A Step-by-Step Guide

Step 1. Begin Mortgage Process

The first step in obtaining a loan is to determine how much money you can borrow. In the case of buying a home, you should determine how much you can afford even before you begin looking.

Although Canadian lenders conform to standards set by Canadian government agencies, loan approval guidelines vary depending on the terms of each loan. In general, approval is based on two factors: your ability and willingness to repay the loan and the value of the property.

Step 2. Mortgage Application

A mortgage associate will take a mortgage application by phone, in person or a client is welcome to submit an application online at their convenience. Once your mortgage application has been received we will start the loan approval process immediately by way of MyMortgage.ca verifying all of the information you have given.

Step 3. Select The Right Mortgage Program

Canadian home financing loans come in many shapes and sizes. Deciding which loan makes the most sense for your financial situation and goals means understanding the benefits of each. Whether you are buying a home or refinancing, there are 4 basic types of Canadian home financing loans. Each has different reasons why you'd choose them.

1) Fixed Rate Mortgage

Fixed rate mortgages usually have terms lasting 1 to 10 years. Throughout those years, the interest rate and monthly payments remain the same. You would select this type of loan when you:

• Plan to live in home more than 5 years
• Like the stability of a fixed principal/interest payment
• Don't want to run the risk of future monthly payment increases
• Think your income and spending will stay the same

2) Adjustable Rate Mortgage

Adjustable Rate Mortgages (often called ARMs) typically last for 3 to 5 years. But during those years, the interest rate on the loan may go up or down. Monthly payments increase or decrease. You would select this type of loan when you:

• Plan to stay in your home less than 5 years
• Don't mind having your monthly payment periodically change (up or down)
• Comfortable with the risk of possible payment increases in future
• Think your income will probably increase in the future

3) Combination Rate Mortgage

Combination rate mortgages combine fixed interest rates and adjustable interest rates. You would select this type of loan when you:

• Want to manage interest rate risk.
• Take advantage of both long and short term rates.
• Don't mind having your monthly payment periodically change (up or down)
• Like the stability of a fixed principal/interest payment

4) Home Equity Lines of credit

MyMortgage.ca can offer Home Equity Line of Credits (HELOC) up to 65% LTV, so homeowners can enjoy access to additional funds with more flexibility and convenience. Lines of credits have become an innovative way to finance your home purchase. With as little as 35% down you can utilize a line of credit on your home. In the past clients had to put down 20%. This new line of credit is fully open for repayment without penalty and can be used for any purpose, such as home renovations, investments, a vacation, child’s education, or debt consolidation. You can borrow and pay back as much as you need, up to your credit limit, and pay interest only.

80% Home Equity Line of Credit:

• LTV Maximum: Up to 65% Canada Wide
• Rate: Variable rate, floats based on Prime
• Can be placed behind most first mortgages without incurring penalties. No need to change or transfer your current first mortgage. (only available in some provinces)
• Flexible repayment options — you can just make the required interest monthly payment or pay a larger amount up to the entire balance.
• You can use some or all of your available line of credit at your convenience.
• Your line of credit has no expiry date — it's yours as long as you need it.
• Setup fees are as low as $399 plus appraisal costs. (only available in some provinces)

Step 4. Collecting Documentation

The client will submit to the mortgage associate any appropriate documentation required (ie: job letters, pay stubs, offer to purchase, feature sheet).

Click here to access Document Check List.

Step 5. Mortgage Submission

The mortgage associate will then shop the application for the best Canadian mortgage financing product and rate.

Step 6. Mortgage Approval

The mortgage associate will send the mortgage approval (commitment) to the client via email or fax.

Step 7. Review Commitment From Canadian Lender

The mortgage associate will then review the mortgage commitment with the client.

Step 8. Mortgage Documents

Any additional documents that the lender may request should be sent to the mortgage assocaite no later than 10 days after mortgage approval.

Step 9. Mortgage Lender Instructions

The mortgage lender will send the mortgage instructions, to your lawyer.

Step 10. Lawyer

After your loan is approved, you are ready to sign the final loan documents. You must review the documents prior to signing and make sure that the interest rate and loan terms are what you were promised. Also, verify that the name and address on the loan documents are accurate. The signing normally takes place in front of a notary public or lawyer.

There are also several fees associated with obtaining a mortgage and transferring property ownership which you will be expected to pay at closing. Bring a bank draft check for the down payment and closing costs if required. Personal checks are normally not accepted. You also will need to show your homeowner's insurance policy, and any other requirements such as flood insurance or fire insurance, plus proof of payment.

Your mortgage financing loan will normally close shortly after you have signed the loan documents.

Please Note – If there are any changes to your application please notify your mortgage associate immediatly as this may effect your approval.

Please Note – If you decide to change your payment frequency, term or mortgage amount you must notify your mortgage associate and provide appropriate paperwork to support changes applicable.

In order to improve your chances of getting a loan approval:

1. Fill out your loan application completely. You may use our online forms to expedite the process. Apply online HERE.
2. Respond promptly to any requests for additional documentation especially if your rate is locked or if your loan is to close by a certain date.
3. Do not move money into or from any of your bank accounts without a paper trail. If you are receiving money from friends, family or other relatives, please prepare a gift letter and contact us.
4. Do not make any major purchases until your loan is closed. Purchases cause your debts to increase and might have an adverse affect on your current application.
5. Do not go out of town around your loan's closing date. If you plan to be out of town, sign a Power of Attorney to authorize another individual to sign on your behalf when your loan is expected to fund.