mortgage loan
Ghummaz Bhatti

Ghummaz Bhatti

Costly Mistakes: What You Avoid to Get a Pre-Approved Loan

Forbes encouraged the public to invest in Canada’s real estate early last year. In that article, the columnist enumerated five reasons to do so. Although the blog was targeting non-Canadians, it is safe to say that Canadians should not miss out on this investment opportunity.

To enjoy this privilege, you should avail of a mortgage loan pre-approval. After all, you do not want to be left behind. However, it would help to take the proper steps to get pre-approved. 

If you do not know what to do, you should keep your eyes glued. This blog has enlisted the help of seasoned mortgage brokers in Ottawa to guide you through the loan process. They have enumerated the things to avoid, and here they are:

Paying Your Debt Late

Doing this is probably the fastest way to deny your application for a mortgage loan. Mortgages are meant for payment of the loan, not for other bills. If your payment is delayed, your application could suffer the same fate.

If you have a poor credit score, you should take corrective measures. It includes paying your existing loans, credit cards and other dues. You should also make recurring payments on your credit accounts.

In addition, you should maintain a debt-to-income ratio below 43%. In other words, your income should be able to cover your monthly expenses, including your mortgage payment.

Taking on Additional Debt

If you find it difficult to pay your debts, you should not take on more debt. You may be thinking of applying for a credit card or a personal loan. The better option is to wait until you can do it.

Before you take on a mortgage loan pre-approval, you should know that your credit score should reflect your financial responsibility. It shows the potential lender that you are capable of handling additional debt. As mentioned earlier, if you have bad credit, you should try to improve it. It is the easiest way to convince the loan provider that you will be able to pay on time.

If you have a bad credit score, the lender could hesitate to give you a loan. However, it is better to have a bad credit score than no credit score.

Transferring to a New Job

If you are employed, you should not change your job unless you have concrete chances of improvement. If you opt for a transfer, you should present thorough research about the new firm or industry. You should also know that the transfer could affect your chances of getting a mortgage loan pre-approval.

A lender is less keen to lend money if you just transferred to a new job. It is a sign that you are still looking for stability. Instead of immediately applying for a mortgage loan pre-approval, you should wait a while.

Conclusion 

You should avoid the mistakes mentioned above if you seek a mortgage loan pre-approval. It is essential to remember that a mortgage is a long-term commitment. In addition, you should make a note that you should not forget the down payment. Although there is no explicit rule about giving a 20% down payment, it would be prudent to do so. 

Now that you know more, you should talk to Ottawa Mortgage Services. We have given mortgage loan pre-approval to Ottawa residents. Take that plunge and pursue a profitable real estate investment by getting that loan from us!

Contact Ottawa Mortgage Services to learn more

funding@ottawamortgageservices.ca

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