Before you get too consumed with house hunting, it’s a good idea to find a mortgage specialist who can help you get an idea of what home you can afford. It is equally important for you to understand the process. The more you understand, the less likely there will be unexpected surprises! No one likes these… not you, not the broker, not the lawyer, not the realtor …NO ONE!
The mortgage approval process can seem like a daunting task, but it’s not as time-consuming as you might think. Getting a mortgage in Canada can be broken down into six easy steps.
Knowing the process of getting a mortgage can help you to be prepared and feel confident in your decisions. Read on to learn about the process of getting a mortgage in Canada.
Step One: Contact a Mortgage Specialist
Hiring a mortgage specialist is the first step to getting a mortgage in Canada. A mortgage specialist is here to help you find a mortgage that fits your needs and at a budget that you can afford. Mortgage specialists also have access to various professionals that can help you move swiftly through the mortgage process.
Step Two: Application Request
You will be required to provide general information in the application. This can be done in a few ways; an online application, a phone conversation or even a face-to-face meeting in some cases.
This may seem like the hardest step in the process because it also requires you to compile and go through the documents required to be approved for a mortgage. But it always boils down to three areas:
- Income – job letter, pay stub, and/or last two years T4’s, T1 Generals and Notice of Assessments
- Down payment – Savings, registered (RRSP) and non- registered investments, gift from family, and possibly borrowed funds
- Credit – your report will be accessed directly by the mortgage specialist, so the only requirement from you will be if you have any private debts, loans or obligations such as separation/divorce agreement, child support, spousal support, etc that would not show up on the credit report.
The mortgage specialist will review your records and reports to confirm they will be able to help you get a mortgage.
Note that it is common for some back and forth communication between the applicant(s) and the mortgage specialist to clarify details, goals, and expectations.
Step Three: Pre-approval
After you’ve sent these documents over, the pre-approval process will begin. Your mortgage specialist will open your file and start your loan process.
This process will result in a few different types of results; details of the estimated numbers of the maximum mortgage you may qualify for, potentially a pre-approval certificate (if required) or at minimum, a detailed plan of what you need to do in order to qualify for the maximum mortgage your scenario would allow.
Now you understand the benefit of this process, even if you cannot qualify for the home purchase today, you will have action steps to take to achieve your dream, so the work and effort are not for nothing.
The length of time for this pre-approval depends on you and how quickly you get the essential information sent to your specialist. Getting a pre-approval is critical, as it lets you know the mortgage you qualify for ahead of time so that you can house hunt with confidence. Once you’ve been pre-approved, the fun begins. Keep in mind a pre-approval only lasts for 60 to 120 days.
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Step Four: Finding your home
With the information provided, you and the realtor can now start planning and start your search for your new home.
Once the property is found and an offer is accepted conditionally, this information is required by the mortgage specialist, so they can go to market to find the most suitable mortgage for you.
During these “days of conditions” lots of work is being done by the specialist, the lender, the insurer and possibly even an appraiser.
This is the time that your mortgage is secured and in place. You will be reviewing and signing to accept the mortgage, so you can confirm your offer. This includes your mortgage rate, the terms of your mortgage and the amortization period. Once the lender receives your signed mortgage documents, your lawyer and the lender will work together to finalize the pre-closing documents.
Step Five: Finalizing
After completing the documents, you will meet with your lawyer to sign the remaining paperwork. You will also provide the down payment, closing costs, and confirm fire insurance. During this final stage, it’s essential not to make any big purchases or change employment because your lender can still back out.
Step Six: Closing
On the closing day, your lawyer will distribute the money to all parties involved and transfer your name to the title. Your realtor will give you the keys, and then your loan will be closed.
Our Mortgage Experts Are Here to Help You Purchase Your Dream Home
Now that you know the process of getting a mortgage in Canada, you can begin getting mortgage approval with ease. If you are interested in purchasing a home, our mortgage experts can help you. As a mortgage broker, Mortgage Station has access to multiple mortgage options. It can help you determine the right one for your family. Contact us today at email@example.com or give us a call at 705-290-4490 to speak to one of our agents.