How long mortgage approval takes in Nova Scotia

The timeline, stage by stage

These are working ranges from files Riley has run across the province, not statistics. A file that has everything in on day one lands at the low end. A file that is missing a T4 or waiting on a septic inspector lands at the high end or past it.

The stages overlap. The appraisal is ordered the day the offer is accepted, and underwriting starts on the income and credit side while the appraiser is still booking the visit. The critical path on almost every file is the appraisal, then whatever conditions the commitment lists.

What slows a file down in Nova Scotia

• Rural appraiser availability. HRM has enough appraisers that a visit is usually booked within days. In parts of Guysborough, Digby or Victoria counties one or two appraisers cover a wide area, and a week to get on site is not unusual. Order the appraisal the day the offer is accepted, not after the inspection.
• Well water tests. A potability sample has to be taken, sent to an accredited lab and reported. Build that into the condition period rather than discovering it in week two.
• Septic inspections. Inspector availability outside HRM is the constraint, and a failed or inconclusive result reopens the price negotiation.
• Oil tanks and insurance binders. An insurer that wants the tank replaced before it binds coverage can stall a closing on its own. Start the insurance quote the day you view the house.
• Self-employed income review. Two years of returns, financial statements and a business bank statement review take an underwriter longer than a letter of employment. Budget the full three days at pre-approval and expect follow-up questions at underwriting. Self-employed mortgages →
• Condo document review. The lender reads the estoppel certificate, reserve fund study and minutes. If the corporation is slow to produce them, so is your approval.
• Insurer review on insured files. With less than 20% down, CMHC, Sagen or Canada Guaranty reviews the file after the lender does. On a clean file it is fast; on an unusual property it is another set of questions.
• Credit union versus bank timelines. Credit unions decide locally and can be faster on a file they understand, particularly rural and seasonal income. Large banks have more layers on an exception. Neither is always quicker; it depends on the file.
• Construction. A draw mortgage needs plans, a budget, a builder contract and a cost-to-complete review before the first advance. Weeks, not days. Construction mortgages →

What speeds it up

• A real pre-approval before you shop. Income, credit and down payment already verified means the only new work after an offer is the property. How a pre-approval is done properly →
• The full document set on day one. Every follow-up request costs a day. The checklist →
• Telling us about the house early. Oil tank, wood stove, well, septic, acreage, age. Each one has a known fix if we hear about it at the viewing.
• An insurance quote in hand. The binder is a closing condition on every file; having a quote before the offer removes a late surprise.
• Answering the underwriter the same day. When a question comes back, the file goes to the bottom of the queue until it is answered.

Rate holds

A pre-approval comes with a rate hold, typically 90 to 120 days depending on the lender. It protects you if rates rise while you are shopping; if they fall, you get the lower rate at commitment. The hold is on a rate, not on an approval for a specific house; the lender still has to approve the property. If the hold lapses before you buy, the pre-approval is refreshed with updated documents.

Pre-qualification, pre-approval and commitment

These get used interchangeably and mean three different things.

• Pre-qualification is an estimate from figures you state. No documents, no credit check, no rate hold. Useful for a first conversation; worth nothing to a seller.
• Pre-approval is verified: credit pulled, income and down payment documented, the file stressed at the greater of the contract rate plus 2% and 5.25%, and a rate held. It tells you the price you can offer on with confidence.
• Commitment is the lender’s written agreement to fund a specific mortgage on a specific property, issued after the appraisal and underwriting. This is what satisfies the financing condition in your offer.

Closing timing

Once conditions are cleared, the lender sends mortgage instructions to your lawyer. In our experience the lawyer wants those instructions roughly five to seven business days before closing to prepare the mortgage, complete the title search and title insurance, and get you in to sign. A closing date set two weeks after the financing condition date is comfortable; one week is tight but done regularly; less than that needs everyone to have been told in advance.

On closing day the lender advances funds to the lawyer, who pays the seller’s lawyer, registers the deed and mortgage, and remits the deed transfer tax. Keys are usually released once registration is confirmed, which in Nova Scotia is often the afternoon of closing rather than the morning.

If your financing condition date is tomorrow

Three options, in order.

1. Ask for an extension in writing, today. Through your agent, to the seller, for the number of days the outstanding item needs. Most sellers grant a short extension over losing the deal. Say what the hold-up is; a late appraisal is easier to accept than silence.
2. Find out exactly what is outstanding. If it is a condition you control, such as an updated bank statement or an insurance binder, it can often be cleared the same day.
3. Do not waive the condition on a verbal. Waiving financing without a signed commitment turns a conditional offer into a firm one with your deposit at risk. If the commitment is not in hand, extend or walk.

Across the province

The ranges above hold from Truro to New Glasgow to Yarmouth. What changes outside HRM is the appraisal and inspection step, which is why a rural offer deserves the longer end of the condition window.