Planning to buy your first home? Is your family outgrowing your current home and need to make a move? Read on to learn the ins and outs of applying for a mortgage whether its your first time buying, or if you’re moving onto something new.
The Ins and Outs of Applying for a Mortgage
When talking with clients about purchasing a property, one of the first suggestions I have for them is to speak to a lender and find out what they can afford. It is always good for home buyers to know how big they can dream, so that they won’t be disappointed if they fall in love with a property only to learn that it is out of their price range.
In order to provide readers with knowledgeable advice, I sought out four mortgage professionals in the Huntsville area and asked each of them the same questions. I spoke to Amanda Knapp of TD Bank in Huntsville, Neil Donald of Scotiabank in Huntsville, Jennifer Koop, a mortgage agent with Cottage Country Mortgage in Huntsville and Samantha Garrod, a mortgage agent with Concierge Mortgage Group based out of Huntsville. The questions asked were as follows:
Banking professionals: Why should I apply for a mortgage at a bank?
Amanda Knapp explained the benefits of applying for mortgage through a bank saying they offer a wide range of financing options including traditional mortgages and lines of credit secured by the property. Neil Donald points out that there is no one size fits all solution for customers who are looking for a mortgage – the goal of a financial advisor with a bank is to offer their customers choice and to help them make an informed decision. Knapp also highlighted that when dealing with a bank, you are working with a local individual who understands the community and the types of properties that are in the area; banks are also able to offer other products in conjunction with a mortgage such as credit, investment, and day to day banking options.
Mortgage agents: Why should I apply for a mortgage through a mortgage broker?
Samantha Garrod indicated that a mortgage agent has access to a wide range of lending sources—banks and credit unions included—so it is easy to find the best mortgage product to suit each individual client’s needs. Jennifer Koop pointed out that mortgage agents can match clients with good credit ratings to products that can save them money, while also offering alternate forms of lending or advice regarding ways to improve credit ratings. Garrod added that, with a larger mortgage company, a mortgage agent will have “clout with lenders to negotiate volume discounts that can lead to lower rates and greater product choice for their clients.” Potential clients should know that there is no charge to work with a mortgage agent. Koop said that only in “the most challenging credit situations” is a fee charged to her clients. Mortgage brokers and agents are licensed and regulated by the Financial Services Commission of Ontario, and are held to a high standard of practice, and must stay current on the ever changing regulations governing the mortgage industry.
What documents do I need to apply for a mortgage?
The answer to this question was very similar from each mortgage professional; when you make an appointment to discuss a mortgage at your bank, or mortgage agent’s office, be sure to bring the following with you:
TWO pieces of identification (one with a photo)
Proof of income (current paystubs, 3 months of bank statements, Income Tax Notice of Assessments, Income Tax returns)
Gift letters (if your down payment is not coming from your own savings), and/or a letter from your employer to confirm length of employment and job security may also be required by a lender.
The more information you have to document your financial situation, the smoother it will be while applying for a mortgage. Again, I always suggest to my clients that they look into a mortgage before we begin searching for properties; pre-approval allows you to search for properties within a certain budget and once you have found a property of your liking, the formal mortgage application commences (which is when all of the above documents will be required). Once you have found a home that you wish to purchase, your lender will require a formal Agreement of Purchase and Sale, and there will likely be an appraisal ordered as well. Donald points out that it is helpful to provide your lender with contact information for your Realtor as well as the lawyer you will be working with to purchase your home.
What if I am self-employed or work seasonally?
Living in Muskoka, the reality is that many potential home buyers are either self-employed, or seasonally employed. This does not mean that owning a home cannot be in your future. It just means that there will possibly be some further documentation required and more long-term planning will likely be needed before purchasing your first home.
Amanda Knapp pointed out that a lender initially obtains your income from the figure on Line 150 of your personal income tax return, and your Income Tax Notice of Assessments for the past two years, while Samantha Garrod mentioned that she works with lenders who specialize in mortgages for self-employed and seasonal workers. Jennifer Koop also indicated that if you have been a seasonal employee for the past two years with the same employer, then you can use your income with this employer as well as your Employment Insurance benefit to help you qualify with many lenders that she works with.
If you have more questions about applying for a mortgage, renewing, or if you’re wondering how it works to move your mortgage to a new property it is very helpful to touch base with a mortgage professional to get an idea of how the process works. I would like to thank Neil Donald, Amanda Knapp, Jennifer Koop and Samantha Garrod for their help in sharing some information for potential home buyers. Please find their contact information below:
Samantha Garrod, Mortgage Agent, Concierge Mortgage Group 705 783 1913 www.samanthagarrod.com
Neil Donald, Financial Advisor, Scotiabank 705 789 7993 ext. 4201
Jennifer Koop, Mortgage Agent, Mortgage Man, Dominion Lending Centres 705 349 0502
Amanda Knapp, Financial Advisor, Toronto Dominion Bank 705 789 4434
Casey has lived in Huntsville most of her life, and returned in 2012 with her own family. She believes that it is a great place to live, play, and raise a family. Casey has been helping families find their perfect home since 2014. Whatever her clients need—be it their next family home, downsizing for empty-nesters, vacant land for development, or a recreational property—it is Casey’s mission to find what works best. Her knowledge of Huntsville and surrounding area gives her an unique advantage, resulting in her being able to find a property that meets the needs of the whole family. Casey is the proud mother of an energetic, curious 3-year old, and will welcome a new addition in early 2016. She loves to spend time with her family on the shores of a Muskoka lake, a hiking trail in Algonquin Park, or making memories on a family vacation.
Casey Jagosky – Sales Representative, Coldwell Banker Thompson Real Estate, Brokerage