Lintott Law
Advising On Real Estate And Foreclosure Law In Calgary
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Homebuyers 101: Shopping For A Mortgage

Buying a house is the biggest investment most people will make. Getting the money to buy the house will be your greatest challenge. Borrowing the money is the only option for most people. That means obtaining a mortgage: a loan in which the lender can seize the house and sell it to pay off the loan if you cannot meet the mortgage payments.

Where To Get A Mortgage?

You can borrow from a mortgage lender or mortgage broker.

Mortgage lenders include:

  • Banks
  • Mortgage companies
  • Insurance companies
  • Trust companies
  • Loan companies
  • Credit Unions

Carefully check the interest rates and conditions each lender offers. Do not commit to a lender unless you clearly understand and approve the mortgage’s terms and conditions.

Mortgage brokers find a lender for you. Ask the broker which lenders it deals with, as all lenders don’t work with all brokers. You won’t have to pay the broker, as they get commissions from lenders for organizing the mortgage.

Prepare Before Looking For A Mortgage

A lender will not consider offering you a mortgage until it pre-approves you. You must provide the lender with this information to win pre-approval:

  • A credit report – Lenders generally give mortgages to borrowers with higher credit ratings.
  • Proof that you can pay the down payment and other costs.
  • A list of your current assets, including cars, boats or a cottage.
  • A list of your current debts, including credit card balances and limits, child or spousal support amounts, loans (car, student and others) and lines of credit.
  • Proof of employment and current salary. This includes a current pay stub from your employer, and a record of the length of time you have worked for your employer.

Pre-approval of the mortgage

The lender analyzes this information and then decides the maximum amount of money it will lend you, and the interest rate you will pay. The lender may lock in the interest rate offer for up to 120 days.

Even so, the lender could still refuse to grant your mortgage. It may not approve an overvalued property you want to buy, or decide that your credit rating is too poor to cover the amount of the loan.

Mortgages can be tricky to arrange. If you have any concerns about getting a mortgage, consult an experienced real estate lawyer for help.

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Calgary, AB T2E 2V9

Phone: 403-879-1613
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