Your lender will need a complete picture of your financial situation to help determine how much home you can afford. You and a loan officer will fill out a Loan Application, a document that asks in-depth questions about you, your income, your assets and liabilities and your credit as well as a description of the property you wish to buy. The process will go much smoother if you have everything with you when first meeting with the loan officer.

Determining your down payment
As part of the application process, you must state how much of a down payment you can make. Obviously, the bigger the down payment, the smaller the mortgage. As little as three percent down may be possible. On loans with less than 25% percent down, you will be required to purchase mortgage insurance through CMHC or GE Capital which protects lenders against losses. The cost of mortgage insurance will be reflected in either slightly higher monthly payments, or as additional fee at closing.

What you will need for the application:

• Agreement or contract of sale
  
  
• Employment history
  
  
• Income information
  
  
• Source of down payment and closing costs
  
  
• Credit information
  
  
• Real estate owned
  
  
• Application fee

There are special situations regarding self-employment, rental income and the like which require additional information. Your loan officer can tell you what else you will need. If you are in doubt, feel free to call and ask!

Application fees
Typically, lenders charge an application fee which covers the cost of a credit report, an appraisal of the property, and possibly, determining if the property is located on a floodplain.

Some lenders may not charge an application fee, but may increase the loan rate or other costs to cover these charges. It's important to have a clear understanding of the services covered by the fee and how they may be paid.