Ask Us Anything: Your Mortgage Questions Answered

3 minute read

Applying for a mortgage can be intimidating! Here are some answers to your most common questions:

How do I apply for a mortgage?

Applying for a mortgage is easier than you think! There’s a couple of ways to do it. You can book an appointment online with a member of our Personal Lending Team, or simply stop into a branch. That’s a good time to complete a pre-approval, so that you know what you can afford before you put an offer in on a home.

What percentage of my income should go towards my mortgage?

Generally speaking, no more than about 25 to 35% of your income should go towards your cost of housing. That should include your mortgage, but also taxes, condo fees and heating costs.

What factors are considered to approve a mortgage?

In order to approve a mortgage, we consider your employment history and income. We also look at your credit worthiness by doing a credit check. We update your net worth statement and take any assets and liabilities you already have into account.

How do I know how much house I can afford?

You will need at least 5% of the purchase price as a down payment. Then you need to take into consideration your income, your net worth, and your credit score. Speak with a member of our Personal Lending Team and they can help you figure out how much you can afford. There are also handy mortgage calculators that can help.

Can I get a mortgage with bad credit?

If you are concerned about your credit history, there are some options. Your financial advisor or personal lender can help you come up with solutions that could include a plan to improve your credit score, or to find a co-signer for your mortgage.

What do I need to apply for a mortgage?

What you need will vary depending on your unique situation. However, you will need documents that verify your income and employment stability. You will also need documentation of your assets and liabilities. Make sure you check with your lender ahead of time as to exactly what documents are required.

What is the difference between a fixed and variable rate mortgage?

A fixed-rate mortgage simply means that the interest rate on your mortgage is fixed – or will stay the same – for the term of the mortgage, usually somewhere between 1 and 5 years. A variable-rate mortgage means that the interest rate fluctuates according to the Prime Interest Rate, which is set by banks and credit unions based on the lending rate set by the Bank of Canada.

How do I decide between a fixed or variable rate mortgage?

This depends on what you are looking for. If you are looking for stability and the peace of mind that comes from knowing what your mortgage payment is going to be for a period of time, then a fixed-rate mortgage is probably your best option. On the other hand, if you are comfortable with a bit more risk and feel that interest rates may decrease, you might want to consider a variable-rate mortgage.

Be sure to check out our YouTube channel, where you can find answers to your mortgage questions, and any other financial question you might have. At Kindred, our Personal Lending Team can help guide you toward the mortgage that’s right for you. Book an appointment or call 1.888.672.6728 to get started. You can ask us anything!

Kindred Credit Union

At Kindred, we believe you have a better choice for banking. We believe values and faith are central to life, and financial decisions are not values-neutral. In fact, we think financial decisions can impact the world in amazing ways—so our values are integrated into everything we do. We call this Banking with Purpose.

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