Things move quickly these days. Order online & your package can be there the next day! Message your friend & you get a reply in a millisecond. However, when applying for a mortgage, the process doesn’t happen in a flash; it can take several days or longer for the paperwork to be reviewed and documents signed. Here are some of the key things you need to know and also have ready so that you can nail down that mortgage pre-approval and swoop in with a firm offer on that home.

Why get pre-approved?

Getting pre-approved for a mortgage is kind of like having a membership card to an exclusive club. It’s the “get out of hassles free” card, wherein you have the confidence knowing that you have been approved by a lender for a specific amount of money, and that unless something drastic happens, the money will be there waiting for you when you make an offer to purchase a home. It also helps in the following areas:

• Understand your price range – after reviewing your documents, the lender will give you a maximum loan amount you’re approved for. This way, you’ll know exactly what you can start looking for in a home, without going over your price range.
• Competition advantage – You never want to be in the unfortunate situation where you have found your dream home only to have someone else swoop in with a firm (pre-approved) offer. When looking for a home, sales agents and buyers are keen to make a firm deal, so when you’re pre-approved, your offer goes to the top of the pile. No one likes the uncertainty of waiting around for a buyer to get mortgage approval; they want to sell that home fast.
• Learning about real-estate – During the process of going through a mortgage application and getting pre-approved, you’ll have learned a lot about the different types of mortgages, interest rates, the housing market ups and downs, qualifying rules for the ‘stress-test’ as well as what, if any, rebates or government incentives you may qualify for.

And now…the paperwork

Getting the required paperwork together is key to having the pre-approval process run smoothly. Your lender or mortgage broker will have to verify a lot of your personal information, there’s no getting around it. Here’s a list of the documents you will need for yourself and your spouse – keep in mind that some lenders may require additional information, but this list is an important starting point:

• Paystubs – the last 2 stubs are required (more if you are a part-time employee). Proof of deposit from your employer is not sufficient as it needs to show all deductions.
• Proof of income from all and any other sources such as EI, child support payments, etc.
• Bank statements going back 90 days.
• T4 statements from the past 2 years and the Notice of Assessments (CRA can re-issue these if requested but it takes time).
• Information and bank statements on any money that was given as a gift towards the home. purchase or down payment, including signed statements from those who gifted it.
• Documents about any current loans you are paying (such as car loans) and other debt.
• RRSP information – only if you are a first-time home buyer.
• For self-employed applicants, there are additional document needed such as your business license, T1 statements and so on.
• For newcomers to Canada, there are other documents required – be sure to ask your lender or broker.

As you can imagine, finding and preparing these documents isn’t always straightforward; our lives can be very complicated. However, buying a home is a great investment, and worth the time to get your financing pre-approved. By doing so, you gain a great advantage – not just the competitive boost, but the peace of mind knowing that you’re all set and ready to go. As an experienced mortgage broker, I work closely with my clients to help them through each step of the application, which includes helping them sort out the myriad of paperwork and making sense of it all. Be sure to connect with me before you start house-hunting – call me at 705-315-0516 and I’ll help you get everything in place, so you can swoop in with that fabulous, firm offer!