Information on Financing
“It’s easier to shop when you have money in your pocket!” Get your financial affairs in order before you start to look for your home and you will cut down your home search time.
Your lender will order a copy, but you should see it first! That way, you can clear up any credit problems before you submit your loan application. Order copies of your credit report from one of the three national credit bureaus:
Experian (Formally TRW) 1.800.392.1122
Trans Union Corporation 1.800.888.4213
Get contact information from your Human Resources Department
Find out who is authorized to release information about your employment status. Provide the correct contact name and telephone number to the lender to avoid lengthy loan processing delays.
Organize your recent tax returns and financial documents.
The lender will need your financial information to determine how much you can borrow. If you don’t have all the paperwork, you can get copies by contacting your tax- preparer and others who deal with your personal finances.
Get Pre approved / Pre Qualified
A very important step when buying your home is to get pre-approved for a mortgage before you start looking at product and especially before making an offer to purchase. Prequalification is simply a calculation used to determine your maximum purchase price. Your lender will review and verify all of the available financial information and detailed in your application and then will determine the maximum amount of financing that you can afford.
Pre approvals ensure that you (the borrower) meet all of the lending institution’s criteria so that only the property needs final approval once you make an offer. Getting pre approved will also lock in an interest rate for a specific period (usually 60-90 days) to protect you in the event that mortgage rates go up. Being pre-approved also gives you the comfort of shopping for a home in your price range without the risk that complications will arise in the final hour. You will be able to make a stronger purchase offer without “subject to financing” conditions. This will allow your Realtor to negotiate harder and reach an agreement before a completing purchaser makes a better cash offer.
Choosing a Lender
I recommend that you select the mortgage that is most favorable to your situation. In order to find the best mortgage, you should plan to contact several mortgage lenders, including the lender to whom you presently make your payments (if applicable), to discuss the mortgage terms they have available, their rates, closing costs, and other fees. Choosing a lender can be very daunting but I’m happy to help you with the process.
To learn more about mortgage companies, you may want to visit the Canada Mortgage home page. You can find lenders online, in local newspapers, yellow pages or view the link below for a list of mortgages consultants and lenders that I recommend.
There will be a variety of lenders and loan terms, so use the “Canada Mortgage Link Mortgage Checklist” to help you keep track of this important information. You can also use it as a question guide when interviewing lenders about their specific mortgage plans.
Here is my checklist of questions to ask your mortgage lender. *Mortgage Checklist*
Apply for a loan
Documentation that mortgage lenders require:
Confirmation of your earnings - a signed letter from your employer if you’re on salary; three years tax returns if you earn commission; or three years tax return and financial statements if you are self employed.
Confirmation of your down payment amount - Bank statements or other evidence of accumulated savings. Often the net proceeds of the sale of your current residence will constitute part or all of your down payment. The lender will require a copy of the sales contract to confirm the amount of the net proceeds and timing.
A copy of your purchase agreement for your new home. This verifies the purchase price and terms of the purchase. You will receive this from me.
Copy of your Realtor’s property listing containing all the physical, location and financial details of your new home. If you are buying or building a new home the building plans will be required along with other permits for occupancy. Again, you will receive this from me.