Applying For Your First Mortgage In Alberta? Read First!
It’s always helpful to know what to expect before stepping into a new situation, and applying for a mortgage is no exception. Mortgages can feel especially daunting, so let’s take a quick look at what to expect and what you should bring to make the process as smooth as possible.
→ Choose Your Professional
Your home is likely one of the largest purchases you’ll ever make, so it’s important to have the right person guiding you. Referrals from your Realtor, home builder, or other professionals are a great place to start—don’t forget to ask friends and family, too. Here are a few things to consider when choosing a mortgage professional:
- Can they clearly explain all aspects of the mortgage? (There’s way more to a mortgage than just the rate!)
- Do they respond to you in a timely manner?
- Are they friendly and professional?
→ Gather Your Paperwork
You’ll need to provide all the required documentation at some point, so you may as well get ahead of it. Having everything ready will allow your mortgage professional to give you a solid pre-approval and help you avoid potential issues. Keep in mind that us brokers must have all the required documents before we can issue a pre-approval or submit your file to lenders.
Documents you may need:
- Letter(s) of Employment
- Recent Pay Stub(s)
- Most recent two years of Notice of Assessments from the CRA
- Most recent two years of T4(s)
- 90-day history of any and all accounts being used for the down payment
- Void Cheque
- Two pieces of Government-Issued ID
If you’re self-employed, you’ll also need:
- Most recent two years of T1 Generals
- Most recent two years of Financial Statements
Additional documentation you may need, depending on your situation:
- Divorce/Separation Agreement
- CCB Statements
- Bankruptcy Discharge Documents
- Proof of debts/collections paid
- Proof of taxes paid
- Mortgage Statement and Offer to Purchase on your current home
- Lease agreements, mortgage statements, and property tax bills for any rental properties
It’s worth noting that lenders will ask for all of the above and possibly more. If you were lending someone $300,000, you’d want to make sure all the T’s were crossed, too!
→ Apply
Now it’s time to complete your application. This is usually done online. You’ll be asked a series of questions, and your credit will be pulled. Here’s what lenders typically look for on your credit report:
- At least two trade lines (e.g., credit card, line of credit, car loan) reporting for two years
- No late payments
- Credit usage below 50% of your available limit
- A reasonable number of credit inquiries
Quick tip: Credit cards and mortgages both report to your credit bureau, so make sure they’re paid on time every month!
→ Learn the Basic Terms
With so much information available these days, it’s easier than ever to familiarize yourself with mortgage lingo. I’ve created a document to help you get started. Since you’re signing a binding contract for 1–10 years, spending an hour upfront to understand the terms is a smart move. Plus, your mortgage professional will appreciate your questions—so don’t be afraid to ask!
And there you have it—what to expect from the mortgage process. Not so scary after all, right?