There There are ways that can make the application for your mortgage go smoothly. My job as a Mortgage Specialist is to make your mortgage application go seemlessly but I do need your help in this.
Tip number 1 is to be realistic with down payment. If you have had some credit problems in the last 2 years your chance of getting a mortgage with Zero down is not going to happen. In Canada we can still get 0 down mortgages, but your credit needs to be impecable for the last 2 years and even more. If not you will need a 5% down payment if your credit is good and this can be gifted if you haven't had a bankrupsy. If you don't qualify for a 5% down then you can get either a 10% - 15% down.
Tip number 2 is to be realistic with interet rates. As I mentioned above we still have 0 down mortgages avaliable in Canada and because these are ussually the best of the best credit they ussually qualify for the best of the best rates. 5% down will also qualify for the best of the best rates unless you have challenged credit over the last 2 years. Ussually if the lender requires the 15% down, your interest rates are higher, because of challenged credit. Interest rates are higher because they are taking a chance on you and want you to have a signicifant chunk of your money in the house. They must figure that most people won't walk away from 15% of what thier house is worth . However if you have a refinance and have 20% in equity in your home you can get the best rates.
Tip number 3 is to know it's not always all about the best rates. This is something that you need to know ahead. You also need to know how much you can comfortably afford for mortgage paments per month or bi weekly. No one wants you to settle for a higher rate than you can get. My job is to get you the best mortgage for your needs with the best rate that I can, this may not always be the best rates out there. Again being realistic about what your monthly expenses are and what you can afford for a monthly house payment. There are wonderful interest rates out there that have conditions that you may not want to be stuck with. One of the conditions that we see in some of these wonderful rate mortgages are that you cannot refinance the mortgage for 5 years (ussually the term of the mortgage) You can sell the house and get a penalty payment. Other wonderful rate mortgages have penalty payouts in the 10's of thousands of dollars. This is not what you want to find out when having to refinance at the last minute.
Tip number 4 BE PREPARED. Be prepared with all of your documents ahead of time when going out shopping for a home. If you have all documents ready and prepared for the mortgage conditions then during the time of condition of financing it will be quick and efficient to get all of the conditions lifted to purchase your home. You should do this when refinancing as well so that it can get done quickly. Most documents needed are to verify employment, so a letter from your employer and 2 pay stubs. Where the dowmpayment is coming from so 3 mos bank statements, a gift letter, RRSP statements etc. And finally it's about the property. They want to know that the property is worth what your buying it for and all of the purchase agreement information.
Tip number 5 Legal representation. Most mortgages in Canada need a real estate lawyer to finalize all of the mortgage papers and to put the new owners of the property on title with thier mortgage. The lenders may also ask you to get independant legal representation if there are issues of seperation or not putting someone's name of title. The only reason you wouldn't need legal representation for a mortgage in Canada is if you are switching your mortgage from one lender to another without changing anything other than the lender.
Tip number 6 use your own realtor when purchasing not the sellors realtor, I have talked to many realtors about this and there is a consensus that your will get your best represntation from someone you have contrated to work for you and not the sellors realtor. the sellors realtor has already signed a contract with the sellor saying that he/she will work in their best interest. If you use the same realtor you may not get the best deal you could as you are asking the sellors rep to get you a better deal. If you contract a realtor to work for you in this instance they can work in your best interest to get you the best deal.
I hope these will help you in your future endevours of purchasing or refinancing your home. This is suppose to be an exciting time when you purchase and it can be if you know what you need to do. I hope you use these tips and enjoy the process