The Mortgage Process
Beneath is a quick abreviated explanation of how the mortgage process works. For more information on any of the points feel free to contact us for a better explanation.
"I have decided to buy a home, how do I get started."
1) Figure out your Down Payment.
The standard down payment amount is 5% of the purchase price of the home. So if the cost of the home $200 000 then the downpayment should be $10 000. Although, there are lenders that offer mortgages with nothing down having a down payment gives you the opportunity to work with more lenders and qualify for better rates. Also if you have a larger down payment this may help your situation if you have had issues with credit in the past.
On any mortgage where the down payment amount is less than 20% of the purchase price the client will pay an insurance premium. These mortgages are called high-ratio mortgages and the financing institutions see them as a higher risk to take on, because of this the lenders get them insured by another company generally CMHC or Genworth. The insurance premium is a one time fee and ranges from 0%-7%. Every situation is different and your mortgage broker can give you a more precise number.
2) Find out what mortgage amount you qualify for.
We would love for you to use a mortgage broker from Best Edmonton Mortgage or at least a mortgage broker for this process, but not every one does. Of couse you have the option of going to your bank and starting the process there. You will want to get a few things in order before you meet with your Mortgage Broker/Bank.
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2 months paystubs
- 2 years notice of assesments (Taxes)
- A letter of employment from your Human Resources department or Supervisor
We will then take the information you give us and accurately provide you with a pre-qualification number. This will allow you to know what the highest offer you could put on a home as well as how much your monthly payments will be. This allows the client to search for home with confidence.
3) Search for a home with the help of a REALTOR and put an offer on a home.
4) We will send your paperwork into the Lender for approval. Here the lender may ask for more documents. For example they may ask for 3 months bank statements to prove that you have saved up enough for a down payment. If you are using RSP contributions for the purchase they may ask to see your RSP statement. This generally takes 5-7 business days. If the lender has everything they need then you are one step closer to owning a home.
5) We then will ask you to sign at commitment letter. A commitment letter outlines the details of your mortgage. For example the total loan that is required to purchase the home, the interest rate, the length of term, and what your monthly payments will be. If you are comfortable with everything that is written then the financing part of your home purchase is complete.
Determining the Best Mortgage Term
Why Use a Mortgage Professional
Using Home Equity to Your Advantage
Self Employed Mortgage Solutions
Paying Off Your Mortgage Faster
Mortgage Life Insurance Explained
Understanding Your Credit Report
Getting a Mortgage Pre Approval
Fixed Rate or Variable Rate
Getting a mortgage Pre-approval Video
Mortgage Videos
BEST EDMONTON MORTGAGE
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