One of the first things you should determine when considering purchasing a home is how much you can afford and who will be willing to lend you the money.
Here in Edmonton you will have literally hundreds of choices of mortgage providers. Be careful about asking too many of them to run credit checks on you however. Every time your record is submitted to the credit bureaus, (a kind of database for lenders to look at how well you pay your bills) it may negatively affect your rating.
Your Existing Bank
Applying to the bank that carries your chequing account and where you pay your bills would be an obvious choice for many potential home buyers. And why not? They know you. They trust you and they want more of your business right? In many cases this is true. The application process may be more straightforward and your record of paying bills will be well known to them. In order to please you, they might also be able to offer you an attractive rate. However, there are always strings attached. That is strict conditions to the mortgage contract. For example, you must guarantee to keep the mortgage for certain period of time, say 5 years or they will seriously penalize you.
Perhaps the one draw back to working with a Mortgage Broker is that you will have to provide more information about yourself and income than if you were to work with your regular bank. However, in many cases the upside overcomes this slight inconvenience.
The major benefit in working with a Mortgage Broker is that they will shop around the entire market for you, based on your borrowing needs and your credit score (your borrowing reputation). A Mortgage Broker will consider not only your existing bank as a lender but also all of the other banks and some lenders that you have never heard of. Some lenders are very picky and only take on clients that have squeaky clean records. Other lenders will be interested in taking clients who are self-employed or perhaps ‘new Canadians’ who don’t have a credit record but who do have a good down payment.
The market is wide open and good Mortgage Brokers know where to shop for you. Oh and by the way, in most cases their fee is paid by the mortgage provider, not you.
And finally, for a list of things that could screw up your application click on THIS LINK