If you are thinking about buying your first home in Canada, going through the mortgage process can be a bit of minefield if you aren’t fully prepared, or if you don’t know what to expect. The process of getting a good rate for your mortgage can actually be much easier than you may think! The next step in the process is the mortgage application.
This article will help you to fully understand the mortgage application aspect of the process, meaning you are fully equipped with all of the information you might need to help you feel at ease and comfortable with what lies ahead.
Pre-approval for a Mortgage
It can be extremely beneficial to get a pre-approval for a mortgage. It will enable you work out how much home you can afford to buy, along with your potential mortgage payments and also the interest rate you will be eligible to receive.
More often than not, your mortgage broker will take the mortgage application for your mortgage over the telephone or at their office, it is also possible to do this securely online with some brokers. Once this is completed, your broker will be able to start the process straight away. Nearly all of the lenders that are approached will need to verify the data you have provided. It is always best to get this out of the way in advance as it can save a lot of time.
Another benefit of getting the preapproval is knowing all the extra costs in purchasing a home and a step by step process from start to finish.
Important Documents You Will Need
Proof of Income – A pay slip or job letter will normally be an acceptable form of documentation to verify your income. If you are self-employed, or work on a commission basis then the lender might request that you also provide Notice of Assessments and two years’ worth of T1’s.
Down Payment – If you are getting some or all of your down payment from a member of your family then a letter confirming this should be suffice, this is also known as a gift letter. Or, if the funds have been in your possession for some time, then a 90-day history of this will be adequate proof.
Void Check – The payments for your mortgage will be taken from your current account, exactly the same as with any other loan payments you might be responsible for. *Additional data might be needed, this is judged on a case by case basis but having your bank details with you will ensure that any void check can be carried out quickly, helping to prevent any delays with your application.
Improving Your Chances of Succeeding with the Application
There are a few ways you can improve your chances of success when going through the mortgage application process. These points below, if actioned will give you the best chance of succeeding when making your application for a mortgage.
- Get your broker to check your credit history prior to making the application.
- Keep your debts to a minimum and don’t splash out on credit purchases
- If you have no credit history, build up some history before you make your application
- Provide all of the documentation needed to you broker as soon as you can
The mortgage application process for a mortgage could be one of the most important applications you will make. it’s important to get things right first time in order to give you the very best chance of success when looking to get your mortgage in place for your first home in Canada.