If you’re in the market to buy a new home in Canada, you may find that your dream home exceeds your budget. However, there are ways to increase the amount of your mortgage and make that dream home a reality. In this article, we will explore various strategies and steps you can take to qualify for a bigger mortgage in Canada.
Contents
- How to Qualify for a Bigger Mortgage in Canada
- Increase Your Down Payment
- Increase Your Income
- Pay off Existing Debts
- Improve Your Credit Score
- Find a Lower Mortgage Rate
- How Mortgage Brokers Can Help
- Frequently Asked Questions
Increase Your Down Payment
One of the most effective ways to qualify for a larger mortgage is to increase your down payment. The minimum down payment required in Canada ranges from 5% to 20% of the home’s purchase price, depending on the price of the property. By saving up for a larger down payment, you can access a larger mortgage amount and have more purchasing power.
For example, if you’re looking to buy a home priced under $500,000, a 5% down payment is required. However, if you’re considering a home that is $800,000, your minimum down payment would need to be $55,000, or 6.9% of the purchase price. Increasing your down payment not only allows you to qualify for a larger mortgage but can also save you money in the long run by avoiding mortgage insurance.
Increase Your Income
Another way to qualify for a bigger mortgage is to increase your income. Mortgage lenders consider your income when determining how much you can borrow. If your preferred mortgage pre-approval provider is unable to give you the full loan amount you need, it may be time to explore ways to boost your income.
One option is to negotiate for a higher salary with your current employer. This not only increases your income but also demonstrates job stability, which lenders take into consideration. If negotiating a pay raise is not feasible, you could also consider finding a job that pays better or exploring additional sources of income, such as renting out a spare room or taking on a second job. Alternatively, you can apply for the mortgage with a co-signer, such as a partner or parents, who have a steady source of income, which can help you qualify for a larger mortgage.
Pay off Existing Debts
Your existing debts play a significant role in determining how much mortgage you can qualify for. Lenders examine your income-to-debt ratios, such as the Gross Debt Service Ratio (GDS) and Total Debt Service Ratio (TDS), to assess your ability to handle mortgage payments. Paying off outstanding debts can improve your debt-to-income ratio and increase your chances of qualifying for a larger mortgage.
Start by paying off high-interest debts, such as credit card debts and loans. Consider consolidating your debts into an installment loan to expedite repayment or extending the amortization period to reduce monthly payments. By reducing your debts, you’ll have more disposable income available to allocate towards a larger mortgage.
Improve Your Credit Score
Your credit score plays a vital role in mortgage approval and the interest rate you receive. A higher credit score not only improves your chances of getting approved for a mortgage but also enables you to access lower interest rates and larger loan amounts. Therefore, it’s essential to take steps to improve your credit score before applying for a mortgage.
Start by checking your credit score regularly to be aware of your current standing. Make sure to pay your bills on time and in full, as late payments can negatively impact your credit score. Avoid maxing out your credit cards and refrain from applying for new credit during the mortgage application process. By maintaining a healthy credit score, you increase your chances of qualifying for a bigger mortgage.
Find a Lower Mortgage Rate
Securing a lower mortgage rate can significantly impact the size of your mortgage. A lower interest rate means lower monthly mortgage payments, allowing you to allocate more towards the principal and reducing the overall cost of homeownership. To find a lower mortgage rate, it’s crucial to compare offerings from various lenders.
Different mortgage providers have different risk tolerances and profit margins, resulting in varying mortgage rates. Take the time to research and compare rates to ensure you’re getting the best deal. It’s also important to consider the terms and conditions of the mortgage, as different mortgage products may have different features and costs. Consulting with a licensed mortgage broker can help you navigate the mortgage market and find a lower mortgage rate that suits your needs.
That’s where Citadel Mortgages can be your potential partner for finding the best mortgage deal for you. Contact us today for more information.
How Mortgage Brokers Can Help
Mortgage brokers play a crucial role in helping borrowers find a bigger mortgage. They have access to a wide range of mortgage products and can guide you through the entire mortgage process. Mortgage brokers can help you navigate the complexities of qualifying for a larger mortgage and assist in finding the best rates and terms.
When working with a mortgage broker, they will assess your financial situation, help you determine the maximum mortgage amount you qualify for, and provide guidance on how to increase your chances of approval. They will also compare mortgage products from different lenders to ensure you get the best rate and terms available. Mortgage brokers have the expertise and industry knowledge to help you find a larger mortgage that fits your needs and financial goals.
Frequently Asked Questions
How can I increase my current mortgage?
If you already have an existing mortgage and are looking to increase it, you can explore options such as refinancing or obtaining a home equity line of credit (HELOC). Refinancing allows you to replace your current mortgage with a new one, potentially increasing the loan amount. A HELOC, on the other hand, allows you to access the equity in your home and borrow against it.
Can I Make my mortgage bigger?
It is possible to make your mortgage bigger by refinancing your existing mortgage or obtaining a second mortgage. Refinancing involves replacing your current mortgage with a new one, potentially increasing the loan amount. A second mortgage is an additional loan on top of your existing mortgage, allowing you to access additional funds.
How can I increase my mortgage volume?
To increase your mortgage volume, you can focus on increasing your income, improving your credit score, paying off existing debts, and saving for a larger down payment. These factors play a significant role in determining the size of the mortgage you can qualify for.
How much should I increase my mortgage payment?
The amount you should increase your mortgage payment depends on your financial situation and goals. It’s important to consider factors such as your monthly budget and long-term financial plans. Consulting with a mortgage professional can help you determine the right amount to increase your mortgage payment.
How easy is it to increase my mortgage?
Increasing your mortgage can be a complex process that involves various financial factors and lender requirements. It may require careful planning and financial adjustments. Working with a mortgage broker can simplify the process and provide expert guidance.
How can a mortgage broker help me find a bigger mortgage?
Mortgage brokers have access to a wide range of mortgage products and can help you navigate the mortgage market to find a larger mortgage with favorable rates and terms. Reach out to Citadel Mortgages for all your mortgage needs.
Qualifying for a bigger mortgage in Canada is possible by implementing strategies such as increasing your down payment, boosting your income, paying off debts, improving your credit score, and finding a lower mortgage rate. Working with a mortgage broker can provide valuable assistance throughout the process. Remember to carefully consider your financial situation and goals before making any decisions. With the right approach, you can secure a larger mortgage and achieve your homeownership dreams.
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