Today’s blog comes from our colleague Chris Cabel. Education is a must, getting your mortgage by yourself through an online brokerage or even through your bank is so risky on many levels! Getting a mortgage used to be a sales process. All the lenders sort of offered the same thing, and rate was usually your most important factor. Today is a different story. There are more and more niche lenders, provincially regulated vs. federally regulated, policies and interpretation vary greatly. Working with a mortgage broker will definitely pay off in the long run. You will almost always save. Whether it is in the short term or long term, we tend to save our clients $1000s in unnecessary interest in fees.
Chris does a great job outlining the basics. Enjoy today’s blog 🙂
BUYING YOUR FIRST HOME? – THESE TIPS WILL SAVE YOUR LIFE
So you’re wanting to buy a new home? That is some very exciting news. First question, are you prepared?!
We all know big-item purchases are scary. It’s expensive, you are fully committing to this household – there is no turn backing without that pricey consequence. We totally get it.
The ultimate first-step is to do your research. You are going to want to find out the essentials before you start hunting for those pretty houses listed on Pinterest!
Let’s start here.
• How many credit cards do you currently have under your name?
• Do you pay your bills on time?
• How many loans do you currently have?
If you own a credit card or have a loan with an established bank, you have credit history. This information is then transferred into a financial summary known as a credit report.
Your credit report states these vital pieces of personal information (DO NOT let other people in on your personal finances. This should be a give-in by now!)
• first and last name
• home address
• social security number (SIN)
• credit cards
• how much money you owe
• whether or not you pay your bills on time
All this ‘credit’ talk is important because it allows lenders to determine IF they will lend you money. Your lender, whoever you choose to go with, will be on your credit situation right away. The sooner you know what is on your credit, the better!
As for your credit score, it’s best to only have it checked once as having multiple credit check by different lender can cause it to change. Let us know. We’d be happy to help here.
It is important to have a steady income and also proof of employment for the last two years. Any changes to your employment have to be explicitly explained. Gathering these documents a head of time can save headaches later.
In Canada, you need to show a 90-day history of the down payment to prove you have not borrowed the money. We will need to see any movement of that money within the 90 days so its best not to move it around. You are allowed to get a gift from family for the down payment but this money must not be repayable and we will need a letter from that gift giver explaining that!
Consult Your Wish List
It’s good to know what you want in a home if you can do it realistically. Buying a house for two? Thinking of expanding your family? You need to consider what life will look like down the road before you commit and sign that paper. Nothing would be worse than to move into a house that eventually ends up being too small because a couple of kids came into the picture or in a similar situation those grown-up kids come back home from college, university – you get the picture.
It’s also reasonable to think about factors in your dream home such as maintenance, renovations, the longevity of your stay, etc. Cover all bases, it is way better to be safe than sorry.
Finding a Broker
Who should you use to find the best mortgage for you? We think a Broker (like us), especially if you’re a first-time home buyer. There are many lenders in Canada and a broker will be able to sort through all your options.
Finding a Realtor
When it comes to a realtor, you want someone reliable. Makes sense right? A couple ways you can find out whether or not a certain realtor is legit is by doing some online research:
• Do they have a website/social media accounts? Go check it out!
• Double-check if their licence is registered and legitimate
• Look up their client feedback/disciplinary comments against them
• Check out their current listings – price range, are they a busy/relaxed business?
• Send them an e-mail with any questions! Do they have the appropriate knowledge?
Feeling better about buying that first Home? That’s exactly what we like to hear. If you have any other questions, call a Dominion Lending Centres mortgage professional today.