Buying a home is one of the biggest financial investments that anyone will have to make when they hit the property buying age which is 25-40 years, not just here in Canada, but anywhere you may be on the globe. However, not many of us are actually aware of the rudiments of the Toronto mortgage loan processing. Awareness and understanding of this phase are vital for us to know because it will be helpful to us and prepare us somehow to take on the responsibility entailed in property ownership, regardless if it is a commercial or residential type. And since there is a manifold of available mortgage options in the market today, a first time homebuyer will feel confused and challenged by which option he should take, most especially when they realized that they are faced with the prospect of decades-long commitment and thousands of dollars of hard-earned money is at stake which necessitates them to make wise and well-thought of decision. This is the only way they can ensure to get the value for their money.
When it comes to a mortgage loan processing in Toronto, the steps would be generally just the same, although we can’t get away with the fact that some private lenders may have a special or unique process of their own. Here are basic steps in processing a loan mortgage:
Applying for a Mortgage
You will be asked to fill out an application form for loan mortgage the moment that you have found a suitable private loan provider and decided that you will consider availing his offered loan arrangement. Nowadays, this part of the process can be done online. Soon after you have filled out all information and personal details being asked of you (you do that as openly and truthfully as possible), you have to hand it over to your mortgage processor.
After submitting your loan application, anticipate that the mortgage processor will immediately reach out to you and may require you to furnish them a copy of a number of important documents. These may include your income tax returns, recent bank statements, paystubs, and among others. All pertinent paperwork can be sent via mail, which may inadvertently cause some amount of delay in the process.
Document Verification Phase
The moment that a designated loan processor received the pertinent document he is requesting from a mortgage applicant, the loan processing stage will immediately commence. The documents being submitted to them will undergo a rigid verification process. So there is no point of defrauding them as they will have a way of knowing the authenticity of the information you have provided. One of the most commonly used techniques for verification part is giving your landlord, bank, employer or any other contact people you have indicated and feature in your submitted documents, a ring.
Once your submitted documents passed and cleared this pre-approval phase, they will submit to the lender himself. This will initiate the appraisal processing and title report part which will normally take about an average of 14 days to validate your submitted documentation.
Underwriting the Loan Application
This is the approval stage, and in here the underwriters are tasked to make another round of validation on your submitted documents. It is also at this stage that their underwriters may request for your credit reports so as to help them ascertain if you creditworthiness or not. Title search report and appraisals receive approval at this stage, too.
The underwriters, however, practice full discretion on whether or not they will deem a borrower profile as credit-worthy or not, and thus they have the power to reject or approve a particular loan application based on their careful review of a submitted borrower profile. On the other hand, accepted loan applications would find its way back to the loan processor but this time around a pre-closing statement is included. If there are any declined or denied files, the loan processor and officer will have to carefully review them once again, and see if there is any possible way that they can help the loan applicant.
Closing Stage
If the underwriting and the underwriting departments are completely happy and satisfied with your submitted requirements and file, your loan application status will immediately enter the closing stage. It will be initiated by the loan officer with high observance on the conditions as the underwriter has stipulated. In a short time, the lender will provide you with the loan commitment, and this will help you both set the date of the actual closing date of the loan.
In making this kind of decision, I highly recommend that you make a relevant consultation with the property seller and lender. Before closing becomes formal, it would be wise that you carefully review also the Good Faith Estimate statement and compare it what you have on the Settlement Statement document. The outline of charges that you should see on both documents should be one and the same, and if you will need further assistance on this and other details for your Toronto mortgage loan you can always reach out to a distinguished mortgage broker from Toronto.
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