December 11, 2023

6 Tips for Successful Obtaining or Renewing a Mortgage

Your project of becoming a homeowner requires a lot of planning. First-time homebuyers especially have every reason to develop a solid strategy if they want to make their dream come true. In this article, we share six tips that facilitate obtaining or renewing a mortgage. Listen to the Real Estate in Motion podcast series presented by the Quebec Professional Association of Real Estate Brokers. In the 17th episode, Audrey Hubert-Vallières, National Bank Mortgage Development Manager, shares key advice on the subject. 


Preparing for homeownership: the mortgage

According to Audrey Hubert-Vallières, there are three key steps before buying a property. Here are her top recommendations for first-time homebuyers.

1. Prepare, prepare, prepare

Review your priorities, update your budget, plan future expenses … all initiatives that help determine the financial structure that best suits your project. This step will help you as you plan to buy a home and which takes any changes into account.

2. Save for the down payment

Next, determine where your down payment is coming from. To do this, think about how potential withdrawals could affect your savings and implement advantageous tax strategies.

For example, your down payment can come from:

  • your savings account
  • an investment
  • your RRSP through the HBP program
  • RRSP loan strategy
  • a TFSA
  • an FHSA
  • refinancing a current property

When the time comes, the need to use mortgage insurance or not will be based on the percentage of the down payment.

3. Obtain a pre-approved mortgage

Although mortgage pre-approval is not obligatory, Audrey Hubert-Vallières specifies that it is strongly recommended: “It is very important to obtain mortgage pre-approval as it allows you to know your borrowing capacity and creditworthiness. It’s also a way to identify the price range of properties you can afford and help your real estate broker know the type of property you are looking for,” she explains. Note that a pre-approved mortgage is valid for six months and provides you with a guaranteed interest rate based on the complete analysis of your financial portrait.

Your debt-to-income ratio also has an impact on the amount you can borrow. You can borrow up to 3.5 times your gross income – before taxes and with no debt. In other words, for every $100,000 of income, you can obtain $350,000 in mortgage financing. This scenario may, however, vary depending on current interest rates.

Mortgage renewal: absorbing the payment shock

Is your mortgage up for renewal? Audrey Hubert-Vallières gives three suggestions on how to manage the payment shock.

1. Consider various scenarios

Thinking about potential scenarios will allow you to estimate the amount of your mortgage payments based on current rates. In this way, you can make changes to your consumption habits before renewing your loan.

2. Set up an emergency fund

Setting aside some savings will make it easier to weather the storm. Reviewing your lifestyle and adapting it to your new reality will also help you manage your situation.

3. Adjust your budget

It may also be wise to reevaluate your financing strategy so that you can adjust your budget according to your new mortgage payments.

To discover the biggest trends in the real estate market and get more expert advice, check out our blog. And to find the best home that works for you, team up with a real estate broker who will be able to provide you with expert guidance. With proper planning, homeownership is an attainable dream.

See also:

Everything You Need to Know About the Mortgage Stress Test

Buying a property: the importance of a good credit score

How to choose the best mortgage

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