Of Prime Interest: Mortgage process

Your home is one the largest purchases you will ever make so it’s important to ensure you are getting proper guidance.

  • Jul. 8, 2015 7:00 a.m.

First and foremost choose the right professional for you.

Your home is one the largest purchases you will ever make so it’s important to ensure you are getting proper guidance. Ask friends and family for referrals and if you are looking online check out reviews.

A mortgage pre-approval is key. It not only avoids the disappointment of putting an offer on a home and not qualifying but also guarantees the rate for up to 120 days. A pre-approval will involve a credit consultation. If there are any issues with your credit they will be revealed and with the advice of a professional you can make a plan to improve your credit and work at achieving your goal.

Rate is important but just as important are prepayment privileges and payout penalties. Once when you fully understand your options  will the decision where to place your mortgage be made.

Qualifying your income is one of the most important requirements in the mortgage process. Especially important if you are self employed or on contract, paid commissions or have bonuses or overtime.

In order to utilize all your income, your mortgage broker has to be fully informed on where and how it comes to you. Be prepared to provide documentation confirming your income. You will be required to provide pay stubs or tax returns and CRA Notice of Assessments depending on your situation. You may also have to provide documents if you have cleared up any derogatory credit in the past. Always keep such documents.

Your down payment funds must be from your own resources and most lenders will ask for a 90 day history to confirm. If you are unable to provide the history the funds may not be used towards your down payment. There are exceptions where the funds have been gifted from a family member. The giftor is required to sign a gift letter confirming they are gifting the funds and do not expect repayment. Other exceptions do exist and your mortgage professional will guide you through the process.

An appraisal may be part of the process when you are purchasing or refinancing a home. If the appraised value does not support the value of the home you will either have to put more money down or renegotiate the price.  Some lenders use an automatic evaluation in lieu of an appraisal. If the automated value comes up short the lender will ask for an appraisal.

If you are purchasing a condo it is imperative that you review all condo documents. These provide you with the financial information with regards to the condo association. They will also reveal happenings around the condo, any upcoming renovations or special levies that could affect you. A special levy will mean cash out of your pocket and may be negotiated into the purchase price.

Above all, do not rush the process. Allow yourself at least 10 days for a subject removal date once you have made an offer. Possession date should be at least 30 to 45 days from date of offer.

If you’re mortgage is coming up for renewal, contact a mortgage professional up to five months prior. That gives you time to do the initial work and a pre-approval will hold the rate for up to four months. In times such as these when interest rates could increase at any time a pre-approval is one of the smartest options out there.

Remember, you are making a huge commitment that will impact your lifestyle going forward. Avoid being pressured into quick decisions and be fully aware of your options.

Just Posted

Remembering road crash victims in Kelowna

World Day of Remembrance for Road Crash Victims takes place Sunday in Kelowna

Constructive meeting held with Carr’s Landing Community and Recreation Association

Lake Country - Residents met with the city yesterday to discuss the area by Gable Beach Road North

West Kelowna winery to host Festival of Trees

Mission Hill Family Estate Winery will host the event from Nov. 24 to Jan. 5

UPDATE: Power outage in East Kelowna

Those still without power should have service restored by 8 p.m.

Kelowna teen allegedly robbed while walking at night

Community asked for tips to help reunite teen with ring

Families of missing Shuswap women call for action

Birthday of missing woman Ashley Simpson remembered during rally in Yankee Flats

Homeless count returns amid Penticton’s housing crisis

Volunteers are hitting the streets this week to find solid data on Penticton’s homeless population

Federal funding to combat guns, gangs and opioid crisis

Public Safety Minister Ralph Goodale said illicit drugs are often main cause of guns, gangs violence

Riverview youth mental health centre proceeds

Replacement for Maples Treatment Centre first announced in March

Dead boy’s father posts Facebook response after Appeal Court upholds conviction

David, Collet Stephan were found guilty in their son Ezekiel’s 2012 death from bacterial meningitis

Trudeau mania, Scheer enthusiasm in B.C. this week

Prime minister, Conservative leader drop in on Surrey, White Rock

Forecasters promote avalanche safety awareness to kick off season

Avalanche Canada advising backcountry enthusiasts to get proper training and equipment.

B.C. church defaced with disturbing anti-Christian graffiti

Staff at Crossroads United Church reported the vandalism to police late last week

PayPal ordered to disclose business accounts to Canada Revenue Agency

Online payments company has 45 days to hand over information identifying its account holders

Most Read