The devil is in the details; an all too familiar adage, especially when it comes to the mortgage process. A lot of people spend so much time and effort on shopping around for rates and, to some extent, certain product preferences, but the really important part of the mortgage process isn’t any of those. It is getting the paperwork, the right paperwork, and putting it all together.
Dates, names, numbers- these are all elements of a successful transaction and even the slightest inconsistency can throw a deal sideways. The last thing you want is to have your mortgage fall apart in the days leading up to your closing.
To avoid this, it starts with full disclosure and the ability to provide exact details which pertain to your application. Making sure you can meet each condition is crucial. In some cases, documents provided that are assumed to be sufficient enough to satisfy a certain condition may, in fact, not be. A good example of this would be debt payout requirements. Depending on your application, you may be required to pay off other debts, be it secured (like mortgage on another property) or unsecured like credit card, lines of credit or car loans. Note: car loans are technically considered secure but for the purposes of this example we’ll group it as an unsecured loan. Car loan payouts, however, are a particularly good example for getting the right paperwork and with enough time.
Ensuring you have completed a required car loan payout, as per your mortgage conditions, well before your mortgage closing date is important. Leaving it to the last minute may not allow for enough time for the documents to be reviewed and the payout confirmed.
For the secured loans, ie mortgages, to have payouts they are governed by the lawyers, which also takes time to complete. Brokers will be required to provide such things as purchase and sale agreements on your existing home. These documents need to be reviewed to ensure they are fully executed and initialed with proper dates and they are accompanied with the necessary waivers.
Gathering and ensuring other paperwork, like the down payment confirmation, can also seem tedious. 90 day account histories are required and they seem easy enough, but it can be a pain if you’ve gathered your down payment funds from various accounts, be it savings, investments, RSPs etc. RSP can be especially tricky because of the time it takes for those transactions to be processed, especially if you have them invested in something. The lesson here is to try and simplify your life by corralling your down payment funds into one simple account that you don’t use 10 times a day. 50 pages of down payment info can be a bit annoying; we don’t need to see all those day to day purchases from coffee shops and grocery stores.
No matter what you provide, names and account numbers need to be there. Some online banking can be tricky as your transaction summary doesn’t always show your name or account number.
The credit bureau reports that brokers obtain can also have their problems. Due to the strict protection of information, account numbers aren’t always easily discernible. This can be a problem if your payout confirmation of a debt has an account number that doesn’t quite match the credit bureau. Also, credit bureaus aren’t exactly kept up to date, at least not to the minute. It may show a balance owing that would be from a previous month or so therefore the actual balance on your credit card, loan or line of credit may be different.
These types of scenarios make it extremely difficult to ensure that the paperwork we receive from you, the client, is sufficient and we don’t always know whether it’s insufficient until the lender reviews it. The point being, having your documents submitted early can ensure ample review time and lessen the stress of having last minute snags on your mortgage closing.