Mortgages are incredibly important types of loans that make it possible for Canadians to make the biggest purchase of their lives. Considering how important mortgages are, it’s essential to ensure that all steps toward applying for a mortgage are done correctly in order to avoid any issues with approval.
Unfortunately, mistakes are often made, which can completely derail real estate deals and leave buyers with no mortgage and no home.
In order to boost the odds of home loan approval, be sure to avoid making the following mortgage application mistakes.
Not Understanding Your Down Payment Options Are
A down payment is a necessary part of obtaining a mortgage. Think of it as somewhat like a deposit for a home purchase. Your down payment shows lenders that you are financially capable of affording and making mortgage payments (learn how to borrow your down payment here).
But there are certain requirements when it comes to making a down payment, as well as different options regarding how much to put down.
Depending on the type of mortgage you’re getting, your minimum down payment requirement may differ. For instance, a conventional mortgage will require a down payment of at least 20% of the purchase price of your home. This down payment amount will also allow you to forego paying mortgage default insurance premiums on top of your mortgage payments.
A high-ratio mortgage, on the other hand, allows down payment minimums as little as 5%. That said, the smaller the down payment amount, the larger the loan amount, and therefore the longer it will take to repay the mortgage. Furthermore, a down payment this small will also require mortgage default insurance, which will make mortgage payments a little more expensive.
Knowing what your down payment options are and how they will affect your bottom line is important to know right from the get-go.

Skipping Pre-Approval
Neglecting to get pre-approved for a mortgage can cause you nothing but grief, disappointment, and a headache.
A mortgage pre-approval letter will give you the chance to find out exactly how much you can afford and get approved for. Armed with this information, you’ll know exactly which homes to focus on and avoid wasting your time and emotions looking at homes that are far out of your reach.
Being pre-approved can also help you gain a competitive edge over other buyers and help sellers see you in a more positive light. By being pre-approved, you’ll be able to show sellers that you are able to secure a mortgage and are a qualified buyer.
Besides, once you’re pre-approved, the final mortgage approval process can move along faster after you’ve found a home you love and an offer has been accepted.
Should you spend your entire mortgage preapproval amount? Find out here.
Personal Information Errors
When you apply for a home loan, your lender will want to collect a number of important pieces of personal information from you. This includes things such as your date of birth, address, social insurance number, etc.
But if the information you supply is incorrect or inaccurate, this could hold up the mortgage approval process. In some cases, it could even derail a real estate transaction if too much time elapses between offer acceptance and final mortgage approval.
Including False Information or Omitting Information
In addition to making mistakes in the information you provide the lender, you could also be harming your chances of getting approved for a mortgage if you willingly and knowingly include false information or neglect to include important information that the lender would want to know.
Not only is this dishonest, but it could also be considered fraudulent and cause your mortgage application to be denied.
Not Checking Your Credit
Your credit score is an integral part of the mortgage approval process. If you want to increase your chances of getting approved and obtaining a low-interest rate, you’ll want to make sure your credit score is as high as it can be (for minimum credit score requirements, click here).
If it’s not, you could find it difficult to get approved. And even if you do manage to secure a home loan, the interest rate will be much higher as a result of a lower credit score.
Checking your credit before you apply for a mortgage will afford you with the benefit of knowing where your credit score stands. Understanding what your credit is like will help you determine whether or not you should be taking measures to improve your score before you apply for a mortgage.
Giving yourself some time to give your credit score a boost, if necessary, can increase the chances that your lender will approve your mortgage application at a relatively low-interest rate.

As already stated, your lender needs a lot of information in order to cover all the bases and make a more informed decision about whether or not your mortgage application will be approved. But that requires a lot of cooperation and work on your part.
If you’re tough to get a hold of or are not cooperative with your lender, you’ll only make the mortgage approval process move along much slower, which could even put your real estate deal in jeopardy.
Making a Major Life Change
Your lender is basing your ability to secure a mortgage on a few factors that they’re going to assume will remain the same, and your income and employment status are two of them. If you make a change to your job status or income level in the middle of the loan application and approval process, you could throw a wrench in the deal.
Similarly, adding new debt to the pile could also make it more difficult for you to secure final mortgage approval. The amount of debt you had going into the initial mortgage application process is what your lender is basing your approval status on. If you add more debt to the pile, you could find yourself being denied a mortgage.
Ideally, no major changes in your employment status or debt situation should take place while you’re waiting for final mortgage approval.
Everything you need to know about the mortgage stress test
Finding The Right Lender
There are plenty of mortgage lenders out there offering mortgage products. But not all of them are necessarily well suited for every homebuyer. To make sure you’re getting the best mortgage product for your situation, it’s important to take some time to shop around for the right lender to work with.
Lenders can come in the form of banks, credit unions, and private alternative lenders. Be sure to find out all the products they have to offer and compare mortgages to make sure you’re applying for the one that’s best suited for you.
To learn how to enter the Canadian housing market, check out this article.
Looking to Apply For a Mortgage?
If you’re ready to become a homeowner and need some help to finance such a large purchase, working with a mortgage broker or lender is the first step to take. Let Loans Canada connect you with a mortgage lender in your area who can meet your needs.
Note: Loans Canada does not arrange, underwrite or broker mortgages. We are a simple referral service.