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Step #1: Start the Mortgage Process

First, you’ll want to determine your new mortgage budget, before you purchase your new home. Are you able to meet your repayment requirements? How much can you afford to pay each month? These are crucial questions to ask before you start, as they’ll be the determining factors of whether or not your lender says yes or no.


Step #2: Start Your Mortgage Application

To get your mortgage application started, it’s highly advisable that you hire an experienced, licensed mortgage professional to help you throughout the entire process. Only they know the ins and outs of the entire process. There are options to begin your application online, and after you submit your application, it’s reviewed and verified by a mortgage agent, who will quickly help you to get your approval. But it’s also highly advisable that you start with a pre-approval first. This will give you a good idea of what you can afford.


Step #3: Choose the Right Mortgage Product

Since there are so many mortgage products out there, it’s extremely important to pick the right one that matches up with your specific needs. Here are a few of the options that are available:


  • Fixed-rate mortgage. Choose an amortization period between 5 and 25 years, with the same fixed-rate mortgage interest rate and monthly payment amounts for the entire selected term.
  • Variable-rate mortgage. Get an amortization period between 3 and 5 years, but keep in mind that there is a chance your monthly payment amounts will likely increase, depending on the Bank of Canada and their lending rate.
  • Combination-rate mortgage. A combination of both fixed-rates and variable-rates. This will enable you manage the risk of your interest rate, taking advantage of long-term and short-term interest rates. It’s also provides you with the stability you might be looking for in regards to having a fixed principal amount, interest rate, and monthly payment amount.
  • HELOC (Home Equity Line of Credit). Get a HELOC up to 80 percent LTV Canada-wide, grant you more flexibility and convenience, with access to extra cash for whatever you need, when you need it. It’s a great way to finance the purchase of a new home, and you can repay it without any penalties.


Step # 4: Gather your Documents

The type of documentation you may need to gather will all depend on your mortgage product of choice, and whether or not you are self-employed and/or incorporated. Less will be required if you are an employee of another business.


Step # 5: Submit Your Mortgage Application

Once you’ve completed your mortgage application, and gathered the necessary documentation your mortgage broker can go over the mortgage solutions available for your circumstances. Once the product is selected, then can submit your mortgage pre-approval or approval application. Your mortgage broker could receive an update on your application status within the same business day, and then they will notify you.


Step # 6: Mortgage Commitment Review

Once you’ve been notified of your approval, your broker will ask you to come in to discuss your lender’s response and mortgage commitment with you, address your concerns and answers your questions.


Step # 7: Additional Mortgage Documentation

If your lender has requested additional documentation, you must ensure that you send the requested documents within 10 days of your mortgage approval.


Step # 8: Final Loan Documents

Your lender will forward your final loan documents to your lawyer. Your lawyer will help you in reviewing and understand all documents before you sign on the dotted line to ensure all information is accurate and acceptable to you. You need to sign your final loan documents in the presence of a lawyer or notary public. Also, this is the time when you pay your closing costs, so be prepared with a bank draft, as your closing will happen shortly thereafter all documents have been signed.