Critical Steps Before You Start Your House Hunting
Prepare Your Down-payment Account:
If your down-payment comes from your own savings, ensure that the source of all large deposits is trackable and tracible. According to the Anti-Money Laundering Act, all lenders in Canada are obliged to make an enquiry and do their due diligence to ensure that the source of down-payment is legitimate and clear. As a rule of thumb, they would ask you to provide a minimum three-month history from your savings account. If there is any large deposit into your account during that period, be prepared to provide some additional documentation to prove the source of it.
- Know Your Closing Cost
Some times Closing Costs become quite challenging during the final stage of closing. The reason being is a majority of purchasers do not seek expert advice, they do not add closing costs to their total cost. Closing costs should cover the land transfer tax, title search and title insurance, legal fees and disbursement, moving cost, etc., and it is estimated to be 1.5% to 2% of the purchase price.
First time Home Buyers are eligible to receive some sort of rebate on their land transfer tax partially.
- Retain a Mortgage Broker
Do your self a huge favor and retain a well-experienced and licensed mortgage broker. Here is why you should consider a Licensed Mortgage Broker vs. using your own bank:
1. The bigger the brokerage, the better:
Typically, if your mortgage broker is a member of a big and well-known brokerage, he/she will have access to several banks and lenders. Usually, they can offer you various programs through various lenders. That alone puts you in a much better position in the market place. So, let the sky be your limit, not your bank.
2. Experience is all that matters:
A well-experienced broker not only provides you with the right advice and solutions, they know how to put your file together and how to present it to a prospective lender. That increases your chance of approval with a better rate and better product.
3. Reduce your stress and save yourselves a lot of time:
Let a mortgage broker take the stress and burden of mortgage shopping away from your shoulders. Unless you blindly trust your bank, with all those recent regulations and the number of programs and options that are out there, it would be extremely exhausting and tedious to figure them out all by yourself. At the end of the day, you do not even have the confidence of how to present your file. Apart from the amount of paperwork you have to put together and submit, you will also have a high number of meetings with the bankers. Working with a Mortgage Broker takes away all the time and effort you would otherwise need to invest, and the best part is that all services come to you at no cost!
Obtain a Mortgage Pre-Approval
As a prospective purchaser, it is wise and makes sense to look into your financing first before you start house hunting. Here is the biggest advantage of pre-planning:
- An educated decision matters:
As mentioned above, mortgage brokers are resourceful. Consulting with an experienced mortgage broker will ensure that you have a better understanding of the market, the programs, and options that are available to you. This is the best time to educate yourself on the whole process and requirements.
- Pre-Approval means confidence to win your dream house:
Going through financing early, not only determines your affordability and qualification but also ensures that you get a firm handle on your interest rate where you can lock it in for 90 to 120 days. If you do this before finding a home, you are not under any time constraints, and you can present your offer with confidence, which puts you in a strong position, particularly when you compete with the other buyers for the dream home you found!
Should you decide that you want to get pre-approved, click on “Apply Now” on our website, and a licensed mortgage professional will assist you in getting the absolute best rate and best product available to you based on your individual needs.