Prepare to Apply for a New Mortgage, or to Refinance an Existing Mortgage
These suggestions can help you avoid the stress and blockades that many borrowers have faced along the route to approval.
If you don’t already know, getting pre-qualified is always the very first step that should be taken! However, even before the per-qualification, you need to make sure you have all your ducks in a row!Credit Review
The first thing you should do is to check your credit report. When an individual checks their own credit it does not impact their credit rating. So you can go to Equifax or Transunion (Equifax being the preferred option for most lenders) and obtain your credit information from there.
If for any reason, there are discrepancies on your credit report, this is the time to get it handled. You can start by filing a dispute with the credit report provider and proceed from there.
Make sure to gather income documents so that you have everything prepared for your application. You will require 2 years of T4’s, 2 years of NOA’s, and your two most recent paystubs.
You will require the same for any Co-Applicants.
If you are self-employed you will need to also include T1’s so that you can account for profit and loss.
Lenders require that the down payments money is in your account for 90 days prior to your application. You will also need to have your closing costs which can be approximately 3-4% of the purchase price.
If your downpayment is being “Gifted” by a parent, the lender may ask them to also prove that the money has been in their account for at least 90 days.
Divorce Settlement or Child Support
If you receive, or pay, divorce settlement or child support, you will need to provide all relevant information pertaining to those agreements.
If you have any savings in RSP, RRSP’s, Stocks, Bonds, TFSA’s, or any other savings, make sure to have the documentation available to prove how much you currently hold. You will also want to document all relevant liquefiable assets (Vehicles, Family Jewelry, Trailers, ATV’s, etc).
If you currently rent, a lender may ask for you to show you’ve been a good renter for the last year. Therefore you may require a letter from your Landlord stating your good standing with them, as well as proof of 12 months of payments, as well as your rental agreement.
If you own any properties or homes, you will need to gather any and all information pertaining to any taxes, mortgages held, MPAC documents, and rental agreements if any exist.
If you have any Bankruptcy filings, Debt consolidation, or Consumer proposal in the last 7 years, you will need to provide all legal documentation pertaining to those filings and their discharges, as well as a letter explaining what lead to those credit resolutions being required.
If you have all of this in place before making your first call to a mortgage agent, you will be ahead of the game which makes the process easier and faster!
If you have any questions or concerns, or would like some assistance I’m always here to help, feel free to contact me any time!