A mortgage approval consists of various steps that lead up to the approval itself, as well as steps that follow after the approval is given by the lenders.
One of the initial steps in a mortgage approval is to have a discussion with a broker to better understand the various elements that would surround your applications. This step is a sort of pre-qualification stage, where the broker would ask you various questions surrounding income, credit and down payment. This initial discussion is a starting point that allows us to understand whether there is a solution of some kind that can be work out, which would lead to a mortgage approval. If the conversation, leads us to determining that the application would likely be unsuccessful, we would still offer advice that would help guide our clients to be in a position to qualify in the appropriate amount of time.
The next step in the mortgage approval process is to take a formal application which includes more accurate details of personal information, employment information, credit information, etc. We also typically advise our clients to begin gathering supporting documents that would eventually be requested by the underwriters to support items such as income (job letter & paystubs), down payment confirmation (90 days Bank statements, etc.
Once we have a completed application, we would send it to the lenders with the best possible product offering while at the same matching the application to their respective guidelines and policies. Although the turn around time can vary, the underwriters typically take 2-3 business days to “pick up” the application and begin working on the file. At this stage of the mortgage approval process, the underwriter may ask additional questions or request other documents to support the merits of the application. Once we have satisfied these items, the underwriter would respond to us with their decision of approving or declining the applications.
It’s important to note, that since we would have pre-qualified your circumstances before even filling out an application for a mortgage approval, the odds of receiving an approval at this stage would be greater than that of a decline. Having said that, it is still possible to receive a declined decision for various reasons such as those based on unsatisfactory documentation, discrepancies in the application or the property itself is not desirable to the lender. There are other circumstances that would prevent a mortgage approval, but these are just to name a few…
Once we receive the mortgage approval, it is accompanied with a mortgage commitment which we would review, sign and send back to the underwriter within a reasonable period of time. The underwriter would once again review the mortgage application, supporting documents, etc. to ensure it is fully complete, before sending your lawyer formal mortgage instructions to prepare documents for final registration and funding (Closing)…
…And there you have it, these are basically the major steps involved in the mortgage approval process. If you have any questions or would like further clarification on the mortgage approval process, please don’t hesitate to call! 905.455.5005.