One of the most common questions we receive after a mortgage application has been submitted is, “how long will the approval process take?”
When it comes to how long it will take a receive an answer on the mortgage application, the following factors play a role:
- The standard timeline that particular lender uses to process a mortgage application
- The type of mortgage being applied for and the property you are seeking financing for
- The application and documentation you have submitted to the lender
The timeline to get an approval can be anywhere from a few hours to a few days if the mortgage application and documentation is in order.
The last thing you want to do is to find your dream home and then have to worry about getting your mortgage application approved. This is why getting a mortgage pre-approval before you start your house hunting is so important, so all of the hiccups and speed bumps during the application process are handled well in advance of you purchasing a home.
Few of us have the money to go out and buy a house without some sort of financing, so most people will need to get a mortgage. Getting pre-approved for a mortgage is the best way to find out the absolute maximum amount you can afford for a home. No one should have to tell you that taking out the maximum is not a good idea, but it does give you a good idea of what you can and cannot afford.
Pre-approval involves some simple calculations that figure out the ratio between how much you earn and how much debt you will have with a mortgage on the property. Once a lender knows that you can manage the debt easily with what you earn, they will supply you a letter of pre-approval, which normally guarantees an interest rate for 60 to 120 days.
No one likes to wait to find out whether they have approval, but you can speed up the process by getting your paperwork together for the application. Here are some of the basics you should bring with you when
you are making application:
Photo identification – law requires this to protect your identity and privacy.
Proof of Income – if you have an employer, bring along your most recent T-4 slip or income tax return. You can also get a letter from your employer on letterhead that states how long you have worked for them and your salary. If you are self-employed you will need to bring the income tax returns and your business’ financial statements for the past two years.
Proof of Assets – if you have GICs, stocks, bonds, other properties or vehicles, bring along the paperwork that shows their current value.
Proof of Liabilities – the lender will want to see how much you owe to credit card companies, on loans, lines of credit and any other monthly obligation you may have such as child support and alimony.
Account Numbers – you will need to record the account numbers of any investments and bank accounts that you are part of your assets.
Proof of Down Payment – if you are getting money from a family member as a gift, you will need a letter from the gift-giver stating the money is not a loan and repayment is not required.
Lawyer Information – if you don’t have one, you will need one. Ask your realtor or family for a recommendation and bring their name, address, and telephone number with you.
Providing all this information at the time of application will certainly save you the time and frustration of going back and forth between lenders many times. With all the documentation in place it may only take a few hours, but typically you can expect an answer in 24 to 48 hours. Naturally, this depends on who you are working with for the pre-approval. Certified mortgage professionals know the procedure well and are there for you, unlike many of the major banks who are just out for a profit. Book an appointment today and start the buying process the proper way.
Have a question about the mortgage application process and how to get a quick approval for your mortgage? Contact us today and speak to one of our mortgage professionals.