HOW THE MORTGAGE APPROVAL PROCESS WORKS
COMPLETING A MORTAGE APPLICATION – this entails getting your basic information and you providing supporting documentation such as T4’s, notices of assessment, job letters, pay stubs, confirmation of downpayment etc. The reason we gather this information at the onset is to ensure that we have a complete picture of your situation which will save you stress in the long run.
GETTING A PRE-APPROVAL – generally, a pre-approval without supporting documentation simply means you have a rate hold which can happen when shopping with a bank especially if you walk out but have not given them anything except a signature on an application form. There are any number of variables in regards to source of income, downpayment etc. that can turn your “approval” into a decline once you have a live contract in place and all the documentation is finally presented to the bank for review.
When we work with you, we want to make sure you have a true pre-approval so will ask you to provide the documentation up front. Please note, at this point the lender may approve you as purchasers but they must still approve the property you are buying so we would consider this a “conditional” pre approval.
SHOPPING WITH YOUR REALTOR – you are now ready to go shopping with your realtor to find the home you love. Should you find a home with a rental suite, we can usually use this income to help qualify you whether or not it is a legal suite.
YOUR OFFER IS ACCEPTED – once your offer has been accepted, your realtor will send us a copy of the purchase agreement. Once the deal is approved, it is not uncommon for the lender to come back with additional requests for information. The faster we send this in, the faster we will then be given an “unconditional” approval. We will be working with a subject removal date which is the date that all subjects, including financing, need to be removed. This date is chosen by you and your realtor but is typically 10 to 14 days after the offer is accepted. At that point, we will also have documents for you to sign.
CLOSING – about a week before closing, the lender will send instructions to your lawyer/notary and the lawyer/notary will be contacting you to set up a time to go in and sign. They collect your downpayment money at signing which also includes the deposit that you gave to your realtor when the offer was accepted. This money was held in trust until your closing date. There will be closing costs which your lawyer will clarify with you and if you have specific questions regarding legal costs, property transfer tax etc., please discuss with your lawyer/notary as things may vary depending on your personal situation. An accountant would be a good source of information for questions regarding capital gains.
CONGRATULATIONS – YOU ARE A NEW HOME OWNER!
So now it is up to you to find the place that you want to call home. We will do our part to make sure the process is as stress free as possible for you!
Above Information compiled by:
Karen Shale & Bell Sproule, Mortgage Brokers Contact them at firstname.lastname@example.org
For more information contact:
Terri Ann Novello, REALTOR (250) 808-1005
Century 21 Assurance Realty Ltd.
251 Harvey Avenue, Kelowna, BC