Mortgage Blog
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Top Errors Consumers Make When Applying for a Mortgage in BC
October 7, 2020
As a Mortgage Broker, what are the top errors you see when consumers are applying for a mortgage?
There are several that come to mind, but here are a few to help others to not make the same errors.
1) Clients that have not been preapproved ahead of time. There have been multiple changes to Mortgage Financing since 2010, many buyers may not have moved in the last 10 years and are unaware of the limitations the Federal Government has set.
2) Mortgage Preapprovals involve collection of Financial documentation – simply running numbers with representative is not a preapproval. Do you understand all the terms and penalties of the mortgage and costs involved?
3) The property is important, full details and disclosure matters. To secure lower mortgage rates for borrowers, many lenders are buying insured mortgage portfolio insurance, you may not pay the cost the lender does, and in these cases there is a mortgage default insurer approving your application and the house in a whole decision process.
4) Strata properties involve different rules and bylaws, these documents need to be reviewed sometimes by lenders but often by the Lawyer or Notary- do not wait until subject removal date to provide these to your lender. Ask your Realtor to supply these long before the deadline.
5) Down payments must be proven, don’t move money from one account to another when buying a home as you will need to provide a minimum of 90 day history (3 months bank statements) for all of the accounts you moved money to. If you have a Mutual fund or RRSP don’t close the account before you have all of the history as your account will not be easily accessed after it is closed out.
6) Keep your income tax information!! Documents need to be PDF format, they are saved for audit purposes by all lenders, insurers and sometimes the Government authority responsible for auditing Financial institutions.
7) You must have picture identification, it must be a valid drivers license, BC Identification card or a passport. I ask for copies for the file to have a back up in case you lose yours prior to closing as that does happen!