Part One: What to know & prepare before filling out that mortgage application
We’ve all filled out many, many application forms before – for medical purposes, car loans, school admittance, renewing passports, etc. So we’re well aware of the “standard” boxes that need to be filled out like our birth date, names and address. Yes, a mortgage application requires all that fun stuff too, along with much more personal information. But a mortgage application provides homebuyers with some important figures. It gives back!
By applying for a mortgage pre-approval, homebuyers can begin a bidding war knowing what they can afford and roughly how much they will spend on their monthly mortgage payment. Ideally, anyone looking to buy a home should complete a pre-approval prior to purchasing.
A pre-approval tells you what you can afford and it also gives you a heads up on what type of documentation will be required of you before your lawyer can hand you the keys.
We’ve broken down our list of mortgage application essentials into 3 easy sections:
Write a list of questions for your Surrey mortgage broker. Ask us anything. How can we help clarify some of your mortgage concerns or questions?
Employment – the application will ask you detailed questions on your employment. Please specify how you get paid and how long you’ve been at your current job.
Are you a salary employee? If so, what’s your base and if there are bonuses, provide us with the last 2 year’s bonus amounts.
Are you on contract? We’ll need to see a copy of the contract as well as your full tax returns for the last 2 years.
Are you self-employed? We require confirmation of business ownership along with your personal tax returns for 2 years and your business financials for 2 years.
Are you an hourly employee? Usually your T4 income from the last 2 years, a recent pay stub and a job letter will be sufficient.
Downpayment – The mortgage application will ask you how much downpayment you plan to put down on a property and where these funds are coming from. Your downpayment amount is a crucial part of calculating just how much you can afford.
How much do you have saved up? If the downpayment is coming entirely from personal savings, we’ll need to see a minimum of 3 months history on the account.
Will you be receiving any help from family?
Are you expecting any funds to come your way?
This information has to be disclosed on the application because of different documentation requirements for each.
That’s it – you’re ready to start filling in the boxes. It may seem daunting and all the questions may become confusing, but now that you’ve got the essentials covered and the documentation ready, we’ll assist with you the rest!