Post # 1
Tomorrow, DH and I are meeting with the bank for the 1st time. We are so excited to get pre-approved, but we are also nervous because we do have some debt… It’s not a crazy amoutn, but it isn’t an ideal one.
I just don’t know what to expect… What kind of questions they will ask…
We are first time buyers and plan on usings our RRSPs for our down payment.
We also want to find out if it’s possible to consolidate our line of credit debt into our new mortgage… I know it’s possible to do this when refinancing a mortgage, but this is our 1st one and I can’t find anything on the internet about this specific situation… I called the bank and asked and they said it’s not impossible, but they can’t promise anything; it’s case by case basis. The guys on the phone didn’t sound sure to me, so I am nervous to believe him…
We do have good credit.
Any bees with experience in this?
What can I expect at this meeting…?
I want to be prepared!
Thank you all so much for reading.
Post # 3
We got officially pre-apporved yesterday!!! Wooo yay for house hunting officially!!
These are the things we had to bring:
- last month of paystubs
- last 2 months of all bank account statements
- Any 401k/investment quarterly statements
- copy of drivers licesnses/SS cards
- last 2 years of taxes
- last 2 years of w-2s
- copy of our diplomas from college
They will check you credit there..
hmm i cant think of anything else
Just FYI: sometimes you dont get the best rate going straight thru the bank. We went through a loan broker who works in a realestate office. Also, we were told that going thru a credit union could get good rates becuase they are smaller and have more discretion when it comes to loans .
Crap just realized youre in canda so i dont know if the process if different lol
Post # 4
@Kandiss16: I think it’s the same here with the brokers… Our bank told us to only bring pay stubs for proof of income, lol. They already know our account info since we bank with them. We figured it would be a good place to start.
Are you guys going in debt free?
Any off-beat questions they asked?
And congrats! What an exciting time!
Post # 5
@Kandiss16: Why did you need to bring copies of your diplomas?
Post # 6
We had to provide the same documents as Kandiss16, except for the diplomas. I think you have to bring that if you’ve graduated within two years of applying but can’t demonstrate two years of work history (that’s what we were told at least!) But, also in the States, so not sure how different it is!
We went in with school debt. No weird questions!
Make sure you shop around for different rates. We went through a mortgage broker who offered us much lower than anything they quoted us at the bank!
Post # 7
@vorpalette: Since we went striaght from school into work, and we dont have many years in our fields, it counts as consecutive experience if we are working in the same field as your degree.
My DH was in the military and when he got out he worked as security gaurd for 2 months.. His job in military was considered a constuction job, and then after being a security gaurd he went to school for air conditioning and then went to work in air conditioning.
Since he worked as the security gaurd, it messes up his consecutive work expereince and we had to wait until he had worked for 2 years including school and actually working to get approved for a loan.
SO to answer your question lol it was to prove that we are consecutively in the same field, so tht they can judge your income accurately and know that you arent going to be jumping around to different jobs in different fields with differnt sallaries..
Post # 8
They’ll calculate your debt to income ratio and pre-approve you for an amount that they feel is within the good ratio. Ours only took a matter of minutes but we had no debt and FI banked there as well. I would say don’t consolidate yet but refinance in a year or so, but I’m not a broker so your bank may have better information. Good luck!
Post # 9
Just wanted to say good luck to you guys! We’re planning to start this process (hoping to, I should say) within the next year, so I understand your nerves!
Post # 10
@Kandiss16: Ohhhhhh gotcha! That makes sense.
Post # 11
Oh, also – preapproval means different things to different people. My pre-approval process took a couple weeks and involved sending tons of documents to the mortgage people to play with numbers, them taking credit reports, etc. At the end though, I had a rock solid pre-approval with very little room for failure. If they just run your credit report and give you a debt-to-income ratio (which is known in my area as a pre-qualificatin, NOT a pre-approval), you’re may be missing a lot and there’s a higher chance that things could change dramatically.
Post # 12
Be prepared for the home buying process even when your pre-approved its long, drawn out, and stressful. They ask for documents over and over so if you send them something keep a copy because they may ask for it again. Don’t be discouraged if you’re not pre-approved but it means more work and more stress. Bring anything you might think pertinent. If you make bonuses regularly and want to count them have your boss write a letter stating they are guaranteed bonuses otherwise they are not considered income. Know what type of loan you are looking for and how much you are willing to put down. The more you have to put down the better chance you have at getting approved. They look at all 3 credit scores for both and they do not average them. You both have to have above a certain point.
You can not add other debt into your home because the bank will determine the cost of your home if the homeowner offers you a lower bid then that is what the bank will approve you for they do not clump debt or home improvement into a loan.
As far as when you refiance you have to pay closing cost most of the time again and you only get more “money” if your house is worth more. So if you refinance and your house went from 100,000 to 150,000 then you have 50,000 dollars you can add on to your loan which you can then use for remodling or some people pay off high interest loans but it is not consolidation.
Post # 13
@O.My.Heart: Yayy for Ontario bees!! We just bought our first house in July and we are moving int his Saturday!! Woohoo!! We had my mother in law co-sign for us because my husband was not currently working at the time. Both me and her had to get a letter of employment from our workplaces as well as copies of our pay stubs. The also wanted to know where all of our deposits came from in our account over $2000 during the past 3 months and had to provide a statement of our account with the savings for the down payment (RRSP’s,wedding gifts etc) For us the process was quote easy because it was a family friend who was our mortage broker. We also entered into our mortgage with no other debt whatsoever so that made things better for us I’m sure
Post # 14
It’s been several years since I bought my house so honestly I can’t recall everything I needed, but everyone else’s advice seems sound.
One thing I would say is this: you will be pre-approved for an amount that is higher than what you probably can comfortably afford. Don’t fall into the trap of thinking “oh, the bank will give me $XXX so that’s our budget!” Know what you can comfortably afford, and stick with that number, even if your pre-approval amount is a lot higher than that.
Good luck! This is an exciting time!
Post # 15
@O.My.Heart: It helps to know what term you’re looking for. The qualifying rate is often higher than the rate you’ll actually pay, especially if you choose a variable or short fixed rate.
So many people forget about the time needed from when you contributed to your RRSP. I forget if it’s 30 or 90 days, so you’ll probably want to check into that.
Compared to what many of the US bees have said, there really isn’t too much paperwork. Bank statements (with names, we got preapproved without, but knew we needed to get new statements for the actual approval), pay stubs, etc. Nothing too crazy though.
I think you can roll your current debt in to a first mortgage, but DH and I didn’t have any going in to look into it. Depending on your downpayment you could also set up a HELOC.
Post # 16
@Kandiss16: I don’t think it has to do with working in the same field persay as it has to do with proving longevity at a job. To apply for a mortgage they usually require at least 2 years of work experience with the same company. However, depending on the profession, they may take into account years of schooling + the time actually worked at the job thereafter as one unit of work experience. So if your SO quit his current job and left for another one in the same field it does not prove longevity and his work experience would start all over at day 1!
Also certain types of debt are worse than others. Student loan debt is not considered to be as bad as credit card debt and will not affect your pre-qualifications as much.