find an option that supports your goals.

Mortgages Rates FAQ

What is interest?

Interest is a percentage of what you’re borrowing that you pay to your lender once your mortgage has been approved. Think of it as the price you pay for using their money.

When you apply for a mortgage, various lenders will offer options with different interest rates (depending on what you qualify for). Whenever you renew or refinance your mortgage, you’ll have an opportunity to renegotiate these rates.

How are mortgage rates calculated?

Lenders typically base their mortgage rates on the following factors:

How long your mortgage term is
The lender’s posted interest rate (i.e. the rate they advertise publicly)
The lender’s prime rate (which they use to set their posted rate)
Whether you’re eligible for a discounted rate
Whether you choose a fixed-rate, variable-rate, or hybrid mortgage
Your credit and employment history
How much you have for the down payment

What will my rate be?

Various banks and other lending institutions offer calculators to help potential applicants estimate their mortgage rates, but these are no substitute for getting help from a professional mortgage broker because every borrower is different. When you work with me, we’ll consider your unique situation so you can apply to get a mortgage with the best rate available to you.

Will my rate be the same in 6 months (& how long can I lock in my rate)?

Whether your mortgage rate changes over time depends on what kind of mortgage you get. There are two main mortgage types: fixed and variable.

Fixed mortgages remain the same for your entire term. They tend to have higher rates, but since those rates don’t change, you won’t have to worry about them going up if prime rates rise. This also helps you predict when you’ll be able to pay off your mortgage more accurately.

Variable interest mortgages have rates that change depending on market conditions. They are often less expensive at the front end—and if market rates go down, they can help you save a significant amount of time or money paying off your mortgage. However, you may end up paying more if market rates end up climbing, and changes in interest rates are often unpredictable.

Some lenders provide the option to convert to a fixed interest rate during your term. For more advice on how to leverage these features, contact me to discuss your options.

Make Your Mortgage Happen

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Make Your Mortgage Happen

Get Started

Contact Me