What You Need to Know Before Applying for a Mortgage by Vanda Di Michele

Thursday Oct 15th, 2020


With the ongoing pandemic, many Canadians are wondering if it is a good time to apply for a mortgage or refinance their homes. These unprecedented times have caused the Bank of Canada to lower interest rates, and to keep it at a low until 2022. With rates as low as 0.25%, now is a great time to apply for a mortgage or refinance your home. For first-time homeowners, there are many things to know, and learn, about the current market, and how to apply for a mortgage.

Getting a mortgage can seem like an overwhelming process. There are many valuable variables to consider when applying and know the importance of before purchasing their first home and taking on a mortgage.

Down payments*

This chart (per Canada.ca) explains the minimum down payment amount depending on the price of the home.

Price of home

Minimum down payment amount

$500,000 or less

5% of the cost

$500,000 – 999,999

5% of the first 500,000, plus 10% of the remaining balance

$1 million or more

20% of the cost

So, save, save, SAVE. If that isn’t enough, there are many incentives in Canada to help first-time buyers afford their down payment.


Credit is one of the utmost important things to keep in check in preparation for a mortgage. Pay your bills on time, don’t exceed 50% of your available limit, don’t ever skip a payment, pay what you can, and always find new ways to improve your score. There is lots of advice that you can receive and find to help improve your score. For example, Canada.ca suggest that using different types of credit (credit card, line of credit, loan), can help improve your score. However, you should only do so if you can pay back any money you borrow.

Type of Property*

           Know what you are buying before you contact your lender. There are many variables about the property that can help the approval process or deter it. Be transparent and do your research beforehand. For example, if the property has a rental unit this can help you qualify for a mortgage. Or if there is structural damage to the home, this can lead lenders to deny the application.


There are many things to review and consider before applying for a mortgage. That’s why it’s important to get organized and be prepared. Having a steady source of income is also an important thing to secure before considering applying for a mortgage. First-time homeowners should also sit down with a broker to help them get organized and help along the way. Getting pre-approved is the ultimate goal of having purchasing success in the future.

Azie Pouragha, of the Concierge Mortgage Group, advises, that if first-time home purchasers are unsure of their financing, that they should consider including a financing condition in their offer. She says, “If a lender requires an appraisal, you want to ensure that the appraisal comes in at the purchase price. If it doesn’t, the homebuyer would be responsible to come up with the difference. If you do not have these extra funds available, then you should not proceed with that specific property. Also, in the financing condition period, you can ensure that you receive a commitment from a lender. This way you can be more at ease that a lender has approved you and can see what conditions there are to fulfill in order to be 100% sure to remove the financing condition.”

While buying your first home, and taking on a mortgage is a huge step, it doesn’t have to be scary. Doing research, keeping track of your credit, and getting organized are the three easiest ways to get yourself pre-approved!




*This blog was written with the help and knowledge of broker, Azie Pouragha, of the Concierge Mortgage Group.

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