A Beginner’s Guide To Mortgages And Home Ownership
Do you plan on buying your first home or contemplate adding to your property portfolio? Availing of a mortgage has the advantages of being cost-effective as the interest rates on a mortgage are generally lower in this case than for other types of borrowing.
While it all might sound simple enough, don’t be fooled. Mortgages are not a straightforward beast. Qualifying for and closing your mortgage can be complex and stressful, and at times seemingly impossible.
To outline the steps required to pretty much guarantee you financial assistance, Mortgages By Erin has put together a Beginner’s Guide to mortgages and homeownership that will hopefully be helpful.
Getting Started
Prepare to get a mortgage: Ensuring you have the following information on hand before even considering mortgage solutions is an excellent idea as it will help determine what you qualify for and clarify which mortgage option is best for you:
a. The first thing is proof of address, your address history, and the contact information for your employer and employment history.
b. Next, ensure that you have on hand your government-issued photo ID with your current address.
C. Finally, you will need to produce proof of income, evidence proving that you can pay the down payment, and proof of savings and investments along with details of current debts and other financial obligations.
Next Step
Get pre-approved: One of the best things any potential homeowner can do when starting the home buying process is to get pre-approved. Mortgage pre-approval requires submission and verification of your financial history and can help you determine your price range, understand the monthly mortgage payment associated with that price range and provide the mortgage rate for your first term.
Note that pre-approval does not mean that a lender has thoroughly reviewed your documentation, and you may still need the approval of a mortgage insurer. That said, it does have multiple benefits, such as assuring the seller that securing financing should not be an issue.
Hire a realtor, shop around and make an offer: In today’s competitive real estate market, property acquisition without the help of a realtor can be tiresome and often frustrating. One of the reasons realtors are integral to the home buying process is because they can provide access to properties that never even make it to the MLS website. Realtors also gain access to information about homes that may come onto the market before a listing is even signed.
Once you have found the property that meets your needs, you’ll put in an offer that’ll be accepted or countered. This may go back and forth until you reach an acceptable price with the vendor.
An appraisal may also be required, which will be determined and arranged by your mortgage broker.
Lastly, you will have to send in any remaining documents required for financing, arrange a home inspection and receive the lender’s final approval letter, also referred to as a mortgage commitment.
Advice From The Pros
Avoid taking on additional debt: Applying for additional loans or financing while you are currently in the midst of finalizing a mortgage contract can drastically affect what you qualify for. Additionally, it can jeopardize your credit rating. Save big purchases, such as a new car, until after your mortgage has been finalized.
Don’t change jobs or employers: As employment is one of the most critical factors determining whether or not you qualify for mortgage financing, it is important not to change employers if you are in the middle of the approval process. You see, lenders prefer to see a long tenure with your employer as this indicates financial stability.
Avoid credit mishaps: As mortgage financing is contingent on your credit score and your current debt, keeping these things healthy during mortgage approval is crucial. Do not go over limits on your cards, lines of credit or miss any payment dates when your finances are being reviewed. This will affect whether or not the lender sees you as a responsible borrower.
Work only with trusted professionals: You may think we should remind you that when it comes to what is probably the most important purchase of your life, dealing with realtors and mortgage professionals who you trust is critical to your and your family’s long term comfort and stability. Always work with trusted and proven professionals who can guide you through the transaction from start to finish.
At Mortgages By Erin, it is my goal to exceed your expectations. As the go-to mortgage broker in Toronto, Ontario, for all your financing and mortgage needs, you can feel confident building your future with me. I have over ten years of experience, and my team and I have successfully helped hundreds of people realize their dream of homeownership.
Visit our website to learn more or contact Mortgages By Erin today.