What to do first if you want to buy a new home? Mortgage Approval
This might seem like an easy question to answer, but with the availability of the world wide web more and more people are searching on realtor.ca to find their perfect home and then with great enthusiasm calling their local agent, hopefully, me! To help them tour their perfect home and with any luck make a purchase.
With the excitement and ease of looking for a home online many though they are forgetting a very important step, which is going to the bank and finding out how much they can afford and what price range they really should be targeting – Mortgage Approval. Before you start your home search I urge my clients to go to their bank and have a serious discussion with their mortgage advisor and seriously crunch the numbers before they begin.
It is heartbreaking to work with clients that fall in love with a home only for them to find out that their credit isn’t as great as they hoped or that they don’t have enough years with their current employer to qualify for the needed mortgage approval. Some clients when having visited the bank are also surprised that maybe they could be looking at a higher price bracket than they had expected and that their job security and wages could support a larger, more expensive home that would give them a better return on investment. Therefore not going to the bank could not only find you in a position of not being able to afford your dream home, but it could also cause you to miss out on a greater return of investment with little change in your monthly mortgage payments.
forgetting to acquire a Mortgage approval before looking at a home is something Laurie and I see time and time again that clients get excited and jump prematurely into their house-hunting regime without truly knowing what they can afford. I’m happy to tour homes with you to your heart’s content, I love homes! But we want to help you make a really good decision and knowing what you can and can’t afford is going to help you make the best and most educated decision for you and your family.
Step by step:
1. Contact a mortgage lender you feel comfortable working with and set up an appointment
2. Make sure the lender you are working with really crunches true and accurate numbers for you by looking at least 2 years notices of assessments
3. Make sure the lender you are working with knows your complete financial picture. This means all the assists and liabilities you own, such as credit cards, investments, line of credits, and any outstanding debts.
4. Get up to date mortgage rates from them and a clear picture of what you can afford
5. Get a letter of commitment from them on the rates and the amount of money they will guarantee you at today’s rates
Happy house hunting!