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How long does it take to cet approved for a mortgage in Canada

The process of purchasing a home can often leave you with many unanswered questions. What happens when you find a home and need your mortgage approved quickly? How long does a mortgage approval take? We will discuss some of the factors that are important when you start looking for a mortgage.

how long does it take to get approved for a mortgage canada

What is a mortgage?

A Mortgage is a loan that allows you to purchase a property. Once you find a house you like, the next step is to find a mortgage lender. In Canada, you have to make a 5%-20% down payment for any property purchase. The down payment is calculated on the purchase price, and the remaining amount can be borrowed as a mortgage.

Getting your mortgage approved step-by-step

Here are the steps involved in getting mortgage approval:

1. Gathering the information

Mortgage applications require extensive paperwork. The first step is to request a letter of employment from your manager. It would help if you also collect your tax returns, credit history, and bank statements. These are primary documents, and lenders may ask for more information depending on their requirements.

2. Mortgage pre-approval

To avoid delays in making an offer on your chosen property, you can get a mortgage pre-approval. A pre-approval allows you to understand your mortgage approval limit and affordability. You can get a quick pre-approval with these easy steps.

  • Find a lender
    Finding the right lender is just as important as finding the right property. You can shop on your own by contacting lenders or talk to a mortgage broker. Mortgage Maestro works with more than 50 lenders and can find the best mortgage solutions to meet your requirements. Don’t forget to check the interest rates, loan terms, and penalties for pre-payments.
  • Apply online
    Once you submit the requested documents to the lender, they will conduct a complete evaluation. A mortgage specialist will look 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. Some lenders also offer you an option to hold the interest rate for a short period.

3. Mortgage approval

Once you have been pre-approved by a lender, you can start house hunting with a budget in mind. When you find a house, you will need to notify your lender to begin the underwriting process. Here everything will happen in the same manner as described in the application section. The only difference is that you will receive a mortgage approval confirmation at the end, followed by your lender sending you an official commitment. The commitment document should include your interest rate, mortgage term, and more. Your mortgage broker may also ask for additional documents when they are closing the sale.

4. Closing day

The moment where mortgage disbursement becomes official is the closing date. On this day, you will have to bring the money for the closing costs (approximately 3-4 percent of the purchase price), down payment, and sign the mortgage documents. Once completed, the mortgage broker will notify the lender, and they will transfer your funds to the lawyer, who will then send it to the seller’s representative.

How long does it take to get approved for a mortgage in Canada?

Mortgage approval timelines differ based on your individual case.

  1. Rely on your real estate agent. They have been through this process multiple times and can help you out if any challenges arise.
  2. Talk to your financial advisor. They can help you understand the process and check if your credit score can get you access to the best interest rates. Don’t forget to create a list of your assets and debts to help with your mortgage application.
  3. Get a good lawyer. When it comes to investing in a property, you cannot be too careful. That’s why it is vital to find a professional you can trust.

Overall the complete process can take anywhere between 11 to 22 days. It can be shorter or longer based on your unique situation.

Mortgage Maestro can help you get your mortgage approved quickly.