Global News: Homebuyers 101: Mortgage Approval
Alyse is planning on buying her first home. She stops in to visit Clinton Wilkins Mortgage Team to talk about what happens after you find a home and are looking for mortgage approval.
Don’t feel like watching the video? Check out the credit advice video transcript below. Global News: Homebuyers 101: Mortgage Approval
Alyse: [00:00:00] Well, for the past three weeks, we’ve been sharing tips on home buying for anyone buying or looking to buy their first home. I know I’m going to hopefully be doing that soon. So far, we’ve touched on mortgage pre-approval and house hunting. And this morning, we are welcoming back to the show, Clinton Wilkins. Senior mortgage adviser with Centum Home Lenders to discuss next steps after deciding on a home to purchase. Because Clinton, as you know and welcome back to the show.
Clinton: [00:00:25] Thanks for having me.
Alyse: [00:00:25] Last week I went out with James Dwyer. We looked at a couple homes. I have not settled on one yet, but it was really interesting to get his perspective. But now I’m in a place where I’m kind of thinking about what do I do after I do decide to buy a home. I’ve got to go back to you now.
Clinton: [00:00:41] That’s right.
Alyse: [00:00:41] And talk about the mortgage process.
What happens next?
Clinton: [00:00:44] So you’ve been in to get your pre-approval and you’ve looked at a couple of homes and you’ve made some offers. And let’s just say you have an accepted offer. At that point, you would connect me with your realtor, your licensed real estate professional. And we would touch base and talk about what type of rate product you want, confirmed down payment, confirm amortization. And then we would submit the file for a firm approval. At that point, the bank could offer you a commitment in terms of financing based on a certain number of conditions. And once we have that approval, we would then reach out and let you know what we need for you from you in terms of documentation. And we would either book a meeting for you or prepare the documents to maybe send them out electronically for signing, which is obviously becoming much more popular right now.
Alyse: [00:01:26] And let’s veer away from this for just a second. I do want to touch on Coronavirus. I’m glad you brought that up, because you’re right. Electronic. The ways that we can use the Internet to help us out, we need to use those those methods these days for sure. How has this COVID-19 pandemic affected you as a mortgage broker?
Talking about COVID-19
Clinton: [00:01:41] Well, homeownership is one of the biggest purchases of people’s lives and mortgage debt is one of the biggest debts. So there’s a lot of uncertainty in the market. Really due to people’s employment. We don’t know what’s going to happen. You know, normally for people who are on in a salaried type job, their salary is going to continue. But that’s not everyone’s situation. A lot of people are hourly, which they might be laid off or maybe they’re self-employed and are really dependent on the market still moving in terms of bringing money and to be able to pay their bills like their mortgage.
So the Canadian Mortgage and Housing Corporation actually put out a press release yesterday. We posted it on our Facebook groups. You can certainly check that out. And, you know, they’re going to help homeowners in terms of working with their lenders for capitalizing mortgage payments, maybe deferring mortgage payments. They’re working on a bunch of programs that are really going to help homeowners, you know, weather that storm. We don’t know what’s going to happen in the coming days. But I can tell you, you know, there is a huge advantage with unbiased mortgage professionals because we’re able to work from home if need be, where we don’t know what’s going to happen with bank branches.
The branches could close or maybe there could be staffing issues for us. We’re able to work remotely, but we’re also able to offer, you know, appointments over telephone or maybe over Skype or GoToMeeting. And we’re also able to get some of the documents signed remotely via e-signatures or accept documents over fax or by scans in terms of PDF. And that really differs us from the bank branches. Normally, those documents need to be signed in branch without any exceptions.
Mortgage Brokers are flexible
Alyse: [00:03:07] All right.
Clinton: [00:03:08] And it’s not that, you know, our lenders are under a different, you know, set of rules than the big five because guess what? We use the big 5 every day. It’s just a different process. And where we’re working remotely a lot of the time, any way we’re able to really keep things rolling. People are still going to buy homes.
Alyse: [00:03:26] Right.
Clinton: [00:03:26] People’s mortgages are still going to come up for renewal. They’re still going to need to refinance. And, you know, we’re going to be here for homeowners and we’re going to ensure that the process is going to be as smooth as possible going forward.
Alyse: [00:03:36] So what you’re saying is don’t cancel my house.
Clinton: [00:03:37] No.
How does a mortgage broker get paid?
Alyse: [00:03:37] OK. So let’s go back to. Of course, mortgage approval we talked about. You know, I’ve got the document signed. Everything’s ready to go. How do you get paid?
Clinton: [00:03:45] So we get paid by the lender.
Alyse: [00:03:47] OK.
Clinton: [00:03:47] Majority of the time when you’re buying a home, the lenders are going to pay us. Mortgage brokers are one of the only things in life that’s free. The only time that we would potentially get paid by the borrowers if it was like commercial lending or an extraordinary situation where we’re talking about a private loan or, you know, alternative lending. At that point we may get paid by the borrower. But ninety nine percent of the time, we’re paid by the lender. And, you know, every consumer should be reaching out to a mortgage professional. We have access to a variety of different lenders and we have access to almost 40 different lenders. So, we’re really able to work through every everybody scenario individually in terms of their income, their assets and their credit and figure out what the best solution is.
Alyse: [00:04:26] Lots of options there for sure. How long after my loan is approved, will I actually see the money come into my account.
Who handles the money?
Clinton: [00:04:32] Ok. This is a great question. I get asked this question all the time. So the way that it works is when you make an offer on a home, you set two dates, really set a closing date. That’s your possession date. When you get the actual keys and you set a financing deadline or condition date. Financing is typically only one of the conditions that you have to fulfill. Typically, you have to fulfill a condition of insurance, inspection, and there could be other clauses that you’re required to do prior to that condition date being firm or when you are in a firm and binding agreement.
The mortgage actually closes on the closing date, the date that you get your key. So no money changes hands until that date. And our mortgage lenders actually will send the money to your lawyer and all the funds are transferred with your lawyer. So you would bring in your downpayment and your closing costs, funds to the lawyer and we would send the mortgage funds to the lawyer and the lawyer would put it all together and then send a check over to your seller.
Alyse: [00:05:31] Ok so it’s through the lawyer. By the way, speaking of lawyers, we’re gonna do our final segment on first time homebuyers next week. We’re going to talk with a lawyer, because that is a huge part of home buying. I think one that first time homebuyers sometimes forget about. You need to have a lawyer for your home.
Clinton: [00:05:44] That’s right.
Alyse: [00:05:44] About insuring your home. A little bit of a home inspection. We’ll talk on that. Talk about that. A lot to cover in our final segment next week. Thank you so much for the advice so far!
Looking for more information about improving your financial fitness, or other mortgage application advice? Feel free to contact us!