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Martina Chaloupka

Getting a Mortgage


Getting your finances in order is an important first step, before you begin the home buying process.  Be buyer-ready by doing your homework in advance.  Consider the following steps:


Step 1: The down payment – determine how much you have in savings to put down on your new home. You need a minimum of 5% of the purchase price (though mortgage default insurance is required for any down payment of less than 20%)


Step 2: Define your Budget – it is a good idea to speak to a mortgage professional to assess your affordability price range. The factors of income, savings, current debt and new home carrying expenses will all impact the price range of the home you can buy.


Step 3: Get a Pre-Approval – A mortgage broker or lender can work on getting you Pre-Approved to let you know home much of a mortgage you qualify for. It can help you understand estimated monthly payments, and can help you lock in an interest rate for up to 120 days. Remember this is not a final approval for your mortgage. 


Step 4: Gather your documents – Ensure you have proof of identification, employment, your source of down payment and closing costs, and information about other assets and debts. Additional documents may be required, such as proof of salary, employment history and CRA Assessments.


Step 5: Make an Offer – When you find a home you wish to buy, your realtor will help you make an offer, which will include purchase price, date you want to take ownership, deposit information, and any other conditions to the purchase (such as final approval of financing or home inspection).


Step 6: Finalizing your Mortgage Details and Approval – Once you have an accepted offer, you will work with your mortgage specialist to finalize your final approval.  You will choose a mortgage rate, term and amortization. If you buy a home with less than 20% down payment, you will also need to arrange default insurance, which is in place to protect the lender.


Step 7: Lawyer - Your mortgage specialist will send mortgage instructions to your lawyer to who will require this information to close your deal and complete a final accounting of what you will need to pay for closing costs. Remember a bank draft is required as personal cheques are not accepted. You will also need to show proof of homeowners insurance policy.