The Approval Process
What is being looked at in an application 

I have heard the terms mortgage pre-qualification and pre-approval explained differently many many times, it's just confusing. Let me try to simplify it to what you actually need done to get a mortgage. You start by choosing an experienced professional (pick me pick me) who then reviews the below in accordance with the current mortgage rules...

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The Rules

A seasoned mortgage broker will also understand the lender and insurer guidelines well so if any of the above areas will require an exception (when we go outside of the “rule box”) then we can work on that before your information actually goes to a lender. Exceptions can be minor items, or they can also be what holds an application back.  

The Areas Reviewed in a Mortgage Application

Application Details (employment, savings, where is the down payment coming from etc)

Servicing Ratios (the numbers, income vs home debt and income vs all liabilities)

Credit Report (preferential to have 2 pieces of active credit, 2 years history on that credit and a minimum of $2,500 limits)

Material documents (down payment, employment)

Does Mortgage Pre-Qualification/Pre-Approval guarantee final approval?

No, but it provides as much security as you can have at this point. Reason being, there are conditions to approval which cannot be met until you find a property such as: 

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Lender Approval

Most lending underwriters do not review applications unless there is an offer to purchase in place.

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Insurer Approval

If the down payment is less than 20%, then it is mandatory to attain default insurance. The Canadian Insurers are CMHC, Sagen and Canada Guaranty. Your application cannot proceed without their approval and they will only review an application if there is an accepted offer to purchase.

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Exception Approval

If an application requires an exception (see above), it cannot be officially approved until the application is live (an accepted offer to purchase in place).

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Property to Meet Guidelines

Pre-qualification is always pending the property meeting lender and insurer guidelines. For example, property must be marketable and in reasonable condition, some lenders/insurers will not accept age restricted properties, electrical up to code etc…

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Lender Verification of Documents

Once the lender/insurer approve the application, the lender reviews your documents for accuracy as to what was stated in the application. Once reviewed the lender will send notification of documents approved or they may request further information. This is why it’s important to get your documents to your broker as soon as possible for pre-checking.

Please note this is a general guide only and the lender/insurer may add conditions as necessary.

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MORTGAGE CALCULATORS

We are very proud to offer the BEST Mortgage Calculator App in Canada.

 

  • Pre-Qualification Calculator

  • Purchase Calculator

  • Payment Frequencies

  • Extra Payments

  • Amortization Schedule

  • Scenario Management

  • Refinance Analyzer

  • Compare Mortgages Side-by-Side

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Let's Stay in Touch

Received Thank You!

The beginning of your adventure starts with the mortgage application

Step 1: The Application

What happens after I submit an application?

Within 24hrs you will be contacted by Nikole with any additional questions and/or information for you. Please complete the application in full, this is the #1 reason for delays at this stage and I want to be quick for you. 

Is my information secure?

All of your data is encrypted, secured and we only use Canadian servers. Click here for more information on the security of the application process. Click here to view TMG's privacy policy. I am also a 100% paperless office. 

 

What happens if I don't qualify right now?

Then we plan. Our homes are typically our largest asset and debt, it's normal to need some planning time. 

My realtor asked for a pre-qualifying letter?

No problem, I can provide that after application review.

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