Mortgage process Glossary

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Kelleway Mortgage Architects

PreApproval
Conditional Approval
UnConditional Approval
Closing Date
Approval/PreApproval Expiry Date
Maturity Date
Conveyancer
 
 
Below are some of the most common terms that may come up during the mortgage application process. Please contact Kelleway Mortgage Architects for any further clarifications.
 
PreApproval
A PreApproval is a rate hold agreement by the lender, where they will lend on a certain amount based on the borrower's disclosed income, assets, and liabilities.PreApprovals should be obtained in advance prior to shopping for a property.It is highly advised that if you are planning on purchasing in the near future, you should lock-in a rate just in case rates go up.Please note that some lender policies and products may not allow for PreApprovals.Instead, you will need a live deal (you found a property and have entered into a contracted agreement to purchase it).
 
NOTE:  A PreApproval by itself does NOT guarantee mortgage financing.The PreApproval qualifies you, the borrower.The lender will need to qualify the property once a property is found.At this time, you will have to convert your PreApproval into an Approval.
 
Conditional Approval
A Conditional Approval is a commitment by the lender to provide mortgage financing PROVIDED that certain conditions are fulfilled.These conditions require you to provide documentation to verify that the information in your mortgage application is correct.
Some example of documentation that may be required (depending on the client file and situation):
 
  -  Income confirmation
                    NOA's, T4's, Employment Letters, Recent Pay statements, etc.
 
  -  Downpayment confirmation
                    Bank Statements, RRSP Statements, Gift Letters, etc.
 
  -  Property related documents
                    Purchase Agreements, MLS Detail Sheets, etc.
 
  -  Other documents to verify information on the mortgage application
                    Current Mortgage statements, Separation Agreements, etc.
 
Unconditional Approval
An Unconditional Approval, is a commitment by the lender to provide financing.This occurs once all the conditions stated in a Conditional Approval have been satisfied.  At this point, the lender will start on the paperwork required to finance your mortgage.This includes sending instructions to the branch/solicitor where you will sign documents.
 
Closing Date
Also known as the "Funding/Completion Date". This is the day when the funds are required to be transferred to the borrower. Not to be confused with "Expiry Date".
 
Approval/PreApproval Expiry Date
This is the date by which the terms offered by the Approval/PreApproval expire. If required, borrowers can usually request an extension from the broker so as not to let the mortgage deal collapse. Extensions are more common for Refinances compared to Purchases as an extension to a purchase would require the consent of both the buyers and the sellers. Not to be confused with "Closing Date".

Maturity Date
This is the date when the borrower's current mortgage term ends. At this point, one will have to either repay the remaining principal in full or roll-over their mortgage for another term. Borrowers can also port over their mortgages at no penalty to other lenders at this time. Porting over a mortgage prior to its maturity, while possible, comes at a price as lenders usually subject clients to certain penalties. These penalties vary from lender to lender and can be found on the mortgage contract.
 
Conveyancer
A professional who assists in the legal transfer of property from one entity to another. In BC, conveyances are done by qualified lawyers and notaries. Note that the conveyancer represents the lender in the transaction and represents their best interests, despite the fact that you may choose who you would want to work with.

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