Your Canadian mortgage checklist
You’ve worked hard and saved for years, spending wisely and preparing to take the big leap into the big, scary world of home ownership. Here’s Canadian mortgage checklist that can help you stick the landing:
Figure out your finances
For many people, a mortgage is the biggest loan of their life. With home prices higher than ever, people are questioning whether they’re even financially ready to buy. It’s important to take a hard and thorough look through your finances and make that decision for yourself.
Aside from having enough money for the down payment, you need to calculate if you can afford the monthly carrying costs of owning a home and having a mortgage. Many people forget about utilities, maintenance and repair costs, property taxes, and of course, home insurance when they start thinking about how to buy a house. These secondary costs are often what stretch people’s pocketbooks to the point of breaking.
It could be a good idea to work with a financial expert to go over your assets and debts to figure out just how much you’d be able to afford while still being able to maintain your preferred lifestyle and be prepared for emergencies.
Compare mortgage rates
There are more sources for a mortgage than your bank. Use online comparison websites to quickly get the lowdown on what rates are out there and if you’re ready, you can even start the approval process right there online. You can also compare home insurance rates online, since you will need to get that squared away before you get a mortgage.
Have these documents ready
One of the best things you can do for your mortgage checklist is to get pre-approved before you actually start looking at houses. To do that, once you’ve found the rate you like, start putting together some basic documents required when applying for the loan:
- Your Notice of Assessment from the past few years
- Proof of income (usually in the form of pay stubs)
- Your most recent T4
- A general list of your current assets and liabilities
- The lender may contact your employer to confirms your time at your current place of work. You can also try bringing a letter
- Your SIN card
Think about getting home and life insurance policies
When you actually get the mortgage, shop around for both home insurance and life insurance in order to protect your property. When you get your mortgage, you may be asked to bundle in mortgage life insurance. If so, turn them down or make sure you’re opted out of that. A general life insurance policy will offer you greater flexibility and security when it comes to making sure your mortgage doesn’t become a burden on anyone else should you pass away before it’s paid off.
Start shopping around for a home
Now comes the fun part. You’ve applied for a mortgage, gotten pre-approved, and now you have a budget to work with for finding your home. Good luck and happy house hunting!