The mortgage process

The mortgage process – It’s elementary, my dear Watson!

Let’s start at the very beginning

Before mortgage shopping, budget, budget, budget. Going out peeping potential homes before you’ve established a clear budget (and established it again with your partner) is the stuff dream crushing is made of. Loan approval guidelines are based on a perceived ability to repay the debt. Set yourself up for success by figuring out what you’re willing to work with before you start the approval process!

Apply, but not liberally

A quick note, applying willy-nilly all over the place may negatively impact your credit score! That said, filling out an application through a trusted mortgage broker is the first step on the road to homeownership.

Once you apply, we’ll review your file and the mortgage process will officially begin!

Live your truth through mortgage products

You’ve determined that you want a mortgage, now it’s time to choose a type. Don’t get overwhelmed. There are only two! That said, regardless of what the numbers say, choosing a mortgage product really does come down to a gut feeling.

If you’re the type of person who requires stability to maintain well-being, you need to stick with a fixed rate product. You do you; live your mortgage truth.

Fixed-rate mortgages: As the name implies, fixed-rate mortgages keep interest rates and monthly payments the same for the duration of the mortgage term.

Variable-rate mortgages: The interest rate varies (as can monthly payments) in accordance with the Bank of Canada’s precedent-setting lending rates.

Paperwork, paperwork, paperwork

As with all the most important transactions in life, purchasing a home requires a great deal of documentation. Common items include proof of employment, notice of assessments, recent pay stubs, and current T-4s.

Hit submit

Before hitting submit, your mortgage broker will show you a beautifully stocked charcuterie board’s worth of financing choices, leading with the creme of the crop.

With your ok, they’ll then submit your application for the pre-approval process. This holds the rates you were approved at, based on the information provided, for approximately 120 days so you can house hunt worry-free.

If you already know the property you want, your application would be submitted for approval.

Approval!

Assuming everything checks out, a response from the lender you’ve applied to can be received on the same business day as submitted. Once your broker gets the mortgage commitment or approval, it’s sent to you for review.

Reviewing the commitment

Your mortgage broker will go over the proposed commitment with you to answer any questions you may have. This is a great opportunity to revisit the details of your mortgage and ensure it is, in fact, the right product for you and your family.

Did we mention paperwork?

If there is any additional paperwork that needs to be done, documents that the lender requests should be sent to your broker no later than 10 days following the mortgage approval.

Marching orders

You’ll get mortgage instructions to your lawyer through your mortgage broker!

Lawyer up

Once the loan is approved you’ll be ready to sign the final loan documents, for which you’ll be requiring a lawyer. Everything must be reviewed to ensure the rates and terms are what you were promised. Signing takes place, normally, in front of a notary public or lawyer.

There are loads of fees associated with obtaining a mortgage and transferring property, unfortunately, which you’ll need to pay at closing – including your lawyer!