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3 Tips to Prepare for your Mortgage Approval

Mortgage approval tips by yours truly (& Hui of course).



Many people don't know how to properly prepare to obtain a mortgage approval or pre-approval. Lenders look for specific things pertaining to the "5 C's of Credit" when making the decision to lend you money or not for that new purchase.


Let's go over some of the top things that come up:


Tip #1 - Monitor Your Credit


It is amazing how many clients want to get pre-approved without a credit check. This is an essential part of the process and has a heavy weight on the determining factors of your approval. Your credit score also highly determines the placement of your loan, and in turn, the interest rate and payments etc. Most banks require a minimum of 680 beacon score for approval (some exceptions) so be sure to pay that parking ticket that went to collections in high school prior to getting your pre-approval completed.


Tip #2 - Do Not Change Employers


Between the time you get your pre-approval and the time you obtain an accepted offer, do not change employers. If you have to change employers, I highly recommend staying in the same industry until your mortgage closes and you have the keys in your hand for that new place. Lenders like to see stability in your employment history. It shows character, which is a huge component to the approval process.


"You express the truth of your character with the choice of your actions." – Steve Maraboli

Tip #3 - Payout High Interest Debts


One of the biggest deterrents from an underwriting perspective is a client with several maxed out credit cards or lines of credit above limit. It pertains to the client's ability to repay and maintain/manage debt. If you have the capability, I highly recommend paying down or paying out high interest debts prior to applying for your mortgage approval. It will increase the likelihood of an approval (coming straight from a previous underwriter over here folks!).


In conclusion, the lender wants to see that you are a responsible person with the ability to repay debts as agreed. You wouldn't loan money to someone with a history of not repaying, would you? Practice the "5 C's" - character, capacity, collateral, capital & conditions - and you will be on the way to homeownership in no time.

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