Skip to content

Everything you need to know about a mortgage for your home purchase

Are you just starting to look at buying a home, or have you found the one you like and will be buying it soon? Buying a home is an important investment and the mortgage process related to it can quickly become confusing, whether it is your first experience or not. 

At Multi-Prêts, our brokers know everything there is to know about mortgages. We are here to help you find the right mortgage, but also to help you understand each step of the process!

What is the definition of a mortgage?

A mortgage is a legal contract between you (debtor) and a mortgagee (lender). This document sets out the terms of your loan, which is the amount of money you have borrowed to cover the remaining cost of your purchase after the down payment. 

A mortgage is a loan secured by property. If the debtor fails to pay the amount owing, the creditor has the right to reclaim the property and sell it to recover the money loaned. The mortgage contract must be renewed several times until the balance is paid in full.

What types of property can be mortgaged?

The most common type of property mortgaged is real estate, particularly because of its high cost. It can be a house, a condominium, a rental building or land, for example. 

However, other assets can be mortgaged, such as certain furniture, vehicles or very valuable goods (these must be included in the law in this regard). These are called movable mortgages with or without dispossession, depending on the situation. 

The former involves disposing of one’s property by handing it over to the creditor, while the latter allows one to keep the object with him. In both cases, the mortgage must be registered in the Register of Personal and Movable Real Rights (RPMRR).

What is the mortgage process?

The mortgage process is relatively similar whether you want a pre-approval or a mortgage approval. You must send your lender various documents and personal information so that they can review your finances and decide on the maximum amount you can borrow. 

Note that pre-approval does not guarantee that you will be approved for a mortgage and that a mortgage approval requires additional details about your job, down payment, finances and the property being purchased.

What documents do I need to provide?

Several pieces of information are required in order to structure your mortgage file for pre-approval or mortgage approval. Here are some of the documents you will be asked to provide:

  • Proof of identity;
  • Proof of employment (including details of your salary, position and date of hire, for example);
  • Proof that you have the money for the down payment and closing costs;
  • Information on your assets (car, cottage, etc.) and your debts or financial obligations (credit card balances, pensions, lines of credit, etc.).

What factors influence your mortgage record?

The amount of your mortgage is directly related to the value of the property purchased and your down payment. Each lender has its own standards for accepting or rejecting a mortgage application. A bad credit history, for example, can lead to a negative answer. 

There are a number of options that can be used to favourably influence your mortgage application and allow you to receive financing:

  • An application for a lower mortgage amount;
  • A higher interest rate;
  • A larger down payment;
  • The addition of a person as a co-signer.

you have a particular situation?

When you buy a home, there are many things to consider. In addition, there are a few special situations that may offer you additional opportunities or require adjustments to the mortgage process. See them in a little more detail below!

Buying your first home can seem like a daunting task. However, there are various solutions available to help you. For example, the First-Time Homebuyer Incentive allows you to get 5% or 10% of the purchase price of your home to add to your down payment. 

You can also use the Home Buyers’ Plan (HBP) to withdraw up to $35,000 from your RRSPs for your down payment or to pay closing or moving costs.

If you have a low credit rating, it may be more difficult for you to obtain a mortgage loan. At Multi-Prêts, we can help you, whether your credit file contains a personal bankruptcy, a high debt ratio or late payments. We take the time necessary to evaluate your file thoroughly and guide you towards possible solutions so that you can have a second chance at credit.

If you have a low credit rating, it may be more difficult for you to obtain a mortgage loan. At Multi-Prêts, we can help you, whether your credit file contains a personal bankruptcy, a high debt ratio or late payments. 

We take the time necessary to evaluate your file thoroughly and guide you towards possible solutions so that you can have a second chance at credit.

We have the right solutions for you!

Simplify your search for your dream home by knowing from the start how much you could borrow from your lender by filling out our mortgage pre-approval form!

Get your Free and personalized estimate !

Our mortgage brokers work with over 25 financial partners to get you the best offers with the best rates and conditions! All this in less than 24 hours.