I love the line: "You may be richer than you think" which is used in many of Scotiabank's advertising campaigns, but seriously, it ties in with the question "What is the first step in Home Buying?"
The first thing you want to do in the event you don’t already have a mortgage broker or loan officer at your bank is to contact your Realtor for a recommendation for such person. It is important to take care of this first and foremost in order for you to know if you qualify for a mortgage and how much house you can afford. There is no sense in going out house hunting without knowing this up front, otherwise you risk looking at houses you can’t afford or looking at houses that are below the price level that you could comfortably afford, and this wastes time. On the down side you may also find out you have issues on your credit report that need a few months to correct, therefore postponing the home buying process all together. That said, most lenders are happy to work with you to resolve any obstacles that are preventing you from qualifying.
Most mortgage companies and banks make it easy for everyone by having an online application to get you started that will provide you answers within a matter of minutes. If not, you can perform the process over the phone. By providing limited information to your loan officer or mortgage broker, you can get pre-qualified. It is a good start and will allow you to hit the pavement house hunting; know that you still have more work to do providing a list of documents to substantiate that information but at least your credit score and income are sufficient to move forward with the approval process. Frankly, if you are serious about home buying and know you have a limited amount of time to get moved, then go the extra mile up front and provide all the necessary documentation required by your lender to get full approval. By doing so, not only do you know exactly how much house you can afford and what it will cost you but it puts you in a better bargaining position and allows you to move quicker once you do find your dream home. Also note, the sellers have more confidence going into the transaction knowing that you are more than halfway through the process. Barring any hiccups with the inspection, title work and appraisal reports, you are that much closer to the dream of home ownership.
This is by no means an exhaustive explanation of your first step in the home buying process, but is from a licensed Realtor’s perspective and is for informational purposes only. For complete details and current rates and fee information contact your banker or licensed mortgage broker. For further questions please contact us:
Paul Magnus or Timothy J. Burke - Sales Representatives
Coldwell Banker Terrequity Realty, Brokerage - 416-366-8800