Buying your first home is a stressful process in itself. Securing financing is a paramount part of purchasing real estate for most people. Use this checklist as a general guideline to have all your documentation in order.

Remember, when purchasing residential (especially for your primary residence), the lender often emphasizes the actual property. The emphasis is on whether YOU as the BORROWER are CAPABLE of maintaining payments. The bank is protecting their asset (the loan) and YOU have to PROVE to them that you are an appropriate candidate for that loan.

This is where having the necessary and supplementary documentation (see the list below) in place is crucial to showcasing that you are a suitable applicant. After all, YOU are applying for this loan

‘A mortgage is NOT a loan on your house, it is a loan on your INCOME…… SECURED by your house.’ - Ron Caruthers

Where is the Source of the Down Payment?

✅ Bank Account Statements (typically 90days of proof with the proper format- official statements, not just screenshots)

✅ Follow-up documentation to justify any large transactions

✅ Liquid Assets- RRSP, TFSA, Non-Registered Fund statements

Supplementary Documents

✅ Net Worth Statement (assets - liabilities, but you already knew that, as you’ve been reading my blogs for a while by now…. right?)

✅ Copy of your credit report- I use Credit Karma. Yes, when a lender pulls your credit it will have a small negative temporary effect on your credit score.

✅ If you have a co-signer, please ensure you have similar documentation for that person.

**If applying as a coupe and one party has purchased a home before and the other hasn't, please have on hand property tax bills, mortgage statements, and information of any liens against the property (if applicable)

This is not an exhaustive list of documentation required. Each lender will have its own guidelines for documentation and it will be your responsibility to source those documents.

Understanding Mortgage Pre-Approval vs. Pre-Qualification

• Pre-Qualification: An initial assessment of how much you might borrow.

• Pre-Approval: A thorough evaluation of your finances, providing a conditional loan amount.

Types of Mortgages

• Fixed-Rate Mortgages: Consistent interest rates throughout the term.

• Adjustable-Rate Mortgages (ARMs): Interest rates that change based on market conditions.

• Interest-Only Mortgages: Initial payments cover only interest.

• FHA Loans (US): Government-backed loans for first-time buyers with lower credit scores.

• CMHC Insured Mortgages (Canada): For buyers with less than 20% down payment.

Loan Programs and Assistance

• First-Time Home Buyer Programs: Lower down payments and tax credits.

• Down Payment Assistance Programs: Grants or loans to aid with down payments and closing costs.

Importance of Credit Score

• Impact: Higher scores secure better interest rates and terms.

• Improvement Strategies: Ways to boost your score before applying.

Understanding Closing Costs

• What Are Closing Costs?: Fees associated with finalizing a real estate transaction. (i.e appraisal fees, title insurance, inspection fees, attorney fees).

Mortgage Insurance

• Private Mortgage Insurance (PMI) (US): Required for down payments less than 20%.

• Mortgage Loan Insurance (CMHC) (Canada): Required for similar down payments.

Practical Tips for a Smooth Application Process

• Stable Employment: Lenders prefer a consistent job history.

• Avoid Large Purchases: They can affect your debt-to-income ratio.

• Stay Organized: Keep all necessary documents accessible.

Additional Considerations for Healthcare Professionals

• Loan Forgiveness Programs: Specific to healthcare professionals.

• Income Fluctuations: Addressing periods of lower income due to residency or fellowship.

Both Emily and Robert successfully navigate the mortgage process, tailored to their employment status and country-specific requirements. By understanding the necessary documentation and preparing thoroughly, securing a mortgage becomes a smoother journey, whether you're a salaried employee or self-employed

If you're interested in learning more about getting your financial house in order and how to set up your financial life, please register for the live beginner course or the recorded beginner course.