When applying for a mortgage, the lender will review your income. You should submit a letter from your employer confirming your income, as well as your last two years’ tax returns. You should be up-to-date with any outstanding taxes.

While all of that may already be common knowledge, it pays to know what other requirements lenders may need from you. This blog post will shed light on other things mortgage lenders may review during the application process.

Requirements for First-Timers to Qualify for a Mortgage

1 – Employment History

Your mortgage lender will use your employment history to determine how much they’ll lend you. They’ll also look at how often you’ve switched jobs over the years, as well as how long your employment has been at the same company.

2 – How Much Debt You Have

Your credit report will provide your mortgage lender with an indication of how much debt you have and how you’ve managed it over the years. If you have a good track record, it will give you a better shot at getting a mortgage.

3 – Credit History

Your credit report details your payment history and how much you owe. A history of on-time or consistent payments will bode well for your chances of getting a mortgage, as well as short credit history.

4 – Income

Most mortgage lenders will require you to have a minimum level of income (typically at least three times the monthly payment) before they’ll approve a mortgage. Having a consistent income over the years will help boost your chances of getting a mortgage.

5 – Address History

Your address history is also part of your credit report. It shows how long you’ve lived at your current address, as well as your other addresses. Moving frequently over the years can make it more difficult to get a mortgage.

Tips To Qualify for a Mortgage In Canada

1 – Save for a Down Payment

One of the first things you can do to qualify for a mortgage is to save for a down payment. Lenders will typically require you to have at least 5% down (or more, depending on your financial situation).

You can fund your down payment with your earned income or with an inheritance. The money you use should be yours to keep and not borrowed.

2 – Pay Off Debt

If you’re trying to get rid of some debt, you may have a better shot at getting a mortgage. You should also have a good credit history, especially if you’ve been paying off your debt on time.

3 – Make Sure You Have Regular Income

It’s vital that you have a stable income to help you qualify for a mortgage. You’ll want to show your lender your employment history, as well as your income.

Conclusion

Obtaining a mortgage becomes easier when you work at it. If you focus on improving your financial situation, chances are you’ll get one. If you want to take a step back to determine how to improve your financial situation, you can talk to a mortgage specialist. They can help you get a clearer picture of how to improve your chances of getting a mortgage.

If you need help to finance your home, contact Mills Financial Group. We are an award-winning Canadian mortgage brokerage with a national team of over 800 qualified and accredited mortgage brokers, agents and associates providing residential and commercial mortgage services.