Everyone knows that buying property is expensive, so when mortgage renewal time in Ontario comes around, it’s an opportunity to check various deals and save money.
Whether you’re looking for a better rate on a mortgage renewal or aiming to borrow for a new mortgage, it’s important to note that banks and other lenders look at a number of key factors when you apply for a mortgage. This post will highlight those factors and give you the best tips on how to get the best mortgage rate.
- Improve your credit score. If you don’t intend to apply for a mortgage immediately, improving your credit score is something you can work on until you are ready to submit a mortgage application. Mortgage renewal means first checking your credit score online and looking at any areas of weakness to see if you can deal with them. Therefore, always pay off bills on time and never miss a payment.
Have Steady Employment
- Steady employment. Lenders prefer to approve mortgages for people who are steadily employed. That means being, approximately, at least two years in your job. If you have changed jobs, then ideally it should be for a promotion and one that pays more. If you are self-employed, you will face stringent checks. This is because if your business fails, you will still need to maintain your payments and this can be challenging if it means finding new clients quickly. For self-employed people, you should have had the business for at least three years. You will have to be diligent with your paperwork, too, when it comes to mortgage renewal.
- Conservative spending. Watch your spending and don’t let your credit card balances get too high if you want a mortgage renewal. If possible, pay your balances off in full each month. Applying for a mortgage when you are debt-heavy doesn’t give a good impression and can affect your credit score. This tip applies even after your mortgage has been approved in principle and before the money has been transferred to your account. Don’t suddenly rush out and buy a car or a new fridge, as this could be flagged by the mortgage underwriter.
Save and Shop Around for the Best Deal
- Save, save, save! Every bank or lender will appreciate a potential mortgage applicant who has more to contribute than an application form. If you have a pile of cash to add to the loan, you will impress your bank and improve your chances of getting a mortgage.
- Shop around. This may sound obvious, but shop around for the best mortgage renewal deal. There are different types of mortgages and deals out there. If you don’t understand them, read a lot and ask questions. As well, work with a broker to find the best mortgage deal for you. Websites like ratehub.ca, lowestrates.ca, and ratesupermarket.ca are often good places to start when comparing mortgage rates.