Derek Ladouceur is all about making life as easy as possible for his buyers.
“This is [the] biggest decision you’re going to make financially and you’re stressed out enough as it is. My goal is to make that, the whole experience, as stress-free as possible,” he narrates in a looping video on his homepage.
Part of relieving that stress for the RE/MAX Hallmark agent means partnering with a veteran mortgage broker that he can refer to his buyers. In this case, it’s Robert Clancy of Safebridge Financial Group who Ladouceur says he started working with not only because he knew his stuff, but also because he was relaxed about the mortgage process and, like Ladouceur, was interested in putting clients at ease.
Ask Ladouceur what knowledge he’s absorbed from Clancy in terms of mortgage wisdom and he says, “He picked it up from me.”
Okay then. Let’s put that knowledge to the test.
What is the easiest most stress-free way to get approved for a mortgage?
First, whatever realtor you use to help you buy your property, they should have a great mortgage broker behind the scenes that they can match with their clients.
From there, the mortgage broker is going to ask those clients for lots of information. The realtor should let the buyer client know that the broker is going to ask for that info. They’re going to ask to see things like the buyer’s last two years of T4s and income tax statements. And, a credit check is going to be done on them, so as buyer client you have to be prepared to have that information in hand.
When your realtor reaches out to you he’ll say, “These are the things that I need and I need to get these questions back to my mortgage broker immediately, so I can get you pre-approved and let you know how much you’re approved for.”
Pre-approval is set for a certain time period, like 100 days, so what a lender has said is for the next 100 days your pre-approved for a certain mortgage amount, but that doesn’t necessarily mean the place that you buy will be appraised at that value. For example, if you have an approval for $700,000 and you buy a condo for $680,000, but the bank comes in and says, “This condo is only worth $620,000,” they will only give you a mortgage for $620,000, not the $700,000 that you were pre-approved for.
How much you’re approved for depends on factors like how much you have in savings, your credit rating and more. If you have bad credit, are not making enough money or don’t have a large enough down payment, you might not be approved by the bank for a mortgage.
The great thing about a mortgage broker – and why I work with one of the best ones in the industry – is that there’s always another option. There are credit unions now and “B” and “C” lenders. And “B” lenders aren’t charging much more than what an “A” lender is and an “A” lender is a bank. A “B” lender could be charging one point higher, but at least you’re getting approved and you’re able to look for a home now.
It’s important to know that the realtor your working with has a great mortgage broker in place that has access to different facets for a potential mortgage.
At the end of the day, it’s about who’s is going to underwrite the mortgage, so you need to make sure that whoever you have in place has more than one option available. They may say, “Sorry, I’ve taken it to all my A lenders and there’s just no way, but I’ve taken it to one of my B lenders and they’re going to underwrite the mortgage.”
It’s not so much about what makes it easier to get approved, it’s about the different things your realtor has in place so that if one door closes, they have another door that could potentially open for you.
With first time home buyers, you are going to get some money back through your land-transfer rebate, so that helps a little bit. In regards to the stress-test, it affects everyone. People that could afford a $600,000 condo, can only afford a $520,000 condo now and you’ll be hard-pressed to find a $520,000 condo in downtown Toronto that meets what you’d be looking for. You have to be prepared that even though you may have a decent amount of savings, you may not work in a job that allows you to get the price point you’re looking for based on the stress test.
It might be a matter of putting as much money away as you can or getting approved for a lower amount, buying that property, holding onto it for a couple of years, selling it and then using that money to help you with a larger purchase.