- Mortgage Process
- Why F1RST CHO1CE
- Mortgage Values
- Why Casey Charlton
- Mortgage Basics »»
- Mortgage Solutions
- » Purchasing A Home »»
- » Pre-Approvals
- » Mortgage Refinancing
- » Mortgage Renewals
- » Tax Smart Mortgage
- Mortgage Products
- Mortgage Insurance »»
- Mortgage Partners
- Mortgage Tracking
- Mortgage RATES »»
- Mortgage Calculators
- CMHC Resources »»
- Mortgage Closing Costs
- Mortgage Credit »»
- Mortgage FAQ’s »»
- Mortgage APPLICATION
- Mortgage Review
PURCHASING A HOME: continued
Step 4: Making An Offer: If you have decided that this is the right home for you, decide on a figure and have your agent prepare the Offer (Agreement of Purchase And Sale). With your agent, list everything you want included (i.e., conditions on financing and inspection, survey clause, appliances, light fixtures, etc.). At this time, you may want your lawyer to check it out, and certainly prior to waiving any conditions to make the offer firm.
A firm offer: means that you will buy the property as outlined in the offer of purchase and that there are no conditions attached. Once the vendor accepts the offer, you are both bound to the agreement.
A conditional offer: means that you will buy the property if those certain conditions are met. We recommend that a condition on financing is included, especially for high-ratio insured mortgages. If you have a condition on financing clause, get in contact with us right away. The condition on finance should be for at least 3 to 5 business days, so that you and your mortgage broker have enough time to get your live approval. The following is a list of documents and information that you will need to provide in order to obtain your approval from the lender. (note depending on the lender and situation, documents may vary)
- Copy of the accepted Purchase and Sale agreement
- Copy of the MLS listing (if listed on MLS service)
- Completed and signed application (unless you were pre-approved with our office already)
- Confirmation of your down payment: it may be from your savings, RRSP, equity from the sale of another home (copy of sales agreement would be required if property sold less than 3 months), or a gift letter for any money that has been gifted
- If you are a salaried employee, a letter of employment outlining your name, base salary, hours worked per week and length of service along with a recent pay stub and possibly your last year’s T4 may be required
- If you receive the majority of your income from commission sales, three years of personal taxes (T1 Generals) as well as three years of notice of assessment will be required to calculate an average…A two year average may be used if the down payment is greater than 20%.
- If you are considered self-employed, 2 years of personal taxes (T1 Generals) as well as 2 years of notice of assessment will be required to calculate an average…A two year average may be used if the down payment is greater than 20%.
- If you are self-employed and you have incorporated your company, some lenders will also ask for three years business financials and three years business tax returns along with the three years T1 Generals and three years of Notice of Assessments.
Once all conditions have been satisfied (the offer has been accepted), a deposit is required as a symbol of commitment to the offer of purchase, and it is made payable to the listing Real Estate Firm “In Trust”. Interest on the deposit can be requested, and this deposit will be applied towards your down payment on closing.
Step 5: Closing the deal and taking possession: After the mortgage has been approved and all conditions waived, you must deliver the following documents to your lawyer:
- Copy of the complete accepted offer to purchase (all schedules, waivers, etc)
- Certificate of Fire Insurance – The insurance company will need to know the details of property and Mortgage Company to prepare this. Lenders usually require you to arrange for full replacement value of the building.
- A copy of a Survey, signed by a qualified land surveyor. In lieu of a survey, title insurance is acceptable with most lenders.
- Advise us of the name, address, and phone number of your lawyer so that the mortgage instructions can be sent to him/her.
- You should arrange for utilities (such as electricity, water, fuel, and telephone) to begin service in your name.
- A few days before the closing date, you will meet with your lawyer to go over all details. At this time, you will also be provided with a dollar figure so that you can prepare your certified cheque, made in trust to the lawyer. This amount will cover for the balance of the down payment, closing costs and adjustments (please refer to section: “Closing Costs and Adjustments” for details and estimated costs).
On closing day, the lender will provide your lawyer with the agreed mortgage funds to close the transaction. Your lawyer will register the property and the mortgage in your name, and obtain the keys and the deed for you.
At F1RST CHO1CE Mortgage Solutions we’re passionate about sharing our knowledge, experience and unbiased opinions with borrowers who are looking for a trusted advisor to help them with their financing options.
ANY QUESTIONS?…Contact a Mortgage Advisor today!