Mortgage FAQ – Edmonton & Alberta

Got questions about mortgages? You’re not alone. Here are the answers to the questions I hear most from my clients.

Q: Does your credit score decide if you get a mortgage?
A: No. Your credit score is important, but it’s only one factor. I’ve approved hundreds of clients in Edmonton and Alberta with credit scores under 600. What matters more is your overall financial picture: income, employment history, debt-to-income ratio, and down payment size.
Q: What do lenders REALLY look at when reviewing my mortgage application?
A: Lenders evaluate four main things:

  • Income & Employment – Stable income is more important than your credit score
  • Debt-to-Income Ratio – How much of your income goes to existing debt
  • Down Payment – The larger your down payment, the more flexibility lenders have
  • Credit History – Less about the score, more about your payment patterns
Q: I have bad credit. Can I still get approved for a mortgage?
A: Yes. “Bad credit” doesn’t mean automatic rejection. What lenders care about is the reason for your bad credit and what you’ve done since. Late payments from 2 years ago? Less concerning. Recent defaults? We need a strategy, but approval is still possible.
Q: What’s the difference between mortgage pre-approval and pre-qualification?
A: Pre-qualification is informal—it’s an estimate. Pre-approval is formal—it means a lender has verified your income, credit, and assets and is willing to lend you a specific amount. Always get pre-approved before house hunting.
Q: How much down payment do I need?
A: In Canada, you can put down as little as 5% for a home under $500,000. However, anything under 20% requires mortgage default insurance, which adds cost. We can run the numbers to see what makes sense for your situation.
Q: How long does mortgage approval take?
A: Typically 3-5 business days for pre-approval. Once you have an offer on a home, full approval usually takes 7-10 business days, depending on complexity and how quickly you provide documentation.
Q: Should I choose a fixed or variable interest rate?
A: Fixed rates lock in your rate for the term—your payment never changes. Variable rates fluctuate with the market—your rate can go up or down. Fixed rates provide certainty; variable rates can save money if rates drop. Your choice depends on risk tolerance and the current rate environment.
Q: I’m self-employed. Can I get a mortgage?
A: Absolutely. Self-employed borrowers need to provide more documentation (usually 2 years of tax returns and financial statements), but approval is definitely possible. We work with lenders who understand self-employment income.
Q: I have multiple jobs/income sources. How do lenders treat this?
A: Lenders can count multiple income sources if each has been stable for 2+ years. Freelance, contract, rental income, and side businesses all count—as long as you can document them.
Q: How often should I review my mortgage?
A: At minimum, when your term is ending. But I recommend reviewing annually to ensure you’re on the best rate and term for your situation. Rates change, and better options may become available.
Q: What’s the difference between pre-payment privileges and penalties?
A: Pre-payment privileges let you pay extra toward your mortgage without penalty (usually up to 15-20% annually). If you break your mortgage early before your term ends, you pay a penalty—either 3 months interest or the Interest Rate Differential (IRD). Understand these before signing.
Q: How can I pay off my mortgage faster?
A: Several strategies: increase your payment frequency (bi-weekly instead of monthly), make lump-sum payments, or set up accelerated payments. Some mortgages allow up to 20% extra annually. We can model different scenarios to show you the impact.
Q: Should I refinance my mortgage?
A: Refinancing makes sense if: rates have dropped significantly (usually 0.5%+ lower), you need cash for renovations or debt consolidation, or your situation has changed. We calculate the break-even point to ensure it’s worth the penalty and legal costs.
Q: What happens if I miss a payment?
A: Your lender typically allows 15-30 days before reporting it as late. Missing payments damages your credit, triggers late fees, and can eventually lead to foreclosure. If you’re struggling, contact your lender or broker immediately—options often exist.
Q: How much home can I afford?
A: A common rule: your mortgage shouldn’t exceed 4.5x your gross annual income. But this varies based on other debts, down payment, and interest rates. We use mortgage calculators and stress tests to determine your real maximum.
Q: What is CMHC insurance and do I need it?
A: CMHC (Canada Mortgage and Housing Corporation) insurance protects lenders if you default. It’s required for down payments under 20%. It adds 2-4% to your mortgage but allows you to buy with less down. After you reach 20% equity, you can typically remove it (with a new appraisal).
Q: Can I get a mortgage with a co-signer?
A: Yes. A co-signer (usually a parent or family member) guarantees the mortgage if you default. They don’t own the home but take on the debt obligation. This can help if your income or credit is marginal. Both co-signer and borrower’s credit and finances are evaluated.
Q: How can I improve my credit score to qualify for a better mortgage?
A: Pay all bills on time, reduce outstanding debt, don’t close old credit accounts, and limit new credit applications. However, don’t delay buying a home waiting for perfection—many mortgages are available for scores in the 600-650 range. We can often qualify you now.
Q: What documents do I need for mortgage approval?
A: Typically: recent pay stubs, 2 years of tax returns, bank statements, employment letter, proof of down payment, and property appraisal. Self-employed applicants need additional documentation. We provide a complete checklist upfront.

Ready to Get Pre-Approved?

Still have questions? Let’s talk. I’ve helped hundreds of Edmonton and Alberta clients navigate their mortgage journey—including people who thought they had no chance.

Contact Paul Zieba
📧 pzieba@mortgageconnection.ca
📞 780-619-4901
📍 Edmonton, AB | Serving all of Alberta