How to Apply For a Mortgage

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Mortgage is a debt instrument secured by the collateral of a specified real estate property, which the borrower has to pay back to the lender within a specific period of time with a predetermined set of payments. Both individuals as well as real estate investors get mortgages to purchase properties without paying the entire value of the property upfront.

If you are also planning to buy a house or any other investment property and want to apply for mortgage, you have come to the right place. Continue reading to find out how you can apply for a mortgage and what are the prerequisites that you need to consider in order to get your mortgage approved.

Applying for a mortgage loan is about four main things, stable income, a sound credit history, making a sound choice on the property you are buying and the amount of down payment you already have. All of the above mentioned factors work together to determine which mortgage options suit you the best as well as the interest rate for repayment of the debt.

Stable Income

Stable income is something that the mortgage lenders will want to confirm before approving your loan. If you are employed, you may be required to show a letter of employment confirmation as well as recent pay slips, listing the details of your monthly salary. Most mortgage lenders also ask the applicants to produce Notice of Assessment forms (a form that you receive after filing your annual taxes) from CRA dating back to 2 years. Remember, your lender may also call your employer to confirm the details of your salary as well as your employment status.

Credit History

Credit history is something that every mortgage lender reviews before considering an application for grant of loan. The most desirable credit score for obtaining a mortgage is 680 and above.


Your property choice will also impact your mortgage qualifying process, since it will be the lender’s security, in case you fail to repay the mortgage. Given this, the lender will be more interested about the value of the property, as well as its location and condition.

Down payments

Down payments are not always required because there are mortgage programs that offer 100 percent financing. However, if you have a down payment equal to 20 percent or more of the purchase price of the property, then the lender will not require default insurance and other premiums. Such a mortgage is called conventional mortgage. However, if you have less than 20 percent of the purchase price then the mortgage lender will insure your loan against default.

Sign the agreement

Once everything is in order, you will be required to sign the mortgage agreement and pay related fees etc. The terms of the mortgage and the payment schedule should be carefully reviewed and you shouldn’t have any issues as long as you continue making regular payments.

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