Four Key Steps to Getting a Mortgage

steps to getting a mortgageIn all likelihood, a mortgage is the single largest financial transaction most people will ever make, and as such the process can be stressful, especially if one doesn’t have the right strategy or proper support.

Here are four key steps to getting a mortgage that you should consider:

Step 1. Assess your financial situation

A new default insured mortgage requires a minimum upfront down payment of 5% for a $500,000 property, up to 7.5% for a $1 million property and 20% minimum for a property above $1 million. Keep this in mind when you are looking at what property value you can reasonably afford. Consider  your existing debt load, savings and income in light of current mortgage rates and home prices to fully assess your financial readiness for home ownership. And prudence suggests that you add in some reasonable buffers to account for unexpected circumstances.

Step 2. Get Pre-Qualified

Pre-qualification is a review process to estimate how much a lending institution might be willing to lend you for a mortgage. Please note that key word ‘might’. It is NOT a guarantee of what an institution WILL lend you.  Income, debt, financial history and down payment are all considered during pre-qualification to determine the maximum loan possible. As a CENTUM Mortgage Professional, I have the most powerful pre-qualification tool, the 15 MINUTE MORTGAGE right here on my website. Simply click the link to find out how much you pre-qualify for in 15 minutes or less!

Step 3. Get Pre-Approved

The difference between pre-qualification and pre-approval is that pre-approval gives you a written commitment from a lending institution to confirm they will lend you the mortgage financing in question. As such, this step requires an in-depth assessment of your financial situation. To that end, some documents that will be required are:

  • Government identification such as a valid driver’s license
  • Details about your current job, including: a letter from
    your employer to confirm your salary; your most recent pay stub and T4 slip
  • A list of all sources of income
  • Details about any bank accounts, loans and other debt in your name
  • Proof of all financial assets
  • The source and amount of your down payment as well as a deposit
  • A proof of funds document for closing costs (these are usually between
    1.5% and 4% of the purchase price)

Note that getting pre-approved will also involve accessing your credit report. These documents are required for the lender to underwrite your file (meaning ‘your mortgage’).

Step 4. Rate Hold

A rate hold refers to a specified amount of time that a lending institution will guarantee your loan. Typically, you can lock in your approved mortgage rate for anywhere between 90 and 120 days. This means that if mortgage rates go up during the rate hold time frame, you will still get the rate that you locked in at; if rates decline, the rate you will usually get the lower rate as well.

Contact Rhonda

While ultimately rewarding, the road to home ownership can be complicated if you don’t have the right team besides you working on your behalf. Consider these four steps to getting a mortgage, and to discuss the mortgage process and your options, please give me a call at your convenience at (613) 885-1454 or use my web contact form to send me a message.  I look forward to speaking with you.

Sincerely,
Rhonda

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