I’ve been writing a lot lately about the year’s strong economic fortunes in our province, and what I’ve neglected to speak about is buying and mortgage timelines and processes that occur during these peak times.
Buying a house can be very stressful, and often times the pressure can be avoided by the professionals that you hire and also by being prepared for the eventual offer to purchase a home.
Ideally we as mortgage professionals like to have our clients well-educated and fully prepared before they make their home buying decisions, but sometimes the advice isn’t heeded.
The steps to buying a home should be the same for everyone. Go to your mortgage professional first, consult your home buying professional whether that be a realtor or home builder, then move forward with your purchase.
Those steps are typically the easy ones. The details inside those meetings are what really matter.
If your mortgage professional has provided you with a list of documentation to bring up front (which anyone dedicated to their career will provide) you will have brought them most of your income and down payment information up front. Often times clients bring bits and pieces of it thinking that it will be satisfactory, but if your list of documents deviates from the list your mortgage professional advises, you are simply making your own mortgage process that much more difficult.
The lenders have a structured list of what their requirements will be and if the documentation deviates from that, they need to get exceptions from upper management to complete. There are almost always exceptions to meet – the less exceptions, the smoother the transaction and the quicker the turnaround time.
As a guide, most mortgage professionals will request that you have most of your documentation upfront, then the lender should provide a list of outstanding documents when your offer goes live (meaning you have made an offer to purchase someone’s home). They will also request five to 10 business days (weekends do not count as business days) to complete the full approval (seven to 10 days is preferred during peak times like this season).
In that time, the lender has to fully verify your income-meaning call your employer, double check for red flags in all of your documentation (income and down payment being most important) and ask any pertinent questions if not already completed before hand.
If needed the lender and mortgage insurer (CMHC, Genworth or Canada Guaranty) may also require an appraisal on the property. Appraisals, pending access, can take three to five business days to complete, and they don’t normally order them until they fully approve you, which may take a couple of days.
Lenders are extremely busy this time of year and are sometimes dozens if not hundreds behind in their application queues, especially if rates creep up 10 or 20 basis points – as hundreds of people apply to get the best rates available to the few last standing lenders.
The best thing to do is to be organized, prepared for the worst and listen to your professionals. Their experience will be crucial with completing your deal smoothly and efficiently.
Jean-Guy Turcotte is an Accredited Mortgage Professional at DLC Regional Mortgage Group.