The Process of Financing Your Home
The financial part of buying a home can be a daunting task whether it's the first or fifth home you're buying
Learn about this before you even think about meeting with a Realtor to look at homes. You will then be prepared and more relaxed knowing what to expect.
- How much is the minimum down payment?
- What documents does my bank want?
- How do I pay the money to the seller?
Buying a Home and Financing it: Frequently Asked Questions
Here is a list of frequently asked questions regarding financing your home purchase. Please keep this on hand in as you may find it handy in the process.
Down Payment
What is the minimum down payment I need?
The minimum down payment for a re-sale, owner occupied residence is 5%
Documentation
What documents do I need?
For the pre-approval the mortgage representative will need:
- Income verification
- If salary: current pay stubs
- If self-employed/commission/bonus: Last two year Notice of Assessments
- Signature page
Once you have found a home he will need:
Down payment and closing cost confirmation
He will need to see a recent account (RSP, bank account, investments) statement showing the down payment amount and 1.5% of the purchase price for closing costs
- Lawyers full contact information
- Application completed
- Purchase Agreement and MLS listing
Amendments
What happens if I do an amendment?
It is important that any changes are brought to my attention right away to assure they are completed properly and on time.
Timelines
How long does a pre-approval take?
Once the application form is completed a pre-approval can take 24-48 hours
Once I find a home, how long does my full approval take?
It is important to have all your documents ready ahead of time as the mortgage representative will need your full financing condition period to assure you a stress-free approval. The approval will come back in-between the moment the last documentation is received up until your financing condition date. (Usually 3 to 4 business days)
Mortgage Rates
Is my mortgage rate guaranteed?
Once a product has been chosen a mortgage representative can hold that rate for 120 days. If you are buying a new build and then builder mortgage rates can be held for up to 2 years.
What if rates go down?
If rates go down before you move in, you get the lower rate. If you see rates have decreased contact the mortgage person anytime and have the review the changes. Also, when you are marking your closing date on the calendar, mark a reminder to contact the mortgage rep two weeks prior to this date so they can review all your details and assure you are getting the lower rate.
What if I find a lower rate?
Mortgage representatives work hard to assure clients have one of the most competitive rates in Canada on the best product for their needs. If you happen to find a lower rate please bring it to their attention so they can look into matching or beating it.
Signing
When do I sign?
Once your full approval is in place the mortgage representative will formalize the documents and invite you into sign. (Usually 7 business days after your approval)
Bridge Financing
I feel I need a bridge loan, how do I get one?
If your closing date on the house you are selling is after the closing date on the house you are purchasing you will need to bridge the mortgage.
Contact the mortgage representative, as the bridge loan request is client initiated. From this they will complete and collect the following:
- Bridge loan worksheet
- Pre-authorized payment form (with void cheque to be included)
- Sale agreement from your current home including confirmation that all the conditions have been waived
Last Minute Changes
How do I make a last minute change?
Once you have received our pre-signing verification email with all the details of your mortgage and have responded back confirming they are correct your application is then locked out and you are ready to sign.
After this time of confirmation, changes to the application (down payment amount, product type, names on the mortgage, etc.) can be made however as a caution they are difficult and can take up to 14 days as your application will have to be re-completed from the start and re-evaluated by the adjudicators and CMHC (if less than 20% down)
To assure a stress free process, It is important that when you are confirm the final details that you are certain they are as you would like them.
Lawyer
My lawyer has questions regarding my mortgage, what do I do?
If your lawyer contacts you with any questions during the process please have them call the mortgage representative immediately.
I applaud you if you got this far, feel free to email me any questions you might have at this time.
