Home Buyer's Guide - All About Mortgages
A Step-by-Step Guide on the Home Purchase Process
What effects your credit and how to improve your credit
Understanding what you can afford and what is looked at when getting a mortgage
What is required for a down payment on a home and other solutions to obtaining the required funds
Understanding the basic Mortgage Options
A list of the costs you should be prepared for
6 Steps to the Home Purchase Process
First step in buying a home is getting Pre-Approved for a mortgage.
Fill out Credit Application
Provide requested documents
Once we have received your Credit Application and Requested Documents, we will need to review the following before providing you with your Pre-Approval.
Confirm Sufficient funds for Closing Costs and Down Payment
Meet with your Realtor
Meet with your local realtor and start looking at some homes. Then make an offer!
If you would like a referral to a great local realtor, just let us know!
If the home you are looking at is a Private Sale, we can assist you through this process
Submit to Lender
Now that you have an accepted offer on a home, we are ready to submit to the lender for Approval.
Once a lender has an opportunity to review your application they will either 'Decline' or come back with a 'Conditional Approval'.
If your loan is high-ratio (less than 20% down-payment), your application will first go to the insurer for approval (CMHC, Genworth, Canada Guaranty). They provide insurance to the lender against loss. All lenders require a certificate of approval from the insurer before they will provide you with a Conditional Approval.
This approval will include a list of conditions that must be met before recieveing the 'Final Approval'. Such as verifying your income with a job letter and recent paystub, or showing a bank statement to prove you have enough savings for your down payment. We will provide you with a detailed list stating exactly what is needed to satisfy all the conditions of your approval.
At this time, you will review all your mortgage details and once you are satisfied with the terms, we will submit for 'Final Approval'.
Appraisal (approx. 1 week to complete) $350-$550
An appraisal may be one of the conditions on your 'Conditional Approval'. You will be responsible for paying for the appraisal. The appraiser will be chosen by the lender either through an automated system or from a list of approved appraisers.
An appraisal is an unbiased professional estimation of a home's market value. Appraisals are almost always used in purchase and sale transactions and commonly used in refinance transactions. In a purchase and sale transaction, an appraisal is used to determine whether the home's contract price is appropriate given the home's condition, location and features. In a refinance, it assures the lender that it isn't handing the borrower more money than the home is worth. Lenders want to make sure that homeowners are not overborrowing for a property because the home serves as collateral for the mortgage. If the borrower should default on the mortgage and go into foreclosure, the lender will recoup the money it lent by selling the home. The appraisal helps the bank protect itself against lending more than it might be able to recover.
Once all the conditions have been met, we will recieve the 'Final Approval' from the lender. At this time you can remove the 'Subject to Financing' on your purchase contract.
Get Mortgage Approval
Here is a Step-by-Step process on getting a mortgage
Get Home Inspection
Inspectors vary in experience, ability and thoroughness, but a good inspector should examine certain components of the home you want to purchase and then produce a report covering his or her findings. The typical inspection lasts two to three hours and you should be present for the inspection to get a firsthand explanation of the inspector's findings and, if necessary, ask questions. Also, any problems the inspector uncovers will make more sense if you see them in person instead of relying solely on the snapshot photos in the report.
The inspector should note:
whether each problem is a safety issue, major defect, or minor defect
which items need replacement and which should be repaired or serviced
items that are suitable for now but that should be monitored closely
A really great inspector will even tell you about routine maintenance that should be performed, which can be a great help if you are a first-time homebuyer.
We would be happy to provide you with a list of the local Home Inspectors
Buy Home Insurance
When you have a mortgage, you are required to have home insurance. Home insurance exists to protect you, the homeowner, from the potential costs that could result from any structural damages and/or thefts. Like most insurance policies, there’s a monthly premium you’ll have to pay for your home insurance, as well as deductibles if you ever need to make a claim. Since your home is potentially your largest investment, you’ll want to protect both it and yourself.
We can give you a list of the local insurance agencies within your area or connect you with an insurance broker who can shop and find you the best options
Close at the Lawyers
Whether you’re buying, selling or refinancing your home, one of the most important people you’ll work with is your real estate lawyer or notary. No matter which process you’re going through, your lawyer’s overall responsibility is to make sure your paperwork is filed, your rights are protected and your transaction goes through. Here’s a breakdown of their other duties, and answers to some of the most frequently asked questions about working with real estate lawyers.
We can provide you with a list of the local real estate lawyers in your area