If you are buying a home for the first time, you need to get financing. So, what do I need to apply for a mortgage?
Research is the first step of the loan application process. Familiarity with budget, the type of desired property, and the type of loan that will work best for you are some of the vital issues you need to figure out first. The key to getting the loan you want is to be prepared.
One of the key aspects you will need to review is your credit history. Your credit score can be a make or break factor in the determination of whether a lender gives you financing. In fact, most credit reports contain erroneous information... more than forty percent of all credit reports contain at least one error. So, make sure you stay on top of your credit report! Both credit bureaus in BC (Equifax and transunion) have consumer websites available where you can sign up for a monitoring program for a fee, or request a free copy of your credit score. That way there are no surprises. Problems are best solved BEFORE you are applying for a mortgage! Even if there aren’t any errors in your credit report, a lot of people have no idea that their credit score is so average... they pay most of their bills on time so they assume they have great credit. This is not always the case. Your mortgage consultant can go over your credit file with you and make suggestions for improvement. Again, this is best done well in advance of applying for a mortgage.
Once you have completed your preparation, it is time to actually apply for a mortgage. So, what are the hard items you are going to need?
1. And Employment Letter on Company letterhead and Pay stubs for the last 30 days.
2. Documented proof of any other income such as alimony payments, stock dividends and such.
3. Monthly investment statements – 3 months.
4. Bank account statements for the last 3 months.
5. T-4 Forms covering the past two years.
6. Notice of Assessments (NOAs) for the last two years.
7. Bankruptcy/Foreclosure filings, if any.
8. Any estimate of proceeds from another home you are selling, including the MLS listing.
9. A statement should be included explaining where the down payment for the home is coming from. Many lenders require formal documentation or a gift letter.
10. Documents showing ownership and value of any high worth assets.
There are various self-employment programs and stated-income mortgage programs offered by numerous lenders, in which some of the employment document requirements are relaxed. Some even recognize that self-employed individuals typically earn more money than is reflected on their income taxes returns, due to expenses, and will ‘gross up’ the income for the purposes of qualifying for the payment. Your mortgage consultant can best describe the various programs to you.
At the end of the day, the documentation is not really that difficult of a hurdle to jump. The key is to know what you need, organize it and provide it to the lender. These are not documents that you want to be ‘scrambling’ for as your deal is closing, as an inability to provide them could result in your financing being denied. Get your documents to the lender and get pre-approved BEFORE you have an offer on a property!
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Rebecca joins the team with over 20 years of business, investment and real estate experience. A true advocate for the consumer, Rebecca brings you unparalleled integrity with unbiased advice. Phone anytime and discover for yourself just how easy and enjoyable the mortgage process can be.
Serving Greater Vancouver Area
& Fraser Valley BC
Direct 604.614.2382
Fax 604.463.7886
rebeccaawram@homenwork.com
www.communitylendingcentre.com
Head Office:
#200 - 5050 Kingsway
Burnaby, B.C.
V5H 4C2
