The Mortgage Process

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  • 1. The Mortgage Process 2011 Robert Lumb
  • 2. The Mortgage Process - Simplified Step 1. – Mortgage Pre-Approval Step 2. – Shopping for your home Step 3. – Mortgage Application Step 4. – Subject Removal Step 5. – Legal Process
  • 3. Mortgage Pre-Approval
    • Protects your negotiated rate up to 120 days.
    • Determines the price range of your new home.
    • Makes the purchase process smoother.
  • 4. Qualifying
    • Must have at least 5% down of purchase price - a limited number of programs still offer 100% financing.
    • First time home buyers may be eligible to use their RRSP’s for a down payment.
    • Mortgage Payment + taxes + heating costs* < 32% of gross monthly income.
    • Monthly debt including Mortgage payment < 42% of gross monthly income.
    • You must be able to pay closing costs of at least 1.5% of purchase price.
    • Credit history
      • Lenders will obtain a credit report which identifies your overall credit standing
  • 5. Shopping for Your New Home With your mortgage amount Pre-Approved, you and your realtor are able to shop for the home that best suits your needs.
  • 6. Preparing an Offer Your Offer or Agreement Will Include:
    • Basic details
      • Your legal name.
      • Name of vendor.
      • Legal and civic address of property.
      • Purchase price
      • Conditions
    • It is recommended using a qualified Realtor and/or seeking the advice of a
    • lawyer before finalizing.
  • 7. Mortgage Application
    • An Invis Mortgage Consultant will help you:
    • understand your mortgage options
    • identify documents required for speedy application approval, ie: employment and down payment verification, survey certificate and appraisals
  • 8. Mortgage Application Mortgage Options
    • Open Mortgage
      • Repay the loan without penalty.
      • Interest rates can be higher.
      • This may be a good choice if a client is planning on selling their home in the near future.
      • Lenders will usually allow conversion to a closed mortgage at any time.
  • 9.
    • Closed Mortgage
      • Offers terms from 1-10 years fixed rates
      • There are often penalties or restrictive conditions for prepayments or additional lump sum payments.
      • May not be the best choice if you might move before the end of the term.
    Mortgage Application Mortgage Options
  • 10. Mortgage Application Mortgage Options
    • Variable Rate Mortgage
      • Variable/Adjustable interest rate tied to prime
      • Generally convertible to a fixed rate mortgage. At times a penalty may be charged
      • Most Variable Rate Mortgages are for 3 or 5 year terms
  • 11. Mortgage Application Mortgage Options
    • Terms & Payment Options
      • Terms from 6 months to 18 years, amortizations up to 35 years. Some lenders offer up to 40 year amortizations on conventional financing up to 80%.
      • Flexible payment options
        • Weekly
        • Bi-weekly
        • Monthly
  • 12. Mortgage Application Mortgage Options
    • Other Options
    • Bruised credit? There are options for you.
      • Financing through “B” lenders with varying mortgage programs.
      • Private Lenders available for unique situations.
      • Up to 100% financing.
      • No income verification products.
  • 13. Associated Costs
    • Some common costs of buying a home:
      • Appraisal fee
      • Land transfer tax or PPT
      • Survey / title insurance
      • Legal fees
      • Home inspection
      • Property taxes
      • Fire insurance
  • 14. What a Lender Wants:
    • Personal Info
      • Age, marital status, birthdates, dependents
    • Details of Employment
      • Proof of Income
        • T-4’s
        • Notice of Assessments
        • Letter from employer
      • Other sources of income
        • Pensions
        • Rental income
        • Investment income
  • 15. What a Lender Wants: Other Financials
    • Current banking information
      • Name of Financial Institution.
      • Average cash balance of account(s).
    • Verification of down payment
      • 3 months of bank statements showing account holder name and account number.
    • Consent to complete credit investigation (Invis Client Agreement)
  • 16. What a Lender Wants: Assets & Liabilities
    • Assets
      • Property
      • Vehicles
      • Investment Account Balances
      • RRSPs
      • RESPs
    • Liabilities
      • Credit Card Balances
      • Personal Loans/Vehicle Leases
      • Total amount owing & monthly payment amounts
  • 17. What a Lender Wants: Property Details
    • A copy of the property listing
    • A copy of the Agreement of Purchase & Sale for a resale home
    • Appraisal of property
    • Plans and cost estimates on a new home
    • Condo financial statements, if applicable and strata minutes included AGM
    • A certificate for well and septic, if applicable
  • 18. Subject Removal & Legal Process Once all conditions have been met and the subjects removed the lender will forward all documents to the lawyers where the mortgage and title transfers are signed
  • 19. Working With an Invis Mortgage Consultant
    • We act as liaison between the lender and the borrower.
    • At Invis we are independent, which means we offer unbiased advice and have the client’s best interests in mind.
    • Our primary role is to determine the financial needs of our client and find the mortgage products that best fulfills their needs.
  • 20. An Invis Mortgage Consultant has your best interest in mind
    • We simplify the process of mortgage financing.
    • We negotiate with lenders for the best possible products and lowest rates.
    • We help you achieve your goals of home ownership.
    • We have the experience and the expertise to work on your behalf.
    • We know what mortgage products are available in the market.
  • 21. About Invis
    • Founded in 2000, Invis is one of Canada’s largest mortgage brokerage firms, with offices from coast to coast.
    • We leverage our buying power to get the best service and terms for our clients.
    • We save clients valuable time and possibly thousands of dollars when it comes to home financing.
  • 22. Our Strengths & Specialties
    • Provide maximum flexibility in financing choices.
    • Provide counseling on credit & qualifications.
    • Arrange & coordinate the mortgage closing.
    • Assist with purchase, renewal, construction & renovation financing.
    • Provide efficient & highly personalized service.
  • 23.
    • For most clients there is no fee for our services – the lender pays for our fees.
    • A fee may apply when working with a client with bruised or poor credit history.
    Fees
  • 24. Whether You Are:
    • Buying a home?
    • Purchasing an investment property?
    • Restructuring debt?
    • Renovating?
    • Renewing your current mortgage?
    • Contact: XXXX
  • 25. xxxx Invis Phone: (403) 555-5555 Fax: (403) 555-555 Email: [email_address]