Canada’s housing market remains hot, with low supply and ongoing demand continuing to fuel real estate across the country. In Alberta, record popular growth has turned the market into a rollercoaster ride of low supply and continued high demand, especially in urban centres like Calgary and Edmonton and their surrounding communities where it remain a competitive place to buy and sell.
If owning a home is on your financial bucket list, you need to start by finding a mortgage. And if you’re considering buying a home in Alberta, read on to better understand the steps to get a mortgage from your local Alberta credit union.
You can also check out our blog here that outlines the many different types of mortgages available in Alberta, and our blog here shares a few of the reasons why you should consider getting your mortgage from an Alberta credit union.
Your local credit union will work closely with you to get you the best mortgage for your situation and to guide them through one of the biggest and most important financial decisions you’ll ever make. The best approach is to start by speaking with a mortgage expert at a credit union near you – find one here!
Looking for a mortgage for your dream home? Below are some of the steps to consider:
1. Ask yourself – are you ready?
Before taking any big financial step, it’s crucial to assess where you’re at and determine if you really are ready. This not only means thinking about where you want to be in five to ten years – and where you want to live – but also looking at your budget to see what you realistically have available to put towards a mortgage payment. And don’t forget to factor in additional expenses that come with buying a home like closing costs, legal fees, property taxes and money for maintenance and repairs that you don’t have to worry about when you’re renting or living at home.
It’s also important to understand that what you can afford and what you may qualify for are two different things. Review your credit score and your whole financial picture (debts, savings, investments, etc.) and remember that the higher your credit score, the more likely you are to get a favorable interest rate.
And if you’re not sure you can afford to buy or will get the best deal, it might be better to focus on paying down existing debts, saving for a down payment and maintaining a healthy credit history.
2. Determine what type of mortgage you want.
There are lots of mortgage options available from credit unions across Alberta, including fixed-rate mortgages, variable-rate mortgages, and hybrid mortgages. (More information on the various types of mortgages can be found here).
Each option has its pros and cons, so you need to consider them all and be sure to select the one that aligns with your financial goals and risk tolerance. For example, a lower rate could mean more risk; whereas a fixed rate may be higher but can make monthly budgeting easier.
It is a good idea to check out multiple credit unions (find us across the province in communities large and small) in order to compare interest rates, mortgage terms and repayment options to ensure you find the best fit for your needs.
3. Get pre-approved *before* you go house hunting.
Obtaining a pre-approval is a crucial step in the mortgage process. It involves providing the necessary documentation to your selected credit union. Your financial situation will then be assessed, and the credit union determines the maximum loan amount you can qualify for.
Not only does having a pre-approval in hand indicate that you are serious as a buyer, but it can also save crucial time during negotiations. This also stops you from looking at homes that are completely out of your budget.
4. Get your documents in order and submit your application.
To complete the mortgage application process, you’ll need to gather several essential documents that typically include:
- Proof of income (pay stubs and/or an employment letter)
- Proof of assets (statements and investment records from your financial institution)
- Government-issued identification
- Copy of the purchase agreement (if applicable)
Having these documents ready will streamline the application process and speed up the steps after you submit your mortgage application.
The credit union you are applying with will review your application, verify the information and conduct a thorough assessment to determine your eligibility before letting you know if you are approved.
5. Complete the underwriting process and get approved.
After you submit your application, the credit union will initiate the underwriting process.
Underwriting involves a comprehensive evaluation of your financial profile, credit history and the property’s appraisal. The underwriter will verify the information provided and ensure it meets the credit union’s mortgage requirements.
Once this process is complete, you will receive a mortgage approval (or denial), typically subject to conditions such as a time limit (among others).
6. Close the deal.
Assuming your mortgage application is approved, the next step is to work with your lender and lawyer/other legal professional(s) to finalize the home sale and closing process.
This typically involves signing the mortgage documents, transferring the funds and registering the mortgage with the land title office for your area.
It is crucial to review the terms and conditions of the mortgage before signing to ensure you fully understand your obligations as a borrower, as there can be terms related to the length of the mortgage, repayment details, penalties related to making extra payments and fees charged if you miss a payment, and so on.
When it is time for you to get a mortgage, nothing can replace talking to an expert who knows the steps to get a mortgage and buying a home in your community – find a credit union near you here.