How Do I Apply For a Mortgge

The Mortgage Financing Process The number one question a homebuyer often has is: “What does the mortgage process entail?”

In very simple terms, the following is an outline of the process upon which you are about to embark:

Get prepared:

Gather the following information to have at hand when you meet with your lender or mortgage broker. This will help them determine whether you qualify for a mortgage:

  • Contact information for your employer and your employment history
  • Proof of address and your address history.
  • Government-issued photo ID with your current address.
  • Proof of income for your mortgage application.
  • Proof of down payment = 1% of Purchase Price.(amount and source)
  • Proof of savings and investments
  • Details of current debts and other financial obligations.
  • Know your credit score.

Your credit score is a snapshot of your financial health and it shows how consistently you pay off your bills and debts. A good credit score is incredibly valuable.

Get pre-approved:

  • Avoid any hiccups or obstacles before you begin the home shopping process. Being pre-approved helps in the following ways:
  • Determines price range – It’ll help you understand what your monthly costs will be and determine your price range.
  • Guarantees the rate – from 90-120 days.
  • Allows you to put in a competitive offer – become a successful bidder with a short subject to financing requirement.
  • A pre-approval does not mean that a lender has fully reviewed your documentation and you may still need the approval of a mortgage insurer. This is why using the knowledge and expertise of a mortgage professional is so important.

Put in an offer once you have found the property that meets your needs. You’ll put in an offer that will be accepted or countered. This may go back and forth until you reach an acceptable price with the Seller.

Offer is accepted:

  • Send your Mortgage Lender/Broker a copy of the Contract of Purchase and Sale and the MLS listing
  • An appraisal is ordered. (if necessary)
  • Send in any remaining documents required for financing. (income confirmation, down payment confirmation, etc)
  • Send an inspector in (if applicable) – Your Mortgage Lender/Broker can help you arrange this.
  • Receive the lender’s approval on the property and the final approval letter to remove subjects.
  • At this point, your financing is in place and you’re ready to proceed with the purchase of the property.

Lawyer’s Office:

You’ll be asked to provide any money that’s to be used towards your “Closing Costs” such as, the Balance of your Down Payment that may still be owing on top of the amount that is already held “In Trust” with the Realtor’s Brokerage, YOUR portion of Property Taxes, Property Transfer Tax, Property Purchase Tax, GST(if applicable), Legal fees etc…

Typically, you’ll go in 1-2 days prior to the “Completion/Closing Date.”

Tips for Planning and Managing Your Mortgage When Financing a Home:

Make sure you’re prepared to deal with any challenges that come up. These can include a loss of income, increased expenses or rising interest rates.

Absolutely “DO NOT, under ANY circumstances, Decide to Purchase a New/Used Vehicle or Purchase New Furniture etc., against your Credit Card/s and/or Personal Line/s of Credit PRIOR to the “Completion Date”, of your new home. Doing this may, CANCEL your Pre-approved Mortgage and you may NOT qualify anymore for your Financing!