Starting with the documentation that must be filled, until the signature on the dotted line.
Whether it’s your first mortgage application or renewing a mortgage with a new lender, there are several steps to take before you get a mortgage to buy a home. Or a renewal of apply for a home loan
Choosing a potential lender
A pre-approval process if you want to know how much money you will be able to shop for your first home
- Meeting and downloading information
- An analysis of the debt service ratio
- An analysis of the property if you have found the house of your dreams
- Fill out the application
- Negotiation and commitment
- Liaison during the closing process
- Mortgage Administration
- Choose a potential lender
- Use a mortgage broker / agent
If you use a mortgage broker / agent, he will start looking for the right mortgage for you after knowing everything he needs to know about you and your needs. It will check if you meet the eligibility requirements of various lenders.
The apply for a home loan Agent / Broker will provide you with options based on an assessment of the lender, the mortgage, its structure, characteristics and risks based on the information you have provided about your personal circumstances. The mortgage broker / agent must also explain its rationale for the options that are presented.
Make sure the mortgage broker / agent provides you with information that will help you determine if you can afford to take out this mortgage, including estimating the total cost of borrowing for the life of the mortgage. The total cost of the mortgage depends on the terms and conditions of repayment, such as the interest rate and the total mortgage repayment period known as the “amortization period”. The total cost can be much higher than the amount you borrow. You must determine whether the rate, the amortization period and the total cost of the mortgage are right for you.
See the Mortgage Broker or Agent’s Checklist for more helpful tips.
Consult a lender directly or use other intermediaries
Shop around for a mortgage with the right rate and term to suit your needs, on terms that suit you. If you are using a private lender, loaning your apply for a home loan -backed funds, make sure you own a mortgage lender’s license or otherwise go through a licensed mortgage brokerage. Read the article Compare Mortgages for tips on how to find a mortgage that meets your needs.
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Do you want prior approval?
If you’re a first time buyer, it’s a good idea to get pre-approval for a mortgage before you start looking for a new home, as this can give you an idea of your budget. You can ask a Mortgage Agent / Broker to assist you in this process, or go directly to a financial institution or other lender.
You will receive a written confirmation indicating a specific amount at a certain interest rate. This offer is valid for a specific period. However, remember that pre-approval for a mortgage is not a guarantee of approval for the mortgage, since it depends on many factors, including the property you ultimately want to buy.
Your apply for a home loan / agent or lender will ask you for information to help you better understand your situation, mortgage loan or renewal goals, and the type of mortgage you want or need, including:
This additional “stress test” is the Government of Canada’s response to the sharp rise in house prices in some Canadian cities and to concerns about borrowers who have been over-indebted and may have difficulty making mortgage payments with their homeowners. Rising mortgage rates, which are currently low. All homeowners apply for a home loan for a mortgage, or renewing their mortgage with another lender, are subject to stress testing. This allows mortgage lenders to be certain that the homeowner will be able to continue paying off his mortgage in the event of a price or rate increase.
If you have already found a property, or if you are a homeowner and wish to renew your mortgage, your lender or mortgage broker / agent may need to analyze the property to ensure that its value is adequate security for the mortgage.