Qualifying for a mortgage in Canada involves several factors that lenders consider to determine if you’re eligible for a loan. Here’s what they typically look at:
Income and Employment: Lenders want to ensure you have a stable income to repay the loan. They’ll assess your employment history, salary, and any other sources of income.
Credit Score: Your credit score reflects your creditworthiness. A higher score indicates you’re more likely to repay the loan, while a lower score may make it harder to qualify or result in higher interest rates.
Debt-to-Income Ratio: Lenders look at your existing debts compared to your income. A lower ratio shows you have more room in your budget to afford mortgage payments.
Down Payment: Having a larger down payment demonstrates your financial stability and reduces the amount you need to borrow, making you a more attractive borrower.
Property Appraisal: The property you’re buying needs to meet certain standards and be appraised at or above the purchase price to secure the loan.
Other Factors: Lenders may also consider your assets, savings, and financial history to assess your overall financial health.