Mortgage Process

It’s important to get recommendations from friends, family, and other trusted people when looking for the right mortgage expert. Your chosen mortgage expert will take your personal data, such as name, address, income and down payment source(s) for the purchase. They will ask your permission to pull your credit report. After pulling your credit report, the broker will be able to give you a fuller picture of the likely situation for you in getting a mortgage that meets your needs. They will then ask you a few focused questions, and from there, prepare your file for a purchase. The initial process is very quick, and your personal data will be processed the same day, enabling you to get some initial feedback regarding your purchasing power.

The phone conversation with your mortgage broker is an important strategic meeting, with the goal of focusing your search is terms of both what you want and can buy. At this phone conversation you and your broker will make sure that you can afford what you want, without the monthly payment threatening your financial health. You and your broker will be looking at the probable scenarios to determine what is affordable to you, such as a condo, townhouse, a house with or without a rental unit, as well as deciding which areas would be within your price range. At the end of the meeting, your consultant will be able to get a mortgage that will not just finance your property, but enable you to reach your financial goals in both the short- and long-term. Based on your goals and situation, you and your consultant will decide on whether it makes more sense to choose a fixed or variable rate, the term that best serves your goals, and other important parameters which will affect your ability to save both today and 20 years from now.
Since each lender offers different programs, this meeting will help your mortgage broker determine which lenders would be best secure the mortgage that will meet your needs. With the information from this meeting, you’ll also be able to go back to your realtor, who will then have search parameters to find properties that meet both your needs and your wants. At this stage, the mortgage broker will send you a list of documents to prepare. Good preparation will save you both money and time! To see the list of documents you will need, please either click here or call us!

It sounds easy, but unfortunately, finding a good realtor is not. A good realtor will bring knowledge and capability far beyond what you could get from a database. They will be able to define, clearly and accurately, the profile of the property you’re looking forward. The good realtor is responsive and communicative; with them, you’ll get immediate notification when a house that fits your criteria is placed on the market. The realtor will ensure that neither your time nor money, nor your emotional resources are wasted. If you set your heart on a particular property, your realtor will have an effective strategy for getting that property. The best realtor will create a focused search for you, and make sure to provide you with properties that meet your needs and wants. Furthermore, they will review the condo documents and will be able to see things about properties that you might not have even known to look for, and will veto a house, even if you like it, saving you potential headaches and heartaches.

We have a small, quality list of realtors which we work with, ones who work in focused areas and bring an exceptionally high standard of work to the table. We’re more than happy to share our realtors, and why we chose them, with you.

This is the fun part of the process! There’s nothing like shopping for a house; for immigrants in particular, buying a home is often a deeply meaningful experience far beyond just buying real estate. It can be a very fulfilling experience, making the buyer feel like they are now truly a part of their chosen country. It’s very important to focus, and to only go and see those properties that fit both your needs and budget.

In Canada, buyers typically don’t make offers on multiple properties at once. Once you find the “right” property, your realtor will guide you through the process of writing an “offer of purchase.” This offer will be very detailed, addressing factors like price, time to closing, what is included with the house, what adjustments and repairs will be expected of the sellers, etc. An important detail is whether the house is “subject to purchase,” giving you the exclusive right to purchase the house, but without obligating you to do so. It’s very important that you have at least seven to ten business days before you commit to the purchase; this will give you time to check the condition of the house and ensure you have the right financing for this house. All of this is done before you commit to purchasing the house.

At this stage, the seller will respond to your offer, and there will be a back and forth over various terms, such as price and dates. There won’t be any face-to-face negotiation. Instead, your realtor will forward your offer of purchase to the seller’s realtor. The sellers will then review the document, and forward it to your realtor, who will forward it back to you. It’s possible that they will either sign everywhere, accepting your offer as is. However, it’s also quite likely that they will erase or mark through some of your conditions, writing their counter-offer over them, and signing the offer and initialing all of their changes. It’s important to note that every time you make a counter-offer, the seller has the option of rejecting the entire contract. If you and the seller work out all of the terms, and they accept your offer, the accepted offer will be signed by all parties. Depending on how much negotiation has occurred, the final product might look like a draft with lots of marks. In hot markets you’ll find that you have to go with no subjects and commit to the deal even before you have the finances secured. This happens because all other competing offers will be with no subjects at all. In this case thorough preparation and a pre-qualification process done with the lender will put you in a better competing position. We are here to make it happen.

Lots of happiness all around – the price and terms are agreed upon. Now, the work begins. You have a very short timeframe to get a mortgage approved and to get a bank committed to it, as well as to check the quality of the building and make sure this is a good purchase.

This part of the process will feel like a race against time. In just seven to ten days, you have to finalize your mortgage and inspect the property. During this time, you will be in constant contact with both your mortgage expert and your realtor.

Financing Commitment: In most cases, the bank will give you an approval that will indicate the mortgage amount and offered terms. Sometimes, the offer that your bank will extend is insufficient, and so it’s important to have enough time to approach other lenders should the need arise. It’s important to know that your bank commitment will have conditions, or requirements, of you. Should you fail to fulfill any of the conditions, even the tiniest ones, the bank will have the right to withdraw their mortgage offer. One of the terms, which takes 3-4 working days, is having the house appraised within 30 days. You pay for the appraisal as part of the expenses of purchasing the house, while the bank orders the appraisal and owns the documents.

At this point, if you have a down payment that is less than 20% of the purchase price, you will have to be approved by a mortgage insurer, Genworth Canada Guaranty, or CMHC. This takes time, and does not always have a positive result. Our process accounts for time to prepare upfront so that we will be able to satisfy all of the bank’s requirements and have all conditions checked off to ensure that, when the time comes to remove the subject of financing, you have a confirmed mortgage with no risk of the bank cancelling.

Locating a Solicitor: At this point, you will need to select a lawyer or a notary public who will act on your behalf in transferring the ownership of the property from the sellers to you. They will receive their commission as part of the purchase expenses. Sometimes, you’ll be able to choose an attorney from the general pool of attorneys who practice real estate law in your area, whereas in some cases, you’ll be limited to a specific list of attorneys. In either case, it’s important to get recommendations from your friends and other trusted people in order to find a good lawyer. We’ll be happy to help you and to recommend our trusted solicitors.

House Inspection: Inspection is not mandatory and the cost can get to hundreds of dollars. Still, we highly recommend having one done, especially when purchasing a debauched house. Given the cost of real estate in Canada, buying a house with a few known problems can be an expensive mistake. It’s important to remember that most houses in Canada are built of wood, and the foundations and structure are sensitive to weather, humidity, and water damage. In Europe, a leak in the washroom and a spot on the ceiling usually means you fix the leak and paint the ceiling. In Canada, a water leak can destroy the house’s structure from inside the walls, requiring tens of thousands of dollars of professional repair. If the leak is in a condo, the condo will have an assessment against it, and both banks and insurers might refuse to finance it.

On this day, you will be asked to commit to the purchase. If you’ve decided that this is the house that you want, you will have to prepare a certified cheque for the sellers. The deposit cheque will be deposited in a trust account belonging to the seller’s realtor. You will also sign an addendum for the removal of all the conditions to the purchase; at this point, you are committed to purchasing the house without conditions. If you decide later on that you don’t want the house, the sellers have the right to cash the deposit check, and you may also be asked to pay more. Before signing the addendum to removing the subjects, you should expect a verbal confirmation from your mortgage consultant that your mortgage has been secured with no critical conditions. At this point, the house’s status in the computer system will change to “sold,” and a “sold” sticker will be attached to the “For Sale” sign in front of the house, indicating that the sale is complete.

In larger Canadian cities, things can happen fast. From the minute you start looking for your house until you submitted your initial offer, it may have been only a few days or weeks; from the removal of subjects until you get the house, it can even be a few weeks. It’s a very fast process, similar to the timetables of rentals. During this time, there are a few things you’ll have to take care of:

Bank meeting: Some banks will require a mandatory meeting at the branch as a condition of taking the mortgage. At this meeting, you’ll set up an online account, and you’ll be offered other services from that bank.

Meeting with the lawyer: A few days before getting the financing and the keys, you’ll meet with an attorney to sign all of the original documents, register the house, and transfer ownership. The lawyer will explain the details of the mortgage contract and answer all of your questions. Don’t hesitate to call your mortgage consultant for any clarification, even if you’re sitting in the attorney’s office. It’s important to know that your attorney is the one who coordinates everything financially. On the day you complete the sale, the certified cheque you deposited on the day of subject removal gets transferred from the seller’s realtor’s trust account into your lawyer’s trust account. The mortgage funds are also deposited into your lawyer’s trust account; they then calculates the final balance, including their commission, insurance, provincial and federal taxes, and anything else included in their instructions from the bank.

Finding a moving company: Taking care of this in advance will pay off. Most moving companies are very busy at the beginning and end of the month, especially in spring and summer. Contact us to learn about how our experts can pack and move your house in less than one day.

Transferring utilities: You’ll need to transfer your telephone, cable, internet, electricity and gas, disconnecting service at your old home and connecting it at the new location. It’s important to budget a few hundred dollars for the fees and deposits as part of the expense of purchasing your new home. Start this process a month in advance in order to give the utility companies notice to coordinate technicians to complete these services.

This process usually takes place over two or three days. On the day of completion, your mortgage funds will be electronically transferred to your lawyer’s office and combined with your down payment. It’s then the lawyer’s responsibility to complete the transfer of ownership, register the mortgage, and release the funds to the sellers. One to two days later, usually during the afternoon, your realtor will give you the keys. You will typically receive the house in good condition for immediate move-in. It will typically be empty and very clean, including clean floors, carpets and cabinets.

Our goal is to strategically manage your mortgage, maximizing your savings not just over the five-year term, but over the 25-30 year life of the loan. Every time a bank offers a promotion that affects you, or the market or your situation changes, we’ll invite you to check your options to save more money. Every now and then we’ll check in with you and see if your needs and priorities have changed, and if adjustments need to be made to your mortgage based on payment pressures, or changes in the rates in the market. Our aim is to prepare you for rate changes and to adjust your payment according to the inflation rate, protecting you from unnecessary payment shock at the end of the term. Gradual adjustments will prepare you for the change in your monthly payment and cash flow.