Mortgages Canada

Mortgage Underwriting

Mortgage underwriting is the process that determines whether you will get a mortgage. There are many stages of underwriting and many factors that affect it. This article will teach you what lenders look at and some tips that will help you get through mortgage underwriting.

Underwriting Step 1: Information Verification

Due to the number of people making false claims on their applications, most lenders need to verify information you provide. This includes:

• Calling your employer
• Checkingyour current property status
• Analyzing Credit Score

It is in your best interest to include valid information, since false claims may go on the record, making it harder in the long run. If you get declined, shop a couple more lenders, search online.

Underwriting Step 2: Appraisal

Lenders want to know that the property being bought is worth the asking price. Independent appraiser will look at the property, estimate the value and report back to the lender. This is done ensure property is in the condition to be sold at a later date, estimate future pricing and to prevent mortgage fraud. As funny as it sounds, a number of people scammed TD Bank for millions by buying parking spaces, disguised as condos.

Underwriting Step 3: Title Search

Title refers to the ownership. Lenders want to know they’re lending money on a property that does not have any other owners. This includes relatives, spouse, kids etc., as it can cause problems in the future. Image a relative showing up, saying: “I own this place.” Not a good situation, hence lenders back themselves up.

Underwriting Step 4: Flood Certification

What if the lake strikes? An Ocean? Property will be damaged. If your area poses risk of being flooded, lenders will require Flood Insurance.

Underwriting Step 5: Home inspection

In this mortgage underwriting stage independent inspectors look at structural integrity, base, foundation, walls, mechanics, plumbing, electricity. It may be necessary to repair your house to get the mortgage. If lenders find a flaw they are less likely to give you the mortgage. Home inspection is billed to the borrower and is around $300-600

Mortgage Underwriting Tips

To ensure you stand the best chance of getting through mortgage underwriting, try a couple of tips:

• Give lenders complete documentation
• Answer quickly to all the requests
• Check regularly, ask on the status of the underwriting
• State the truth on mortgage application
• Keep all the record of conversations to insure yourself, just in case

Good luck in your mortgage underwriting process.

How do big banks affect mortgage market?

This Video explains how big financial institutions can affect real estate markets. It will give you a better understanding of the overall mortgage industry and what powers dictate the rules.

Subjects covered:

• Lenders expand minimum requirements, allowing more people to buy homes
• Lenders expand guidelines even more, since previous expansion was successful
• Lenders expand once again
• Last group that was allowed to get mortgages does not perform well
• Lenders tighten minimum requirements.
• When time to refinance comes, people are left with no choices, since the guidelines were cut.
• Lenders tighten the minimum requirements even more
• More people are left with less affordable mortgages

Mortgage Paperwork.

If you’re getting a new mortgage, refinancing, consolidating debt or cashing out equity out of you home, lenders and mortgage brokers will need a lot of information, which means paperwork, to both sides. Here we go over some mortgage paperwork and explain what you will need and what are the best answers to put on your mortgage paperwork.

Paperwork Needed for Mortgage

Lenders will need to know a lot about you. They want to make sure that you will be able to repay the debt you want to borrow. As a part of the mortgage paperwork they will need:

Current Debts

> How much do you owe at the moment?
> How many credit cards/lines do you have?
> What is the amount owed on those credit cards/lines?
> Do you have a car? How much a month do you pay for car?
> Any other loans? Business related, etc.?
> How much income do those debts consume? How much money you have left each month?

Mortgage Loan Down Payment

How much can you put down?
Where do you get the money? Savings? Credit? Gifts? etc

Income Paper Work

> What is your profession? Where do you work at the moment?
> How much do you get paid yearly?
> What type of income do you have? Hourly, salary, commission, contracts, business?
> How long have you been at you job?
> How stable is your job? What are the factors that affect its stability

Your Assets

> How much have you saved?
> What do you currently own? Car, house, business, etc.
> Do you have any existing equity?
> How much will you have left after the down payment?

Mortgage Related Paperwork and Purpose

> Why do you need a mortgage?
> Refinance? New home? Debt consolidation? Reverse?
> What are you going to do with the money when you get it?

Type of Home and It’s Use

> Are you going to buy a house?
> Townhouse?
> Condo?
> Are you going to live there on regular basis?
> Are you investing?
> How many people are going to live on your property?
> Can they be liable?

Answers to Put on Paper When Applying for a Mortgage Loan

Some of the responses that will increase your chances of getting a mortgage when filling out mortgage paperwork / online application.

> Loan is for the purpose of buying property, to live in it.
> Refinancing existing mortgage.
> Good credit. Past payments on time on all credit cards/lines, previous mortgages(if any).
> Steady income and steady employment.
> Low Debt. High balance on credit cards, no recent major investments(car).
> Worked with the same employer for 3 or more years. Accountable income that can be traced.
> Low debt to income ratio, 30 – 35%. (amount of income that goes towards debt each month)
> Substantial down payment. At least 5% of your own money.

Mortgage Paperwork Answers That May Decrease Your Chances or Prolong the Process

> High Debt. Low balance on credit cards. High outstanding debts on other assets, such as a car, business related debt, etc.
> No money for down payment.
> No money left after down payment.
> Self employed, commission. Cannot show traceable income.
> Property not to be used as a primary residence.

Those are the basics of mortgage paperwork that will help you in your application and mortgage pre-approval process. If for some of the factors you cannot present desirable answer, some lenders may refuse the mortgage.

Shop a number of lenders online, there are smaller firms that specialize in different mortgages, such as bad credit, self employed, low down payment etc.

Give us a try as well, we will be happy to look at your application. Click Here

Mortgage News

How would a U.S. recession impact Canadians? - CTV News

The saying goes that when the United States sneezes Canada gets a cold.
Amid concerns our southern neighbour’s economy is headed for disaster, Canadians are becoming increasingly worried about their own financial health. A recent Strategic Counsel poll conducted for CTV and The Globe and Mail found that 12 per cent of Canadians feel the economy is the most important issue facing the country, up 3 points from a July 12-15 survey.

The question is: If the United States sneezes — will Canada will take to bed with bronchitis?

Keeping watch on the North American financial markets ahead of economic plan from George Bush - News 1130

VANCOUVER (NEWS1130) - Investors across North America are being told to stay calm this morning, ahead of an emergency economic plan from U.S. President George Bush. The failing U.S. economy is being blamed for a major slide on markets across the planet.From the Dow Jones in New York, to the Nikkei in Tokyo, world markets have taken a beating over the past three days. Here in Canada, the TSX lost nearly 1,000 points, which is the equivalent of hundreds of billions of dollars.

Canadian investors join banking sector bailout rush out of the US markets - Financial News

Canada’s Caisse de dépôt et placement du Québec, which manages assets for 25 pension plans, insurance plans and other depositors, and the Ontario Municipal Employees Retirement System, have agreed to inject emergency funding into a Canadian bank hit by the US sub-prime mortgage meltdown.Canadian Imperial Bank of Commerce, Canada’s fifth largest bank, is seeking to raise about C$2.75bn (€1.8bn) in newly issued common equity to cover writedowns tied to US mortgages.

U.S. economy teeters on the brink - Globe and Mail

WASHINGTON — In a bid to save the world’s largest economy from recession, U.S. President George W. Bush and central bank chief Ben Bernanke yesterday endorsed a $100-billion stimulus package as the spreading housing mess continued to hammer banks, consumers and investors. The rare plug for fiscal action comes as a growing number of economists say the United States is either in recession or perilously close to it. “The United States has now effectively entered into a serious and painful recession,” said economist Nouriel Roubini of New York University.

Real Estate News

Selling Parking Lots as Condos (continued) - ‘Condo’ buyers duped into a lot of woe, detectives say - Globe and Mail

No down payment, security deposit, paperwork or monthly mortgage payments - we’ll take care of all that - and in a year or two, we’ll help you flip that nice condominium and you’ll walk away with a fat profit. Sign here.
So they did sign, in all, 17 times, so confident in the sales pitch they didn’t even bother to inspect the goods. Instead, they were steered toward Multiple Listing Service ads boasting of fireplaces, hardwood floors and ceramic tile. Original Article.

Toronto, New-housing market may soften considerably - Globe and Mail

Many municipalities in the GTA are close to being built out in terms of greenfield land because of the provincial government’s desire to limit expansion of municipal boundaries and encourage intensification. Slowly, developers have come to grips with these land-conservation measures after railing against them initially. Brownfield and infill redevelopment is becoming more prevalent, as are projects that are smaller in scale than previously.

BC. Area’s infrastructure boom hits $434 million - Times Colonist

Massive infrastructure projects are going to help keep the province’s non-residential construction industry booming for years, says the president of the B.C. Construction Association. "Our existing infrastructure is wearing out — needing updating, needing maintenance — and we need actual new infrastructure, whether it is roads, buildings and utilities," Manley McLachlan said.

Toronto Real Estate Board - A bright start to the New Year - Real Estate Intelligence

The first half of January saw 1,776 resale homes in the Greater Toronto Area change hands, an 11% increase over the same period a year ago Toronto Real Estate Board President Maureen O’Neill announced today. "This early indication certainly gives us reason to be optimistic about the 2008 resale housing market," said Ms. O’Neill. "We are still looking forward to a strong, steady year ahead. Toronto’s land transfer tax will come into effect on February 1, so we are watching this issue."

Real Estate In Victoria BC - The Roundhouse Project - Real Estate Info

The Roundhouse development could be a first for Victoria, with a working rail line and the historic buildings associated with it the centrepiece of a billion-dollar revamping of the Vic West site. If the plan is approved, the 4.25-hectare site just off Esquimalt Road at Catherine Street would become a mixed-use community of about 500 condos, a hotel, live-work studios, a food market, artisan studios and gallery, community space, public plaza, walkways, restaurant, brew pub and retail.“These are very early ideas, but they show the range of things we are talking about,” said Norm Hotson, the architect who is working with developer Ken Mariash on the project.

Update on the Edmonton Real Estate Market - Edmonton Real Estate Blog

- New listings: 601 (562)
- Sales: 228 (170)
- Ratio: 38% (30%)
- Price changes: 242 (235)
- Expired Listings: 151 (136)
- Canceled, withdrawn and terminated listings: 53 (82)
- Net loss/gain in listings this week: 169 (174)
- Active listings for single family homes: 2625 (2584)
- Active listings for condos: 1928 (1817)

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