Your Guide to Mortgages : BUYING A HOME? KNOW YOUR BUDGET!
-
How much you can afford to spend on a home purchase
-
What your mortgage amount and payments will be
-
Whether you can transfer or refinance your mortgage
THE MORTGAGE PROCESS
Why get pre-approved?
Get pre-approved! A pre-approved mortgage certificate is a written commitment outlining a mortgage amount with an nterest rate that is guaranteed, usually for 60 to 120 days. The commitment is made subject to a property appraisal. The service is usually free and without obligation.
A pre-approved mortgage gives you an edge. You meet with a lender (mortgage broker or bank), and go over your income records and your overall financial picture. The lender then helps you determine your home buying budget. Before you go house hunting, you will know what you can afford, the interest rate, and your monthly mortgage payments. You can then shop for the right home in your price range.
A pre-approved mortgage also helps your bargaining position when you make an Offer to Purchase. The seller knows that you are a serious qualified buyer.
Making an Offer to Purchase
When you find the right home, your next step is to make an offer. Geoff 's experience preparing the necessary paperwork helps give you an edge. Many contracts today are more than ten pages long, so attention to detail is crucial. The owner can accept your offer, make changes to your offer with a counter-offer, or reject the offer.
The Contract of Purchase and Sale
The offer is a legally binding agreement between buyer and seller. It sets out:
-
buyer's name
-
seller's name
-
address and legal description of the property
-
offer price
-
items included in the purchase price
-
deposit amount
-
financing arrangements, such as your mortgage
-
the closing, possession & adjustment dates
-
specific terms or "subject to" conditions that must be satisfied
-
a time limit for meeting these conditions
When properly prepared, this document becomes a legally binding agreement. The buyer now has time for "due diligence" to satisfy the conditions in the contract.
When your offer is accepted
When your offer is accepted, the detail work begins. Your lender will need documents and information:
-
copy of the real estate listing
-
copy of the accepted offer
-
confirmation of your down payment
Processing the mortgage application
Your lender will want to verify the value of the property you are buying, so an appraisal will be done. If your down payment is less than 25%, you would have a high ratio mortgage where insurance premiums are payable. You decide whether you want to pay the premium in cash or have your lender add it to your mortgage amount. Some of these fees are negotiable - be sure to check with Geoff for competitive quotes.
Closing the purchase
Closing day is when ownership of your new home changes hands, though the closing process usually takes a few days. Typically, you visit your notary/lawyer's office to sign mortgage and transfer documents. You'll need a certified cheque to cover the closing costs. When the transfer takes place at Land Titles Office, you become the new owner.
Congratulations... now it's moving day!
Featured listing
Email