How to Get Approved for a Mortgage in Ontario

Getting a mortgage in Ontario is no easy fit,—especially with the housing market at an all-time high. Luckily, taking the time to understand how to qualify for a mortgage and partnering with a professional mortgage team like The Mortgage Advisors can make the process quick and seamless, with a predictable positive outcome. 

Let us take a closer look at what you will need to get approved for a mortgage.

Understanding the Mortgage Approval Process in Ontario

The mortgage approval process from beginning to end can take from a couple of days up to a month or more—however, most applications will be approved within 2 to 10 days. 

The process starts with contacting a mortgage broker or visiting a bank directly. It is always best to work with a mortgage broker, as it gives you access to multiple lenders at once, enabling you to shop around and choose the best deal. Next, you must obtain a pre-approval mortgage and look for a home within your pre-approved range. 

Once your dream home is found and the offer is accepted, your mortgage broker or lender will review the relevant documentation and facilitate the mortgage application. If approved, you will receive the funds on the closing date of your home purchase, with a real estate lawyer transferring them directly to the home seller.

Key Requirements for a Mortgage in Ontario 

To qualify for a mortgage in Ontario, you would need to meet a few key requirements:

• Good credit score. Most lenders are looking for a credit score of at least 650 to 680, along with a good track record of bill payments.
• Stable employment and income. You will need to provide a letter of employment and recent paystubs to prove that you have a stable income coming in.
• Total Debt Service (TDS). The ratio of your total monthly debt payments over gross monthly income must be below 44% to get approved by most A-grade lenders.
• Sufficient down payment. The minimum down payment requirement ranges from 5% to 20% of the purchase price, in accordance with the government’s guidelines. As a rule of thumb, cheaper homes will require less down payment, while more expensive properties will require more. Keep in mind any down payment that is less than 20% will require Mortgage Insurance (CMHC or Sagen) this premium is added to the mortgage.

Mortgage Pre-Approval in Ontario

Getting a mortgage pre-approval is not mandatory, but it is a great way to estimate your borrowing power and guide your home-buying process. Many realtors will require a mortgage pre-approval from their clients to demonstrate the seriousness of their intentions and confirm the acceptable property price range.

You can secure a mortgage pre-approval in Ontario by contacting a licensed mortgage broker like The Mortgage Advisors. While the process is quick and easy, some documentation—such as identification, income verification, and proof of down payment—is required to fully verify your pre-approval. This ensures you can shop for your new home with confidence

How to Increase Your Chances of Qualifying for a Mortgage

If you want to improve your chances of qualifying for a mortgage in Ontario, early preparation is key. Ideally, you should start planning months—or even years—in advance by focusing on strengthening your financial health and creditworthiness. Here are four key steps to take:

• Improve Your Credit Score: To boost your score, make sure to pay all bills on time and keep your credit utilization below 30% of your available limit. Additionally, avoid closing old credit accounts or applying for new credit in the months leading up to your mortgage application.
• Reduce debt levels. Paying off debt will reduce your Debt-to-Income ratio, thus increasing your borrowing power. Plus, fewer monthly debt expenses will create more room in your budget for additional mortgage payments.
• Increase Your Down Payment: The higher your down payment, the less you need to borrow, which can improve your chances of qualifying for a mortgage in Ontario. A larger down payment also demonstrates financial stability and may help you secure better interest rates.
• Maintain Stable Employment: Lenders prefer applicants with at least two years of stable employment in the same industry. A sudden career change or job switch right before applying for a mortgage could raise concerns about income stability, so it’s best to wait until after securing your mortgage before making major career moves.

Common Reasons for Mortgage Application Denials & How to Avoid Them

Mortgage applications are often denied if applicants have poor credit history, high debt levels, or insufficient income. As such, it is important to prepare for getting qualified for a mortgage well in advance, reviewing your financial health in detail, and taking proactive steps to strengthen it.

Unfortunately, even applicants who meet the qualification criteria can get rejected if they fail to provide all the supporting documents required by the lender. Working with a mortgage specialist will help to avoid any issues and increase your chances of getting approved.

Conclusion

Getting a mortgage in Ontario is a relatively straightforward process—but one that requires lots of advanced preparation and supporting documents. Luckily, The Mortgage Advisors are always available to provide you with expert guidance and facilitate the mortgage qualification process. Let’s chat about your mortgage—get in touch now.