In the first two parts we looked at some of the things you need to do once you have decided to buy a home this year. First was to decide if this really is something that you want to do. Second was to get yourself pre-qualified so that you have a starting point and a pretty good idea of your price cap.
Once you have started looking and reached the point in your decision-making process where you are fine-tuning your area, know what you want etc. then it is a pretty good time to seek a pre-approval. Note: this is not the same as being pre-qualified; it is much more detailed and will let you know exactly what you can afford.
Generally an application will be made at the lender or mortgage broker of your choice. Once finalized, you will normally have the mortgage rate that was quoted to you locked in for a specified number of days. Some of the factors that they will consider are a stable income, a good credit bureau report and net worth. If all is good, they will issue you a pre-approval letter with the amount that they will advance to you for your mortgage. It is always best to do this before you put an offer in just in case something is red flagged that needs to be addressed before you can obtain your financing. It is much better to deal with this before any negotiations start or before your offer to purchase is accepted. Please note that the property has to qualify as well! If the income is more erratic, or you are self-employed or working on commission it can get a bit more complicated and it best to have a good discussion with your mortgage specialist.
Try to keep the number of credit checks that you allow to a minimum as too many can also impact your credit score. Above all, don’t go making any major purchases on credit from the time you are pre-approved until after your closing or possession date. A lender can do a last minute credit check just before closing and you don’t want anything to negatively impact your score.
Anyone who is thinking about buying a home can easily follow the steps in First Steps, Part One and Part two, as well as this one. It is not all that complicated and it does set you on your way to finding your dream home. Whether you are buying your first home, up-sizing, down-sizing or thinking about condo living, there is a home for everyone.
Whether you are buying or selling, give Keith and Bev Beardsley a call for an honest, no pressure discussion about your options.
Keith and Bev Beardsley are sales representatives with Keller Williams Solid Rock Realty (Brokerage). They can be found at www.BeardsleyTeam.ca or contacted at 613-821-2384.