Mortgages: Where Do I Start?

Obtaining a mortgage can be intimidating and confusing. Our team of expert agents provide boutique services to help make this process smooth and simple.

Step 1: Get Pre-Approval From a Qualified Source

Before an application gets filled out, it’s important to first assess yourself financially. Figure out how much money you have and how much you need to borrow. It’s always critical to sort out how much you can afford so that when you apply for a mortgage you will be able to financially sustain yourself. A good mortgage agent will ask for specific documents to verify your income and debt so that your pre-approval will be accurate. Be careful house shopping without a pre-approval - you don't want to fall in love with a house you simply can't afford! 

Step 2: Choose the Right Mortgage Program

Like all homes, Canadian mortgages also come in all shapes and sizes. You have to pick which loan is more aligned with your financial situation and goals. There are four basic types of Canadian home financing loans.

A) Fixed Rate Mortgage

A fixed rate mortgage has terms that can last anywhere from 1-10 years. As the name suggests, the interest rate and monthly payments will remain the same for the specified term.

This type of loan should appeal to you if you:
  • Plan to live in the home for more than 5 years
  • Like the stability of a fixed interest payment
  • Think your income and spending will stay the same
  • Don’t like the risk of having a higher monthly payment
B) Adjustable/Variable Rate Mortgage
Adjustable/Variable Rate Mortgages generally last for 3-5 years. But during these terms, the interest rate on the loan can go up or down which means monthly payments can increase or decrease.
This type of loan should appeal to you if you: 
  • Plan to stay in your home for less than 5 years 
  • Don’t mind having your monthly payment increase or decrease
  • Are comfortable with risk of possible payment increases in the future
  • Think your income will probably increase in the future
C) Combination Rate Mortgage
A Combination Rate Mortgage combines fixed interest rates and adjustable interest rates.
This type of loan would appeal to you if you:
  • Want to manage interest rate risk
  • Choose to take advantage of both long and short term rates
  • Like the stability of a fixed interest payment
  • Don’t mind having monthly payment increase or decrease
D) Lines of Credit
A Line of Credit is becoming an innovative way to finance your home purchase. You can take the amount you need from the credit limit that you were granted. You only pay interest on what you use and this money can be put towards things like home renovations, a child’s education, and debt consolidation.

Step 3: Mortgage Submission and Approval

Once you've found your home, and an offer has been accepted, you will work with your mortgage agent to gather the required documentation to submit your deal. The mortgage agent will submit your information to the appropriate lenders, and you will wait for mortgage approval. After the approval, you will meet with your agent again to review your commitment to the mortgage. Any additional documents that are required by the lender should be sent in as soon as possible, or as requested by your mortgage agent.

Step 4: Lawyer

Your mortgage agent will send the mortgage instructions to your lawyer to review and sign the documents. First you will review all the terms and conditions prior to signing to make sure the interest rate and loan terms are what were promised. Double check to see that the names and address are correctly spelled on the documents. Signing takes place in front of a notary public or lawyer. There will be several fees with obtaining a mortgage and transferring property ownership which will be paid at closing. Bring a bank draft check for the down payment and closing costs if required. Personal cheques are generally not accepted. You will also need to show homeowners insurance policy and other requirements such as flood or fire insurance and proof of payment.

Get Pre-approved Today!
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