12-Step Program

1 Pre-approval Potential homebuyers should get

mortgage pre-approval before they begin looking

for a home. When meeting with your mortgage

consultant, it's crucial to supply as much information as

accurately as possible. You will need to bring the

following documents with you:

? completed and signed mortgage application

? confirmation of your earnings (job letter, tax returns)

? confirmation of your down payment

Your credit score will also be checked and

pre-approval is subject to the maintenance of your score.

To approve a mortgage, the lender may ask you to put

more money down to improve the Gross Debt Service

or Total Debt Service ratio.

2 Home Buying Preparation After pre-approval, you'll

know the price range you can afford. Make a list of

the most important factors you want in your new

home.

3 The Hunt At this point, start looking at properties in

the areas you'd like to live and search for a home that

has your desired features.

4 Making an Offer If you've decided on the right home,

determine how much you want to offer for it.

Generally, your offer is conditional upon financing and

home inspection. This will allow you to obtain final

mortgage approval and to ensure there are no major

problems with the home.

5 Mortgage Insurance High-ratio mortgages, where

borrowers put down less than 25 per cent of a

mortgage, will require mortgage insurance.

6 Documentation Paperwork supporting the

mortgage application must be submitted. You will be required to provide the following documents:

? copy of the accepted Offer To Purchase

? copy of the Multiple Listing Service

? if purchasing a condominium, a copy of the financial

statements for the condominium corporation

7 Home Inspection A home inspector will check

all major parts of the home, including the

interior, exterior, roof, structure, electricity,

heating, cooling, insulation, and plumbing to ensure

that everything is fundamentally sound.

8 Appraisal Lenders usually require an appraisal on a

home purchase. You may need a larger down payment

if the property appraises for less than the purchase

price.

9 Underwriter's Review and Mortgage Approval The

underwriter verifies that all conditions have been met

and issues the final mortgage approval. Lenders

require fire insurance on the replacement value of

the home.

10 Title Search This is the time when any liens

against the property are discovered. A lien

may have been placed on a property to ensure

payment of outstanding debts by the owner. All

liens must be cleared before a transaction can

be completed.

11 Final Document Review Before the closing date,

you will meet with your lawyer to review all details.

At this time, you will also be provided with an

estimate of the closing costs so that you can prepare

your certified cheque, made in trust to the lawyer.

This amount will cover the balance of the down

payment, closing costs, and adjustments.

12 Closing Day The lender will provide your lawyer

with the agreed-upon mortgage funds to close the

transaction. Your lawyer will register the property

and the mortgage in your name and obtain the keys

and the deed for you. Congratulations-you are

now a new homeowner!

Jeff Hui is a consultant with Mercury Mortgages.

He can be contacted at jeff@mercurymortgages.com or

905-273-4234.