If you find yourself in the market to buy a Montreal condo, you’ll also want to have a solid game plan moving forwards. Not all people are home loan or real estate savvy, and that’s OK (we’re all specialists at something). If you’ve been looking for some simple advice in this regard, you’ve come to the right place.
Prepare Your Income Statements
You’ll need to get some documentation in order before you can even consider getting approved for the Montreal condo that you fancy. Banks typically want a checklist that includes some of the following:
- Two recent bank statements.
- Proof of employment.
- Two recent pay stubs.
- Proof of citizenship.
- Tax returns for two years.
Assess Your Down Payment
To avoid having to tender mortgage insurance as a subprime borrower, you’ll need to tender a 20% down payment. Now you can, in some cases, put down less than this amount, but you might end having to pay a monthly premium on default insurance as result. Generally speaking, banks like to see 20% down to approve loans for homes these days.
Know The Current Interest Rates
Understanding what the current mortgage interest rates are is going to be very helpful in you determining your borrowing capability. Thankfully, there are plenty of online resources that are available for assessing this. One of the most popular is a free service called Bank Rate. You can use their handy mortgage calculator to find out what your rate and monthly payment would be in just a few simple steps.
Check Your Credit Report
The largest determining factor in you getting approved to buy that Montreal condo will wager on your credit report. Did you know that over 20% of people have no idea what their credit report says? Take the time to run your own credit so there are no surprises that come back from the bank. You can always dispute entries and fix your credit if you find inconsistencies.
Consider Using A Credit Union
You do have options with various banks. But one of the best rates that you will be offered will come from a credit union. These banks have stricter borrowing requirements and do typically require a vested membership. It may be in your interest to become a member several months in advance of buying that Montreal condo, so you can take advantage of the lucrative benefits these unions offer.
Shop With Preapproval Letter In Hand
Once you have found a bank and have applied, they will usually respond with a preapproval letter that specifies a certain amount. This is where you get to smile and start your shopping process. With your preapproved amount in writing, you will be able to know what you can afford to spend down to the last penny. Now the fun begins: taking your time to shop for that dream home that you’ve always wanted.