# data[].attributes.body
In this video, Brandon has talked about how to save money on taxes. RRSP is an investment account and is a tax free account. The CRA withholds the tax which we are owing in taxes and we did get the tax refund as we file tax at the course of a year. Examples were provided in the video that how RRSP deferral the tax. Eventually, by investing in RRSP helps to save tax. Also, we can take money out of RRSP but with some circumstances.

I choose this video because I have looked at lot of videos but I did actually understood what an RRSP is and what it does in regards to our money. I also understood that it is not an savings accounts rather it is an investment account irrespective of the name RRSP(saving plan).

# data[].attributes.attachment_link.title
RRSP Explained for BEGINNERS (EVERYTHING YOU NEED TO KNOW)

# data[].attributes.body
Here you will be learning about investments. Getting an understanding about mortgage and Registered Retirement saving plan (RRSP). Basically an investment is an asset which can be passed on to generations.

# data[].attributes.body
The benefits of RRSP are being discussed in this video and is a long-term investment and is not a saving whereas is a investing account. Any dividends, Interests and the capital gains will be tax free in an RRSP account and they grow much faster as compared to a non- registered account. In RRSP, investments can be made like Stocks, Bonds, ETFs, Mutual Funds, GICs and Cash. The Investments t hold under RRSP were also discussed, to maximize your tax-free growth.

In this video the things that I liked the most was the way the tax deferrals were discussed and the information was concise.

# data[].attributes.attachment_link.title
RRSP Explained Part 1 | Tax Deductions & Contribution Room | Canadian Tax Guide Chapter 3

# data[].attributes.body
The Basic learning about Mortgage are discussed and how does it works. It was explained by giving an example. Rates, fixed and Variable rated were explained. Fixed as the word says is a fixed rate and is more helpful to be in record.

Where to buy a mortgage. Banks or independent mortgage brokers. Why to choose a broker was explained as they have more options as comped if we go with a bank.

# data[].attributes.body
The thing that I liked in this video was that he said ask questions. They also did mentioned it might be complicated. They did talked about where to go and why to go. The quality and the advice is different so ask questions and is important to gather correct information.

# data[].attributes.attachment_link.title
What You Need to Know About Mortgages - Mortgage Basics - Talking With a Mortgage Agent

# data[].attributes.body
In this website the services and information about RRSP in Canadian society have been discussed. Things like how to set up an RRSP, receiving income, making withdrawals have been discussed. Also, as it is an Canada revenue agency website, I found it credible source.

# data[].attributes.body
What is RRSP and when it was established and many more things were given in this website.

When I did found about the RRSP, I was also having many questions going in my head. The FAQ helped me to find the answers.

# data[].attributes.attachment_link.readable_text
RRSP is an acronym for "registered retirement savings plan." This definition sounds mighty dry when you consider how RRSPs are superheroes of modern retirement planning for Canadian - true tax-obliterating, retirement-enriching wonders of the modern world.

Fasten your seatbelts for our whirlwind primer on the following RRSP related topics, several of which you might want to specifically read about in more detail:

Should these topics whet your appetite and leave you hungry for more on the subject of retirement, you also might want to check a more comprehensive guide to retirement planning.

What's an RRSP and how does it work?

An RRSP is what's called a tax-advantaged account, meaning that the government created them specifically to provide tax breaks to those who invest money in RRSPs as a way to motivate them to put away money for their retirement.

What exactly is the meaning of the term "tax-advantaged"? To you, Canadian taxpayer, tax advantaged means in practice "free government money." Here's how Jeff Nichols, Portfolio Manager puts it.

You can almost think about the RRSP as the CRA saying-you know what, don't pay us the tax this year. Pay it over the next 40 years when you'll probably be paying less tax. We don't get many handouts like this, so we should take full advantage of them!

In this specific case, RRSPs are what's called tax-deferred, meaning any money you contribute will be exempt from CRA taxes the year you make the deposit, and will only be taxed years down the line when you withdraw it. RRSPs are an amazing way to cut down a current-year tax bill.

Benefits of the Registered Retirement Savings Plan

Here's how a tax-deferred account like an RRSP works. Let's say you make $70,000 a year and you decide to put the maximum allowable into your RRSP-$12,600. When tax day comes around, the CRA will treat you as though you earned just $57,400.

Now, tax-deferred doesn't mean tax-free, and you will eventually have to pay taxes when you withdraw your money years down the line, but by the time you do so, you'll be retired, your income will almost certainly be smaller and, thus, your tax rate be lower than it is now.

RRSP Contribution Limit

Because RRSPs are registered accounts, they're subject to certain rules. One of the most important rules concerns the amount of money you can contribute to the account in any given year; it's either 18% of your past year's income or a maximum amount, whichever's smaller.

The amount changes, but you can find this year's and past years contribution limit here. You can also catch up if you didn't max out your investments in earlier years; to find out how much you can contribute, check out the Notice of Assessment that you got after filing your taxes last year.It's important to remember that even though you might have contribution room left over from previous years, you will not accumulate deduction limits. So imagine you've made ​36,000 into your account, but you'll only be able to deduct $18,000 of income from your current year taxes.

RRSP vs GRRSP

Only one letter separates the RRSP from the GRRSP, but that one letter could mean a difference of tens, even hundreds of thousands of dollars in retirement. Group RRSPs are just company-administered RRSPs. And though they have a few disadvantages, like limited investment options and possibly higher fees, they have one extraordinary advantage-employers will often match a portion or even every dollar of your GRRSP contribution.

With this this in mind, you might think of your retirement savings as one of those fabulous champagne towers that you've never actually seen at any wedding you've personally attended. The top cups always get filled first before anything below gets even a drop of champagne. If money is the champagne in this metaphor, you the absolute tip top cup should be your employer's GRRSP. That free-for-the-taking employer matching contribution will make an extraordinary difference in terms of compounding gains over the long term. And because you can have your employer withhold funds to deposit directly into your GRRSP, not only will you not be tempted to spend that portion of your pay, the money deposited will be pre-tax, meaning that a larger amount of money will get invested right away, versus investing yourself and having to wait six months to a full year to get that money back though a tax refund.

RRSP vs TFSA

Since both TFSAs and RRSPs are phenomenal in their respective ways, this a kind of a Batman vs. Superman question, one that begs the question why you should have an RRSP when a TFSA is similar and has no early withdrawal fees.

Here are a few of the biggest factors to consider:

If you haven't contributed much towards your retirement and you happen to have access to a pile of money right now through, say, a bonus, or inheritance, a TFSA might be the best option for you, since RRSPs have what's called an annual deduction limit, meaning that you won't be able to deduct over a certain amount in any given year. The number for 2020 is $27,230 but you can find past, current and future deduction limits on this CRA page.

TFSA are designed to be easily accessed before retirement if the funds are needed-which is good, especially for those with a more immediate goal in mind like buying a house or car. TFSAs are less good if you happen to be the type who's never been able to resist smashing a piggy bank.

If the funds are for your retirement, for tax reasons, TFSAs are generally considered preferable to RRSPs for those earning less than $50,000 a year.

Over contribution to RRSPs

What happens if you contribute too much to your RRSP? The CRA's pretty forgiving on these matters. First, you'll get a nice bit of cushion; any amount up to $2,000 over your annual limit will be forgiven (though it won't be considered tax-deductible). If you go over that, the CRA will likely mail you a notice that you've over contributed and encourage you to vamoose that excess dough. Should you fail to, they'll begin to assess a penalty of 1 percent on that over-contribution, assessed monthly, for each month you're over the limit. The CRA understands that mistakes happen, and should you find yourself in this situation, it may be worthwhile to do a bit of research on the topic of penalties and resolutions and seek forgiveness of this penalty.

RRSP Home Buyers Plan

Though RRSPs are often regarded as an impenetrable lock-box of retirement savings that will explode in your face if you try to access it before retirement, the Home Buyers Plan (HBP) provides one notable exception to that idea. The HBP, a program through the Canada Revenue Agency (CRA), allows eligible first-time homebuyers to withdraw up to $35,000 tax-free from their RRSP to be used towards a down payment on the purchase of the home. So, you can take advantage of the tax deductions that RRSP contributions provide while saving for a down payment on your home. Then, you can withdraw the funds tax-free and use them towards buying a home. But one thing you must remember: because HBP is like you loaning yourself money for a house, there are rules with great tax-implications you'll need to follow. Since they're a heck of a lot more accessible than RRSPs, if you're pretty sure you're going to be buying your first house soon, a TFSA might be the wiser account for your needs.

How to open an RRSP

You obviously have many choices of institutions where you might open an RRSP, but consider trying to find one that requires no minimum investment, charges low fees, and provides unlimited phone support from knowledgeable humans for every client. Opening an RRSP requires very little and can easily be accomplished from the comfort of your own home. Once you've chosen an investment provider, you'll likely be asked to provide your email and a create password that you'll use to access your account. Then you'll fill out a very brief risk survey to determine what sorts of investments will best fit your needs given when you hope to retire and how aggressive you can afford to be with your investments in the meantime. Then, all that's left to do is fund the RRSP, easily accomplished by linking a savings or checking account to your investment account.

Frequently Asked Questions about RRSPs

Who introduced RRSPs? RRSPs have been around since 1957 and were introduced by the federal government. Their aim was to help Canadians save for retirement by providing them a tax-deferred savings plan.

Who's eligible for an RRSP? Opening an RRSP is super easy. The only conditions for eligibility are that you're under 71 years of age, are a Canadian resident for tax purposes, and file income taxes in Canada. Minors under the age of 18 can set up an RRSP with written parental consent (or that of a legal guardian).

How much will having a RRSP reduce my taxes? Since you can contribute up to 18% of your past year's income, you could avoid paying tax on that portion of your income if you contribute the full amount every year. Also keep in mind that when you begin withdrawing from the RRSP during retirement, you'll pay less money on that income because you'll likely be in a lower tax bracket.

How much will my RRSP be worth/grow? The value of your RRSP depends on how much you've contributed each year, what assets your RRSP is invested in, and how many years you've had the account for. However, average rates of return for retirement accounts tend to hover between 4% to 8%.

What happens to your RRSP when you retire or die? When you retire, your RRSP turns into a Registered Retirement Income Fund (RRIF) that you can withdraw money from (income tax would apply to any withdrawals). If you die, however, your RRSP is usually rolled over to a beneficiary on a tax-deferred basis. The beneficiary would be designated by you, but if no beneficiary has been named then the proceeds fo your RRSP are considered part of your estate and will be distributed accordingly.

Can an RRSP be transferred to another person (partner/child)? An RRSP can't be transferred to another person while the account holder is still alive, but you can open a joint RRSP with a spouse. As a rule, you can't transfer money from your RRSP to someone else's RRSP while you're still alive.

Does contributing to an RRSP affect OAS? Contributing to an RRSP doesn't affect Old Age Security (OAS). Where you need to watch out is when you start withdrawing from your RRSP. Once your net taxable income during retirement reaches a certain level, your OAS be subject to a recovery tax, also known as the "clawback."

How do you find your RRSP issuer or manager? Many financial institutions (including this one) offer RRSP accounts. You simply sign up with the investment provider of your choice and then regularly deposit contributions to your RRSP via the institution managing your RRSP.

What is RRSP matching? RRSP matching usually takes place in Group RRSPs, which are RRSPs managed by your employer. Through them, your employer may choose to match your contributions to the RRSP, which means you'll be doubling your savings and racking up tax savings.

Can an RRSP be withdrawn at any time? You can withdraw from your RRSP before you turn 71, but those withdrawals will count as income-meaning you'll be taxed on the amount at a higher tax rate than you probably would if you withdrew it during retirement. You will also be charged a withholding tax, and you'll permanently lose the contribution room you used to originally make your deposit.

Can RRSP contributions be carried forward? Your RRSP contributions can be carried forward. Any unused contribution room can indefinitely be carried forward to future years.

Can an RRSP be transferred to a TFSA? You can transfer funds from an RRSP to a TFSA, but it's a two-step approach. First, you'll need to withdraw the funds from your RRSP, which means you'll be subject to a withholding tax and income tax on the amount withdrawn. You can then deposit those funds in a TFSA but you need to make sure you have enough available contribution room.

Can an RRSP be used to buy a house or for your education? You can use your RRSP to buy a house if you're a first-time homebuyer through the Home Buyer's Plan, and you can use your RRSP to pay for your education through the Lifelong Learner's Plan. RRSPs can also be used as collateral for a loan, but it's not considered advisable since it could lead to a higher tax bill.

Can an RRSP offset capital gains? An RRSP can offset capital gains from other sources if you have enough contribution room available. You don't have to worry about capital gains in an RRSP itself because those investments are tax-sheltered.

Can an RRSP be garnished? Whether or not your RRSP can be garnished-ie. claimed by creditors-depends on what province your account is held in and under what circumstances it's been opened. However, RRSP proceeds are usually protected under the The Bankruptcy and Insolvency Act, excluding any contributions made within the last 12 months.

Ready to take five minutes to open the finest RRSP ever devised? Sign up to Wealthsimple, the only automated investing services to offer all of its client's unlimited human support. Every Wealthsimple client gets state of the art technology, low fees and the kind of personalized, friendly service you might have not thought imaginable from a low-priced investment service.

Last Updated August 17, 2020

# data[].attributes.attachment_link.description
RRSP is an acronym for "registered retirement savings plan." This definition sounds mighty dry when you consider how RRSPs are superheroes of modern retirement planning for Canadian - true tax-obliterating, retirement-enriching wonders of the modern world.

# data[].attributes.body
In the website, the services and information was given as to what is mortgage and how much you need for a down payment. Basically, the steps to get a mortgage. A credible source to look into if looking for a mortgage and/or get some information about getting a house and how everything works.

# data[].attributes.attachment_link.description
Choosing a mortgage, renewing your mortgage, paying off your mortgage faster and more.

# data[].attributes.body
The different types of mortgage were discussed in the website and how do mortgage works.

# data[].attributes.attachment_link.readable_text
30 May, 2018 / by

Before you execute your plans to buy a new home, you must take the time to ask and learn the answer to this question: How do mortgages work?

Not all aspiring homeowners in Canada have the extra money to pay up front the full purchase price of their dream home. And so, to be able to afford the cost of buying a new property, they take out loans, or more particularly, mortgages.

This entails borrowing money from banks and other financial institutions and slowly paying off the amount loaned with interest. This sounds simple enough, but there are many considerations to think about before a potential homebuyer should apply for a mortgage.

There different types of mortgages and each has key features which may or may not suit you. Moreover, although mortgages are common across the globe, the rules which govern them have key differences in every country.

To help you navigate this aspect of the real estate world, here is a guide to understanding how mortgages work in Canada.

1. You need to prepare your down payment

In Canada, you won't be able to purchase a house unless you have enough money saved up to cover your down payment, which must be paid up front. The down payment is a percentage of the total purchase price of the property.

Generally, homebuyers are required to pay 20% of the purchase price as down payment. However, it is also possible for you to secure a mortgage even if you only have enough money to pay less than 20% of the property's price (e.g., 5% or 10%).

In cases like these, having mortgage loan insurance is a must. This protects the lender in the event that you default on your payments since it is the insurer who will then be accountable to pay for what you owe.

2. You need to get pre-approved before applying for an actual mortgage

Getting pre-approved is a very important step of the homebuying process because it gives you a clearer picture of your preparedness to take on the responsibilities of homeownership and helps you set a more realistic budget that you can afford for the long term.

Once you're pre-approved, you may also lock in a specific interest rate for a limited period of time while you're still house-hunting.

When you approach a lender to seek pre-approval, the bank or lending institution will require you to submit:

Proof of identity (IDs) issued by the government

Proof of address

Employer's contact information and employment history

Proof of income

List of debts and assets

Lenders will pay particular attention to your credit history as it sheds light on how financially responsible you are (i.e., whether you pay bills and debts on time).

3. You must determine what type of mortgage (open or closed) suits you best

Do you plan on making extra payments to completely pay off your mortgage as soon as possible? Then, you should try to get an open mortgage since it's more flexible in letting you make prepayments. However, the interest rate for this type of mortgage is usually higher.

A closed mortgage, on the other hand, offers a lower interest rate but limits how much extra money you can add to pay your mortgage faster. This type of mortgage usually charges penalty fees if you try to make prepayments which are more than the limit set by your lender and if you choose to break the mortgage agreement.

4. How long will it take for you to completely pay off your mortgage?

The time it takes for you to pay the principal amount of the loan (plus interest) is called the amortization period. It is usually between 10 and 25 years, and your monthly payment will vary depending on the amortization period you chose.

A longer amortization period may mean smaller monthly payments, but it also means you'll be paying more in interest. Within the first five years, you will barely shave off the principal amount you owe your lender, as most of what your payments covered was the interest of the loan.

5. You will need to renew your mortgage once the mortgage contract expires

The Financial Consumer Agency of Canada defines mortgage term as "the length of time your mortgage contract will be in effect." The duration ranges from several months to five years, sometimes even longer.

This means the terms and conditions of your mortgage agreement with the lender, including the established interest rates, will only remain valid before the end of the mortgage term. After that, you must renew or renegotiate your mortgage under new terms.

You should opt for a short-term mortgage if you intend to secure a lower interest rate for your mortgage in the next few years, or if you have plans to move into a different home eventually. However, interest rate fluctuations may not be favorable to you when the mortgage term ends, which means you might end up with a mortgage that has a higher interest rate.

In a long-term mortgage, you get to lock in the current interest rate so that you won't be affected by the fluctuations in market rates. However, should you decide to change any part of your mortgage agreement, you may be liable to pay prepayment penalties.

There are also mortgages with a convertible term. It may initially be a short-term mortgage, but you have the option to convert it to a long-term one later on. However, once you request the conversion, the interest rate will adjust according to the lender's rates for long-term mortgages.

6. You must choose between a fixed interest rate mortgage or a variable interest rate mortgage

Lenders like banks don't give you money to buy a house unless they are guaranteed financial gains in doing so. Therefore, in exchange for lending you the money you needed, you must also pay for their services in the form of interest.

These lenders usually give borrowers the option to choose either a mortgage with a fixed interest rate or one with a variable rate.

Fixed interest rates, in general, are higher than variable interest rates, but they are guaranteed to stay the same throughout the mortgage term.

A mortgage with a variable interest rate means the interest you owe your lender will vary depending on the rise and fall of market rates. You may be paying a low interest rate now, but that can change in the future. Given the unpredictability of the market, variable mortgages offer lower interest rates than fixed mortgages.

Some lenders, however, offer hybrid or combination mortgages. In these types of mortgages, a part of your mortgage is protected from market rate fluctuations (like in fixed rate mortgages). The rest won't be. Hence, if interest rates drop, you still stand to gain some benefit though not as much as a variable rate mortgages usually do.

7. How frequent will you make your mortgage payments?

In Canada, you may choose how often you pay your mortgage, and so, you must make sure that your chosen payment schedule suits you and your lifestyle best. You may decide to pay on a monthly, semi-monthly (twice a month), biweekly, or weekly basis.

As you can see, mortgages in Canada can get complicated. This is why it is best that you consult with a trusted mortgage professional who can guide you in securing a loan so that you can buy a new home.

8. Conventional vs. high ratio mortgages?

Mortgages that require at least a 20% down payment are referred to as conventional mortgages in the industry while anything less than a 20% down payment would be known as a high ratio mortgage. Uninsured mortgages require the borrower to undergo a stress test where borrowers have to qualify at the contractual mortgage rate + 2%.

The qualification criteria becomes less imposing with the more money you put down. With a higher down payment comes higher leverage against the banks qualification criteria imposed to hedge their risk in case of mortgage default. The more security you have to offer (collateral), the less stringent the qualification criteria becomes.

Another alternative option that comes with far less hoops to jump through and less bureaucracy involves borrowing from private or alternative lenders. They are more flexible to accommodate many borrowers' situations that wouldn't typically fit the rigid system of major banks.

9. Understanding the different lender tier options?

With the newly imposed mortgage regulations taking a toll on Canadian mortgage borrowers, many have started looking towards alternative lenders. Following regulatory changes, mortgage brokers claim as much as a 20% uptick in rejection rates. This has created an opportunity for mortgage investment corporations, private lending options and credit unions to fill the gap that the primary lenders have left wide open.

It is unfortunate that some would be qualified borrowers prior to the regulatory measures have been shunned by the institutional banks. However, the stress test with alternative lenders is more lax and does not come with all the newly imposed stringent qualification procedures looking to cool the housing market.

Institutional lenders including the likes of CIBC, RBC, BMO, TD and Scotiabank are oftentimes referred to as "A lenders." These are lenders that offer the lowest interest rates but with the most strings and qualification criteria attached including the newly imposed mortgage stress test.

Lending institutions that fall directly below these A lenders are known as "B lenders." The barrier of entry for acquiring a mortgage through this channel is slightly lower. Meaning, the qualification procedure is not as stringent. If you have a lacking credit history for example, this is where a B lender would have some flexibility to accommodate your case.

Alternative or private lenders are increasingly popular mainly due to their flexibility. There is of course oversight and regulation of these lenders but they are not on such a tight leash compared to A lenders. If you happen to be self-employed for instance, this would be a great option for you to start shopping.

# data[].attributes.attachment_link.title
How do mortgages work in Canada? - Canadian Mortgages Inc.

# data[].attributes.attachment_link.description
Before you execute your plans to buy a new home, you must take the time to ask and learn the answer to this question: How do mortgages work? Not all aspiring homeowners in Canada have the extra money to pay up front the full purchase price of their dream home.

# data[].attributes.body
The picture, saving for retirement says all what RRSP means but what it actually means not a saving but an investment for retirement.

# data[].attributes.attachment_link.readable_text
The following are relatively common mistakes that Canadians make annually when contributing to their Registered Retirement Savings Plans.
1. Reporting RRSP contributions based on a calendar year.
While your taxes are based on a calendar year, the reporting of your RRSP contributions extends 60 days into the New Year. Imagine, for RRSP purposes, that you have your own fiscal year that begins in early March or 60 days after January 1. RRSP receipts for the first 60 days of 2020 should be reported on your 2019 income tax return.
2. Leaving excess contributions on the table
It is easy to inadvertently contribute more to your RRSP limit by maximizing the contributions early in the calendar year. On the bottom of your Notice of Assessment in the previous tax year (2018) you will see the amount of unused RRSP contributions. Immediately below that line you will see the maximum amount you can deduct for 2019.
3. Avoiding equities during times of uncertainty
Despite stock markets not having a major downturn in the last 10 years or so Canadians may be still be reluctant to invest in the equity investments. Even locking-in with the present low interest rates with a GIC (Guaranteed Investment Certificate) for your next RRSP contribution, the risk factors for your savings are still potentially exposed.
4. Not knowing what to hold inside and outside an RRSP.
Keeping the above point in mind, there can be a different problem when equity funds are inside your RRSP and you are also holding fixed income securities outside the RRSP. Fixed income securities produce fully-taxable interest income unless they are held in an RRSP.

Capital gains and dividends from equity investments are expected. Each is more favourable than the taxation rate on interest income.

Your RRSP is your self-made pension and managing it correctly by maintaining a balanced mix of assets in your portfolio can produce greater benefits.

View the RRSP as only one component of your overall pension. Tax free savings accounts, RPP (Registered Pension Plan with your employer) and Government Pensions are all important factors to consider.
5. Waiting for the 'perfect time' to start a RRSP plan.
If procrastination was a successful investment strategy, nearly everyone would retire wealthy. Too many people put off investing for any number of reasons.

Consider two people who both make an investment of $45,000 (over several years) into their RRSP with an average annual return of 6 percent. The first investor deposits $1,500 per year into an RRSP starting at age 25 and continues until age 55. The second investor, realizing s/he is running out of time, doubles his/her savings to $3,000 per year beginning at age 40 through 55. When both investors reach age 55, the first person will have accumulated over $118,000 while the second person's RRSP balance will be less than $70,000.

With retirement planning becoming more complex, investors cannot afford to leave money on the table. Contact your financial advisor to find out how to maximize your RRSP investment opportunities.

Questions about RRSP investing?

Contact our office!

# data[].attributes.attachment_link.description
The following are relatively common mistakes that Canadians make annually when contributing to their Registered Retirement Savings Plans. 1. Reporting RRSP contributions based on a calendar year. While your taxes are based on a calendar year, the reporting of your RRSP contributions extends 60 days into the New Year.

# data[].attributes.body
In this picture, steps have been discussed clearly how to get a mortgage. Starting from estimate home budget to close on mortgage

# data[].attributes.attachment_link.readable_text
Our goal is to give you the tools and confidence you need to improve your finances. Although we receive compensation from our partner lenders, whom we will always identify, all opinions are our own. Credible Operations, Inc. NMLS # 1681276, is referred to here as "Credible."

Whether you're a first-time homebuyer or you're looking to move into your second home, buying a home is a big financial decision.

It can also be somewhat complex, so to make it easier to navigate, you'll want to know what to expect. Following this guide will help you learn how to get a mortgage.
How to get a home loan - step by step:

1. Estimate your home budget

2. Review your credit report

3. Get pre-approved

4. Shop around for mortgage rates

5. Negotiate the home purchase details

6. Complete the full mortgage application

7. Get approved by an underwriter

8. Prepare for closing

9. Close on your mortgage

1. Estimate your home budget

Once you know your credit is on-par for a mortgage, it's time to figure out how much house you can afford. To do this, you'll need to estimate your full purchase price, down payment, and monthly costs.

The monthly costs of owning a home are very different from renting. You'll have to pay your mortgage principal and interest, property taxes, homeowner's insurance, and any maintenance and any homeowners association fees. Many well-intentioned first-time buyers are surprised by the cost of taxes, insurance, and repairs. A good estimate helps you avoid overspending.

See what your estimated monthly payment will be using our mortgage calculator below.

Enter your loan information

With a $ home loan, you will pay$ monthly and a total of$ in interest over the life of your loan. You will pay a total of$ over the life of the mortgage.

To avoid the added cost of private mortgage insurance (PMI), you'll want to put down at least a 20% down payment. Check out this handy calculator from Freddie Mac.

Good to know: Some lenders and loan programs are designed to help people buy a home with less than 20% down. While this is a common method to buy a home, a lower down payment leads to a higher monthly mortgage payment and the added cost of private mortgage insurance.

2. Review your credit report

The first step in getting a mortgage is checking your credit. Your credit is a major factor in getting approved for a mortgage, so you should start by making sure your credit is on-track for mortgage approval.

A credit score in the mid-700s or higher can get you the best interest rates, according to the CFPB. If you have a score below 620, however, you might struggle to get approved. If you want to improve your credit before moving forward, learn more about how to build or repair your credit to improve your approval odds or help you get a better rate.

3. Get pre-approved

Once you've narrowed down your list of preferred lenders, it's time to get pre-approved. This is a less-thorough approval process than you'll deal with later, but it gives you the green light to make a solid offer on a home. If pre-approved, you should get a pre-approval letter from the lender telling the seller that you're good for a purchase up to a certain limit.

Note that pre-approval is not the same as prequalified. Prequalified is better for buyers who have not yet started looking at properties. If you're serious about buying, you should get a full pre-approval.

Tip: Getting multiple pre-approvals can take a lot of time. But Credible simplifies the process, allowing you to sign back into your dashboard and generate a new Instant Streamlined Pre-approval Letter anytime you need one to present to your real estate agent in seconds.

4. Shop around for mortgage rates

Because mortgages are typically so big, a difference in rates can lead to a difference of tens of thousands of dollars over the life of your loan. That's why it's important to shop around for the best mortgage rate for your situation. When comparing lenders, focus on finding the lowest interest rate and lowest closing fees.

Credible makes comparing multiple lenders quick and easy. You can see your rates from our partner lenders in the table below in three minutes.

5. Negotiate the home purchase details

Now it's time to get into the nitty-gritty of the home loan process. You'll work with your trusted real estate agent to make an offer and negotiate the best price.

Next, you'll lock in the final price and any concessions from the seller, for example helping with closing costs or making repairs before the sale. This is one of the most important steps in controlling your costs when purchasing a home.

6. Complete the full mortgage application

Once your offer has been accepted, it's time for the full mortgage application. This is a very detailed form that asks about your income, savings, monthly expenses, and other questions to ensure you're able to afford the mortgage if approved.

Make sure to be thorough and detailed. Skipping a section or making a mistake could lead to a declined application which could lengthen the homebuying process.
Read On: Mortgage Qualifications: How to Qualify for a Mortgage
7. Get approved by an underwriter

Your mortgage agent will hand off your application to the underwriting team - a group of number crunchers who make the final approval decision for your loan. It's possible you'll see requests for financial statements, pay stubs, tax returns, and other supporting information. Try to hand this information over as quickly as possible to expedite your loan approval and closing.

Here are some steps that take place during the underwriting process:

Inspection: An inspector comes to the house at your expense to make sure everything is in good working order. You might be able to back out of the purchase based on a bad inspection or might want to request additional repairs.

Appraisal: The lender will send an appraiser, at your expense, to take pictures and compare to other nearby home sales to make sure they are not lending more than the property is worth.

Credit review: The underwriter will take a deep-dive look at your credit report and monthly payment obligations to ensure you're a good risk and can afford the loan.

Employment and income review: A lender wants to know you are employed and confirm the income you receive monthly. Your recent employment history and recent pay stubs can help satisfy this requirement.

If you're self-employed, you might have to give copies of your business financial reports as well. Don't be surprised if you get multiple requests as the underwriter combs through your application details.
Find Out: How Does the Mortgage Underwriting Process Work?
8. Prepare for closing

You've made it to the home stretch! You should get the news that your loan is approved or conditionally approved waiting on some additional forms or criteria. If you're conditionally approved, hurry up and meet those conditions. Here are some steps to take before closing:

Put it on the calendar: Get your closing scheduled and clear your calendar. Closing can take an hour or so as you sign your name 100+ times.

Arrange payment: Your down payment and other fees will have to be covered by bank wire or cashier's check. Work with the title company if you have any questions.

Buy insurance: Lenders require homes to be covered by a minimum level of homeowner's insurance. Shop around and have a policy ready to go on closing day.

Review closing disclosure: The lender will give you a closing disclosure and closing documents ahead of signing. Take the time to review everything for errors and make sure you know what you're signing.

Tip: Taking the time to prepare for closing helps you avoid any surprises and makes sure the closing goes through without any problems.

9. Close on your mortgage

It's the big moment. Show up to your closing and sign your paperwork. The only people that have to be present for closing are you (plus a cosigner if applicable) and a notary. However, someone from the title company, lending company, and your agent might be there as well.

Plan on showing your ID, if not two, and signing and initialing multiple forms. Closing documents with a mortgage can easily be over 100 pages. You won't have to sign every single one, but you'll feel like a celebrity with a tired hand after signing so many autographs.

When you sign on the last line, the home is yours! If all went well, you might even get the keys at closing.

Congrats on being a homeowner!

Credible makes getting a mortgage easy

Actual personalized rates: In 3 minutes, get actual prequalified rates without impacting your credit score

Smart Technology: We streamline the questions you need to answer and automate the document upload process

End-to-end experience: Complete the entire process from rate comparison to closing all on Credible

Find Rates Now

# data[].attributes.attachment_link.title
How to Get a Mortgage (Home Loan) | Credible

# data[].attributes.attachment_link.description
Our goal is to give you the tools and confidence you need to improve your finances. Although we receive compensation from our partner lenders, whom we will always identify, all opinions are our own. Credible Operations, Inc. NMLS # 1681276, is referred to here as "Credible."

# data[].attributes.body
I have a very little knowledge about investments and there were many things that I learned after searching for the content. I was surprised  to know that RRSP was an retirement savings plan, I didn't knew that before.

This topic, Investments is not only interested for me but for anyone who is looking for saving for their retirements. As everyone wants to spend they life not worrying about the retirements but free from all this. So, I think investments are good not only for saving money for retirements but also passing on to generations.

The knowledge that I would pass on to my known will be that why they should invest. Importance of investments and how it helps to save for an emergency and/or retirement.