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1. Get Pre-Approved
Getting pre-approved for a mortgage will not only give you the confidence of knowing exactly what you can spend on a home before you start looking, it will give you more bargaining power when you do find the home you would like to purchase. You will also be protected against interest rate increases while you look for your new home. Your Mortgage Specialist will answer your questions and help you determine which financing terms and options are right for you. Together, your Mortgage Specialist and I work as a team to help you find the right home and select the best financing. Your lender will look at your finances to establish the amount of mortgage you can afford. At that time, he or she will give you a written confirmation or certificate for a fixed interest rate good for a specific period of time.
Some buyers may not wish to pursue the pre-approval process until they have found the home they want to buy. However, being pre-approved for a mortgage amount makes the search for your new home much easier and less time-consuming because you have a good price range in mind and more power to negotiate with sellers.
Some of the things you will need to have with you the first time you meet with a lender are:
- Your personal information, including identification such as your driver's license
- Details on your job, including confirmation of salary in the form of a letter from your employer
- Your sources of income
- Information and details on all bank accounts, loans and other debts
- Proof of financial assets
- Source and amount of down payment and deposit
- Proof of source of funds for the closing costs (these are usually between 1.5% and 4% of the purchase price)
To obtain a NO OBLIGATION Pre-Approval Appointment with one of our highly qualified Mortgage Specialists, please contact us today at 519-925-2761.
2. Choose a Realtor
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Get referrals from your family or friends.
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Contact a local real estate office.
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Go to open houses in your area to meet some local agents.
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Check For Sale signs in neighbourhoods to get names of local agents.
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Check the Yellow Pages in the phone book.
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Search the internet
3. Find Your New Home
Before you start searching for a home, you need to think about your needs both now and in the future. Here are some things to consider:
- Size requirements. Do you need several bedrooms, more than one bathroom, space for a home office, a two-car garage?
- Special features. Do you want air conditioning, storage or hobby space, a fireplace, a swimming pool? Do you have family members with special needs? Do you want special features to save energy, inhance indoor air quality and reduce environmental impact?
- Lifestyles and stages. Do you plan to have children? Do you have teenagers who will be moving away soon? Are you close to retirement? Will you need a home that can accommodate different stages of life?
Try to buy a home that meets most of your needs for the next 5 to 10 years, or find a home that can grow and change with your needs. Discussing your needs, wants and goals for the future, with your Realtor is very important.
The next step is to determine a location that is right for you. Even if the home you choose has everything you need, the location might not be appropriate. When deciding where to live, you should consider:
- Whether you want to live in a city, a town or in the countryside
- Where you work, how easy it will be to get there and the commuting costs
- Where your children will attend school and how they will get there
- Whether you need a safe walking area or recreational facilities such as a park nearby
- How close you would like to be to family and friends
In addition to your requirements and choosing the right location, it is important to think about what style of home you would like to purchase. Are you looking for a condo or a single family detached, semi? It is essential that you make a list of your preferences and share these with your Realtor, who is there to look after your best interests.
Once you figure out what you can afford to pay for a house by obtaining a pre-qualified mortgage and made a list of requirements and preferences, you are ready to start your search.
- Keep records. Whether you work with a real estate agent or search by yourself, it’s a good idea to visit lots of different homes before choosing one. Don’t forget to consider the home’s energy rating, utility costs, property taxes and major repairs, as these will affect your monthly housing expenses. Ask to see copies of bills. You should also be ready to compromise. Chances are you won’t find a home that has everything you want.
- Check out the existing financing on the property. It may be possible to take over a favourable existing mortgage from the vendor or even obtain a vendor take back mortgage in order to help close the deal.
- Think twice. Even if a home seems perfect, go back and take a closer, more critical look at it. Visit on different days and times, chat with prospective neighbours and look beyond cosmetics.
- Energy Rating. Many houses in Canada have an Energy Rating tag that describes the energy efficiency of the house. Usually, an energy-rated house has the rating posted on a sticker on the electrical panel. The energy rating of a house is given on a 0 – 100 scale. The higher the rating, the more energy-efficient the house is — and the less it costs to operate.
4. Making An Offer
Once you have found the home you would like to purchase, you need to present the vendor with an Offer to Purchase or an Agreement of Purchase and Sale. As your home is probably your biggest investment, it would be wise to work with your real estate agent, a lawyer/notary and possibly a financial advisor in preparing your offer. Remember that the Offer to Purchase or Agreement of Purchase and Sale is a legal document and should be carefully prepared. It is important to do proper due diligence to prevent any surprises that may result in the future causing significant costs to you. Always remember BUYER BEWARE.
Any offer or agreement will typically include:
- Your legal name, the name of the vendor and the legal civic address of the property.
- The purchase price offered.
- The chattels that will be included in the purchase price (for example, window coverings, appliances). Whatever items in or around the home that you think are included in the sale should be specifically stated in your offer.
- The amount of deposit.
- The closing day (date you take possession of the home) — usually 30 to 60 days from the date of agreement. It can also be 90 days or longer. Generally, an Offer to Purchase obliges the purchaser to take possession of the house and property on a certain date. As of the closing date, the purchaser is responsible for taxes, utilities, repairs and maintenance.
- Request for a current land survey of the property.
- Date when the offer becomes null and void — that is, it is invalid.
- Any other conditions that go with the offer, including property inspection and approval of mortgage financing.
The process of making an offer, receiving a counter-offer and then revising it again is not uncommon. The whole process can seem like a roller coaster ride — exciting, but stressful. It’s all part of making the deal work best for you and the vendor.
A pre-qualified mortgage certificate is not a guarantee of being approved for the mortgage loan. Even if you have a pre-qualified mortgage certificate, you must still meet your lender during the conditional offer period to get a final mortgage approval. That is why it is important to get pre-approved for your mortgage before you make an offer to purchase and property. Pre-Approval ensures that there will be no surprises during the financing process. To ensure that the process goes smoothly, make sure you bring:
- A copy of the property listing; and
- A copy of the signed Offer to Purchase
Your lender will update/verify your financial information, and put together the information required to complete the mortgage application. Your lender may require an appraisal and/or a survey. Title insurance may also be required. Your lender will also inform you about the various types of mortgages, terms, interest rates, amortization periods and payment schedules available.
5. The Home Inspection
It is always a good idea to have the home you are buying inspected by a knowledgeable and professional home inspector. The inspector will go through the property and perform a comprehensive visual inspection to assess the condition of the house and all of its systems. When you receive the home inspection report, we will have to discuss whether the condition of the home warrants withdrawing your offer to purchase or how the required repairs may affect the sale price that was agreed upon.
A pre-delivery inspection (PDI) may be a requirement in closing the purchase of a newly built home. Be aware that pre-delivery inspections are fairly specialized and not all home inspectors have experience in this area. Note also, that some builders have policies concerning who may be present during the pre-delivery inspection so it’s best to inquire with the builder during the negotiation of the sales agreement whether or not this is possible.
6. Closing
Closing day is the day when you finally achieve your goal — you take legal possession and finally get to call the house your own. You are sure to feel great relief and satisfaction but remember that the homebuying process isn’t over just yet. There are quite a few things that need to be done on closing day:
- Your lender will provide the mortgage money to your lawyer/notary.
- You must provide the balance of the purchase price to your lawyer/notary along with the closing costs.
- Your lawyer/notary pays the vendor, registers the home in your name and gives you the deed and the keys to your new home.
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