The mortgage application process entails the submission of a document to a lender while applying
for a mortgage loan to obtain real estate. The extensive application contains information about
the purchased property and their employment history. Below is the list of information that
usually exists in this application.
And Information regarding the assets and liabilities.
This is the first step an applicant must take to secure funding for a property in Canada. The
information provided in the application would be meticulously assessed, so the applicant must
ensure complete accuracy while filling out the form. It is to be noted that the decision to
grant the amount would be based on the application.
The applicant must also submit a photocopy of the real estate listed or information regarding the
size of the plot, plans, and location in case of a new property.
The contents of the mortgage application generally include information on the:
This section entails personal details of the borrower, such as:
Dependents (if any)
Type of credit, i.e. whether the application is joint or individual
Date of Birth
Social Security Number
Address of the current employer
In addition to the abovementioned information, the applicant must submit documents such as bank
and salary slips. The applicant may produce an income tax return for the last two financial
years in case
the individual is self-employed.
This section requires the applicant to mention information regarding the assets and liabilities
Assets to be mentioned include details of the bank and savings accounts of the applicant,
of deposits, and brokerage accounts for stocks and bonds.
Liabilities shall include any revolving credit, such as credit cards, personal loan
other outstanding debt.
Information regarding the valuation of any other real estate owned by the applicant.
This section includes details regarding the property the applicant is interested in purchasing.
Address of the property
If the applicant obtains the property with a goal, rent it out. Then the expected rental
income shall be
The loan amount and the type of loan
This section requires the applicant to answer a series of questions concerning the intent of the
the utility of the property, or any other legal or financial matters not mentioned in the
questions are generally framed like this:
Whether the property acquired will serve as a primary or secondary residence?
Are there any ongoing judgments, lawsuits, or liens against the applicant?
Does the applicant have any past foreclosures, or whether they are a guarantor for another
This section requires the applicant to sign acknowledging every information provided in the
true and accurate.
The information submitted will be evaluated and verified by the bank’s underwriter. The
would examine and determine the loan amount and the interest rate based on the application.
In case the mortgage application is approved, the bank will send a loan estimate detailing
and a commitment letter.
The applicant would be liable to pay a deposit on the closing costs to balance the cost of
Overview of Steps involved in Mortgage Application Approval
The mortgage financing process can be boiled down to 3 stages. The first
stage is the discussion stage which involves a consultation with a mortgage
evaluate the applicant's situation and decide on the next course of action. The second
stage is the Pre-approval stage, where the applicant produces the required
assessment. The final stage is the Approval Stage, where the applicant formally
financing of the mortgage, and other vital details concerning the mortgage are finalised.
In this stage, the interested individual initiates a conversation with a mortgage broker to
the requirements and determine whether the applicant is financially eligible to apply for a
step enlightens the individual on the requirements they have to fulfil to commence their journey
homeowners. The concerned individual would be notified of important information like the amount
borrow from the banks and the interest rates levied.
This stage conditions the individual before they start their mortgage application.
In this stage, the applicant submits the mortgage application and all the necessary documents.
It is to be noted that producing all the required documents is a highly crucial step and should
with utmost sincerity. As the documents requested are assessed and ultimately determine the
A pre-approval from a lender substantiates the approval of a mortgage application. The applicant
free to shortlist properties within their budget and even make them an offer.
The application is submitted to the selected lender with documents, financial details of the
property details for which the mortgage is applied. The application then enters an electronic
the underwriter’s reviewal.
Mortgage Underwritingis determining whether the applicant is eligible for a
evaluating their credit worthiness.
The lenders examine the application against the guidelines to assess whether the risk is
The key factors which are taken into account are:
Commitment Processingis the next step of the mortgage application process
underwriter approves the loan.
The conditions will specify which documents are required to be submitted to verify the
employment, and assets. The lender will then review the documents requested and, if
approve the amount.
The lender disburses the loan amount to the instructed bank account on the Funding Date.
the amount,the realtor would formally register the applicant's name on the property's title.
Pointers for your Mortgage Application
The applicant can refer to the below-mentioned tips to ease the application process for their
Evaluation of Credit Score
The credit score is segmented into five categories:
The credit scores will run from 300 to 900.
An applicant shall be mindful of their exact credit score.
The credit score of the applicant will determine the mortgage rates. A higher credit score
will ensure a
low mortgage rate.
Ideally, the credit score of the applicant should be at least 660.
In addition to the credit score, the credit report will also factor in information regarding
payments, credit history, and the overall debt levels of the applicant.
Set Aside a Larger Down Payment
The applicant should reserve a substantial fund for the down payment.
A significant downpayment on the purchase of the property would reduce the burden on the
would also diminish the interest levied on the loan.
The minimum down payment depends on the value of the property. If the property is valued at
Less than $500,000: 5% of the purchase price.
$500,000 to $999,999: 5% on the first $500,000 and 10% of purchase price above $500,000.
$1 Million+ : 20% of the total purchase price.
The downpayment amount is also factored in a while assessing the mortgage application.
Demonstrate Income Stability
Post coronavirus, the income stability of the applicant has become more vital.
The bank prefers applicants who are employed in full-time roles as it substantiates their
Stable employment also helps the applicant to get better mortgage rates.
A self-employed individual must showcase their operations' consistent profitability for a
period. The concerned applicant can also employ a licensed mortgage broker to ease the
If the applicant is applying for a joint loan, then it is ideal that both the participants
Close-off Existing Debt
The applicant can pay off any outstanding debt before applying to better their chances of
The applicant would be less burdened if they settle any outstanding debt before the mortgage
Any outstanding debt might impact the applicant's debt to income ratio, which is
before the approval of the mortgage.
The existing debt would also influence the loan amount and the mortgage rate.
Getting pre-approved from the lender before submitting your mortgage application is advised.
The lender will evaluate the financial viability of the applicant and will accordingly
individual for a set mortgage amount, interest rate, and tenure.
The validity of the pre-approval lasts 90 to 120 days.
A pre-approval from a lender liberates the applicant to house-hunt within their budget.
A better mortgage rate would lessen the monthly payments, ultimately making the mortgage
to service. This would allow the applicant to borrow more.
The interest rate on the mortgage is not solely based on the mortgage application.
Applicants can consult mortgage brokers to identify lenders who offer lower mortgage rates.
give personalised advice to the applicants, which can be useful.
Applicants can also start researching and comparing the mortgage rates across the county to
get the best
Ans: The mortgage application process generally takes anywhere
between 11 to
25 days. The steps in the pre-approval stage are usually constant throughout
However, some finer details might vary from province to province.
Ans: The borrower signs the mortgage contract after finalising
it with the
Upon receiving the contract, the bank will disburse the loan amount to the
account to obtain the property.
Ans: The underwriter evaluates the delinquency risk on the
application. They will assess the applicant’s income stability, credit history,
factors that shall be examined to assess the viability of repayment.
Ans: The applicant must produce the following documents to be
eligible for a
mortgage in Canada: Photo identification, verification of Income and Employment,
on any outstanding debt or financial obligations and details regarding assets
applicant may own.
Ans: The key factors which are determined by the lender for the
are credit score. The higher the credit score, the better your chances of
getting your loan
Another factor to keep in mind is the Debt to Income Ratio. To qualify for a
ratio should not exceed 43%. The third factor to be considered is Down Payment.
substantial downpayment would reduce the
amount to be borrowed and improve your chances of getting approval on your
Get The Best Offer
Table of Content
What is a Mortgage Application
Mortgage Application Requirements
Overview of Steps involved in Mortgage