While your first appointment to discuss your mortgage might be exciting, the volume of paperwork can be equally overwhelming. While you inch towards purchasing your dream home, you need to walk on the right side of formalities. To ensure a smooth and glitch-free path to buy your property, make sure to carry the necessary documents.
In this post, the experts have explained what documents you should be carrying when you follow up on your first mortgage appointment. Most probably, you are likely to obtain your pre-approval on this big day. Therefore, being informed about the documentation process pays, as it can mitigate possible delays.
Visit this site to know how long it takes to get mortgage approval in Canada.
Why Does Being Prepared With The Documents Matter?
Incomplete documentation or missing information happens to be the prime reason for delays in mortgage approval. As a property owner, you would like to get through the process as smoothly as possible. Therefore, carrying all the relevant documents makes sense to ensure zero hiccups during your mortgage approval process.
Once you meet the mortgage professional, you need to furnish the documents to make the decision. Therefore, you need to be prepared with all the mortgage professionals’ documents.
Your First Mortgage Meeting: What Should You Expect?
Your first mortgage meeting would be the best opportunity for you to demonstrate your financial strengths. Therefore, it would be something more than just an exchange of greetings. Prepare yourself to provide answers for a series of questions that the mortgage professionals would fire at you.
These questions are designed to elicit adequate information about your financial stature. Moreover, they would demonstrate the entire process of mortgaging to you. Finally, after reviewing your documents, they will provide necessary mortgage recommendations that would go well with your finances and lifestyle.
Apart from organizing your documents, be clear on presenting your short and long-term goals. Moreover, this initial meeting would be the right time to clear your doubts about the mortgage process.
Essential Documents To Carry To A Mortgage Appointment
Now that you know the necessity of being equipped with the relevant documents check out what you should carry to the mortgage appointment.
Proof of income
Every creditor would be concerned about your financial health. They would inspect your flow and source of income. After all, purchasing a house might be your life’s biggest expense. Considering the weight of this responsibility, they would ask for relevant income proof.
Therefore, make sure to carry your income documents that would validate your claims regarding your financial stature. The mortgage authorities would determine the mortgage you qualify for on evaluating these documents. It will also give them an idea about your debt ratio.
For traditional employees, it would be wise to carry two of the most recent pay stubs and T4s. Also, carry a letter of employment from the organization you are currently serving.
However, self-employed professionals need to furnish a few more proofs. This includes tax returns or financial statements for the last two years, business T1 general, and other documents related to your income. In this case, you may obtain the proof of income statement from the Canada Revenue Agency.
Record of available funds
Whether you reach out to a bank or NBFC for a property mortgage loan, the authorities would like to know how much funds you have as savings. Remember, you need to make a sizable down payment when you purchase the property.
Besides, purchasing a property involves associated costs like your closing expenses. Therefore, you should provide the mortgage authorities with the records of your available funds.
You need to furnish the documents carrying relevant details in your TFSA or RRSP accounts or personal savings in your bank.
Information about your outstanding debts
The pre-approval process also involves the evaluation of your credit report. While most mortgage brokers lookout for potential customers, they would also be careful about your outstanding debts.
Therefore, it would be wise to carry the records showing your debt balances. This includes all sorts of outstanding debts, including car loans, lines of credit, personal loans, and credit card loans.
As credit reports get updated every month, the latest record may not reflect your fresh credit report. Therefore, you may prepare the latest balances manually. Before proceeding to the appointment, scan your credit report for possible errors.
Proof of your assets
It would be a logical move to carry the proof of your assets. Sometimes, mortgage professionals ask for cash reserves, bank statements, and investment account statements. You can demonstrate your financial status to make the down payment in the process.
Although the proportion of down payment varies, you need to shell out at least 5% of the value of the property as the down payment.
Moreover, you can dodge the expenses of purchasing a mortgage default insurance if you pay at least 20% of the property value as a down payment. Also, carry the records of all the assets you own, including your car, property, etc. This would eventually strengthen your position as an applicant for the loan.
Things To Ask During A Mortgage Appointment
Being a potential property owner, it’s natural for you to have several questions in your mind regarding the process. During the appointment, you get an opportunity to know the system comprehensively. Here are some of the common aspects you would be keen to know.
- Whether or not an interest lock-in facility is available
- Whether there is any guarantee for closing on time
- The length of the processing period
- The overall cost you need to pay, including processing charges
- Whether or not there is a penalty for prepayment
- How you can obtain a better interest rate
As a property owner, you need to adopt a smart stance to ensure breezy mortgage processing. It pays to consult the experts who can guide you through the clutter.
While the documentation process appears to be the most daunting task during a mortgage appointment, being organized holds the key to pacifying the approval. Hopefully, you can now zoom through the process as you already know what documents you may have to furnish!