Kevin’s mortgage timeline: The start to finish of buying a home.

How long is a piece of string?

The timeline for getting a mortgage and closing on your home purchase can take between 11 to 22 days. It took Kevin 12. But that’s because he asked the right people for help and he doesn't procrastinate. Much.

To begin with, Kevin was smart enough to do the following three things:

1. He found himself a great real estate agent with a wealth of experience in leading people through this process.
2. He talked to his financial advisor. These conversations have helped him understand the process and get the best possible interest rate.
3. Lastly, he got a good lawyer (this feels like the opening line to a joke).

Step 1: Find a mortgage broker/agent to find a lender.

Kevin wasted no time in finding a good broker to help him find the right lender, and they soon provided him with options of lenders, and their products. With his advisor’s help, he determined which rate, amortization period and total cost of the mortgage were right for him. When he felt he had found a good fit, he gave them permission to approach the lender. They then let Kevin know what information and paperwork he had to provide them with.

When you choose a broker/agent, you should be asked to sign a written acknowledgement that they have disclosed the risks associated with the mortgage they have presented.

Step 2: Complete your application and get pre-approval.

Once Kevin handed over the paper-trove, his advisor completed the application on his behalf which they then submitted to the lender. The lender then undertakes a complete evaluation, looking at your down payment, debt-income ratio, assets, and credit score to determine your mortgage approval limit.

In most cases, you should receive a response in 2-3 days. For this to happen, you’ll also need to sign a Credit Authorization Form giving the mortgage broker/agent or lender authorization to perform a credit check. You can learn more about your credit score here. Kevin subsequently received a letter of pre-approval, detailing the maximum amount of a mortgage he could qualify for, and his estimated payments. This letter will also include an interest rate that is locked in for 60 to 120 days.

important to note

That said, getting pre-approved is the best way to work out how much home you can afford. Do this before you start looking! Otherwise you might fall in love with a home that is waaaay out of your reach. Which sucks. It also makes getting your final mortgage approval so much easier. You can learn more about pre-approval here.

Step 3: Hunting down the paperwork.

Paperwork can be one of the things that slows your mortgage process down the most. Kevin was clever. He put his head down and got it done. To help you be like Kevin, you can find a nifty printable list that you will need detailing the documentation and information you will need, here.

Step 4: Start your search.

Now that you have all of your finances settled, and you have pre-approval sorted, you can start looking for homes. This is the fun part. And the hard part. Kevin and his partner fell in love with many homes that were not meant to be. The best bet is to hire an agent that you have a good connection with, and who is familiar with the neighbourhoods you’re interested in. Have a discussion with them about what your needs and wants are. They’ll
also look at your budget and let you know if your expectations are realistic or not.

As you start to browse homes, you’ll eventually come across a property that you’ll want to put an offer on. Your realtor will draw up the paperwork and recommend a price and any conditions. You may not win the first home you bid on, but when your offer is eventually accepted, it’ll be a thrill.

Step 5: Mortgage approval – the underwriting process.

Right, now is when the rubber hits the road and all sorts of very legal and financial things start to happen. Once Kevin found his home and had his offer accepted, he let his lender know to start these complicated balls rolling (the underwriting process).

It’s similar to pre-approval, but may require further information on the property in question. In the end, Kev received a mortgage approval confirmation. It was followed by his lender sending an official commitment. This document included, amongst other information, his interest rate and mortgage term.

Step 6: Closing day.

When the closing date arrived, all paperwork and funds were transferred between Kevin’s real estate lawyer and lender. Congratulations Kevin, you’re now a homeowner. The journey to get to this point may have taken a while, but dang, it’s worth the effort.

Mortgage Application Rejection

If yours is not the happy ending Kevin had and your mortgage application is not approved, there are several steps you can take.

• You could get a guarantor to co-sign the mortgage application. This is often done by a parent or relative.
  
• You could seek an alternative mortgage with a trust company or a private lender. These companies specialize in lending to homeseekers who cannot obtain a mortgage through a traditional lender like a bank, credit union, or mortgage broker.
  

And Kevin and his family lived happily ever after.

Well…. after they had moved in of course. Moving was hectic, but he had a tape gun and label maker. Yes, there was that one time when he lost his two-year-old in a sea of bubble wrap, but they survived, and are (mostly) living very happily ever after. The end.

REW Money