Applying for Mortgage – Important Steps

Applying for a refinance is simple if you know the basic steps involved. It is a long term process because it consists of several steps and phases. Understanding of each step is most important to bring positive response. You can fasten the approval process with the help of certain tips. Most of the people experience problem in approval process because it is most time consuming practice. Sometime poor credit score, bank statement and other factors contribute in the rejection of application. In order to avoid from all these critical issues and problems, one can follow the steps given below.

Find a mortgage lender Usually people select lending source to get

mortgage. Now there are available thousands of lenders to serve you. If you need money, you can request a lender to provide you mortgage. People get loan for various objectives and purposes like buying a new house and construction process. Hence one can use the mortgage for any purpose corresponding to his desires. Speak with lender about your objectives in advance.

Know the mortgage requirements It is a common fact that mortgage has some

basic requirements to meet. You should ask the question about requirements in advance so that you can prepare for it well. We can expect different types of requirements by each lender but most common piece of requirements include credit score, bank statement and permanent job. The lenders offer unique parameters for mortgage approval.

Complete the application form Once you know the basic requirements of mortgage,

the next step is to complete the application form. You can request the lender to provide you application form. It is not hard to fill out the application form because it is very simple to do. It requires you to enter basic information like name, address, job, pay and identity card. You will also require attaching the necessary documents like bank statement, credit sheet and paying slip with application form. Prior to final submission of mortgage application, it is good double check the application for any kind of error.

Underwriting This process includes the verification of all

information and documents you provide to lender. The lender will review your income and expenses to estimate the debt to income ratio. In case of positive ratio, you will qualify for mortgage. The expenses should not make more than 40 % of total monthly income. The lender will confirm your source of income and other debts. This process is longest and complicated in the process.

Acceptance or rejection After underwriting the lender will accept or

reject the mortgage application on the basis of information you provide. In case of wrong information, more expenses and negative income to mortgage ratio, you will face rejection of application.

Closing cost The last step is the determination of closing

cost. The Canadian mortgage rates always affect the value of closing cost in the market. In case of high mortgage rate, you will experience more closing cost. It will definitely increase the cost of your mortgage.