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The Mortgage Process


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The Mortgage Process

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