Some hints as to what a lender is after.

What does a lender really want?

You think it’s all about a great credit score?  Think again.  There is so much more to the equation.  Like how often have you moved, how stable your employment is, and do you have access to way to much credit.

An Alberta Mortgage Broker can tell you it’s not that hard to qualify for a mortgage if you know what they are looking for.  If we can’t get you qualified quickly we will set you on a path to get you there.  Even right after bankruptcy people have become home owners.  The real trick is knowing when and who to approach with your deal after determining where the prospective home owner is at. 

Most lenders look for:

• good and established credit. That’s why it’s important to pay your bills on time and keep your credit

card balances low as possible.

• If you have too much debt as well, where if you decided to throw your budget out the door, that is seen as a risk for the lender.

• adequate income to support your mortgage and your other obligations

• a property that is marketable, and that the purchase price is appropriate

•a down payment or equity in the home.

Most borrowers are all too often just worried about getting approved or what the rate is.  Finding the lowest mortgage rate possible is important.    It means you can usually afford a bigger mortgage.

The lenders want to make sure you can afford your payment and lenders use two simple calculations to estimate how much mortgage and debt you can afford to carry.  This is the Gross Debt Service Ratio (GDS) and the Total Debt Service Ratio (TDS).

The lender has underwriters that perform checks on everything, from are you actually working, to does your paystubs match what you said you make for income.  They will often require the below list. 

Letter of employment- starting income, start date, non-probationary,  title, and signed and dated.

Pay stub- Last two

MLS (Multiple Listing)-   Some lenders don’t like private sales.

Bank statements-  to verify savings

Investment statements

Offer to Purchase

Firm sale on current home

Gift letter

Loan balances

Mortgage statement

Credit card statements

Notice of assessment (NOA)

T1 General

T4(s)

Verification of business- if self-employed.

Lenders will often ask the Alberta Mortgage Broker to prove that the client has the 5’C’s of credit.  Usually credit score will not determine if the deal is approved rather it will be used in finding the lowest mortgage rate possible.