First Time Home Buyer
-
When buying your first home you probably have a lot of questions. Will I be able to get a loan? How much of a house can I afford? How much will my payments be? Don't be intimidated — let me help you make the process less stressful. I want to help you be comfortable with the whole process from beginning to end. To start, my advice is for you to get pre-qualified for a loan. What that means is that after collecting and analyzing your information, I will be able to determine if you can get a loan and what it's projected amount will be. Knowing exactly how much you can afford to spend, will give you a peace of mind and save you valuable time, while looking for a house of your dreams.
First Time Home Buyer typical questions:
How much do I need to have saved for the down payment?
First time home buyers can put as little as 5% down. Also don't forget about the RRSP Home Buyers' Plan. It can be all or part of your down payment. The rules have changed in recent years, give me a call if you would like to find out how this process works. Don't have any money saved for the downpayment? There are programs available that will allow you to put 0% down, call me for more details.
How can a mortgage broker help me?
If you are a first time home buyer, it is a good idea to get pre-approved for a mortgage. After evaluating your situation, I will take your mortgage application and submit it to a selected lender for a pre-approval. Since collecting all the information for a pre-approval is done over the phone, it is very important that the clients provide their mortgage broker with accurate information in regards to their employment, income, savings, etc. since your application will need to be backed up by supporting documentation and it will be checked by the lender when you place an offer to buy a house. Typically within 1 business day I will receive a reply from a lender in regards to your application. If your application has been accepted, the lender will provide you with a mortgage commitment stating the amount for a mortgage you have been pre-approved for. This number will give you an idea what home price range you cannot exceed, so that you don't waste time looking at houses you cannot afford. The lender will lock in your mortgage rate and hold it for up to 120 days. This will give you a lot of time to find your dream home! The lender will also state a list of documents they need to receive from the client to support the application, such as income tax returns, pay stubs, employments letters, bank statements, etc. I always advise my clients to collect all the necessary documents for me as soon as possible to so that we are assured that we have the papers well before you find the house. If you are currently renting and would like to compare your rent payments to your future mortgage payments, I will be able to provide you with this information. Now you are all set to start looking for a home of your dreams!
I have no downpayment saved. Can I still get a mortgage?
Currently, several banks and lending institutions offer free downpayment mortgage. That means that if you have no downpayment saved, the bank will provide the 5% of the downpayment on your behalf. To be approved for this mortgage, buyers need to demostrate solid credit (no minimum monthly payments missed on their current credit cards for the past 2 year;, and job stability for about 1 year on the same job or in the same line of business.
The plus side of going with zero down is that your dream of ownership can come true without worrying about the downpayment. The negative one is right now you will only have a option of a 5 year closed mortgage at typically higher interest rate. Nevertheless, zero down mortgages are extremely popular these days!
Pre-approval gives you:
-
A peace of mind that you will be able to get a mortgage:
-
at this stage, it is important that you give your broker all the supporting documents well in advance, so that there are no surprises for you in the future in case if the information in your papers is different from what is reflected in the mortgage pre-approval application
Your pre-approval rate is guaranteed for you for this period of time and will not increase if the rates go up. If the rates go down, you will receive the lowest rate.
You will know your house hunting price range.
-
I got pre-approved, what should I do next?
Submit all the supporting documentation to your broker, and if the broker does not find any problems with the papers, you can start looking for a house. After your offer to purchase has been accepted, contact me and let me take care of the rest. The biggest mistakes clients make is to assume that since they got pre-approved, they can send the broker all the supporting documents (the list will be provided to you by the lender) after they place an offer to purchase. In this case if, for instance, their employment letter does not support the amount of annual income stated in the mortgage application for a pre-approval, they may not qualify for the mortgage loan amount they have been pre-approved for. Same goes for the downpayment. That is why it is VERY important that you collect all the documents well in advance.
How can I get pre-approved?
The process is very simple. You can submit a quick application form available on this site, providing me with your basic contact information and the best time to call you. You can also call me directly at (403) 274-0444 or e-mail me at lena_larsen@calgarybestmortgage.com I am available most evenings and weekends, so feel free to call me at the time convenient for you.
-
What does a pre-approval mean?
Pre-approval means that the lender agrees to finance your future home purchase considering that the information you provided in your mortgage application is true and supported by the documents that you are going to provide. The lender will determine the maximum loan amount and lock in the rate. Please note that a mortgage pre-approval becomes an actual mortgage approval only if the lender finds all the supporting documents satisfactory. To make your pre-approval strong, provide all the documents to your broker as soon as possible.
What documents do I need to give my mortgage broker for pre-approval?
The broker will notify you what papers need to be presented to the lender to support the pre-approval. Typically the list includes:
1. Employment Letter (This document has to be written on your company's letterhead stating your name, how long you have been with them, your position and annual income.)
2. Recent pay stubs
3. Tax returns (for self-employed individuals for 3 previous years).
4. Confirmation of the downpayment (bank statements for the past 3 months)
The bank or a trust company may also request additional information that you will be notified about by your broker.
- How can you use your RRSP to help you buy your first home?
First time home buyers can use their RRSP savings as their downpayment. With the federal government's Home Buyers' Plan, you can use up to $20,000 in RRSP savings ($40,000 for a couple) to help pay for your down payment on your first home. You then have 15 years to repay your RRSP. To qualify, the RRSP funds you're using must be on deposit for at least 90 days. You'll also need a signed agreement to buy a qualifying home.
For more information, visit Canada Customs & Revenue Agency Web site . -
-
I already own a home, and my mortgage is up for renewal. Unfortunately my bank is not very willing to give me a lower rate. Can I also get pre-approved with a different lender to receive a better rate?
Absolutely! What I can do for you is to submit a switch mortgage application to a different lender that offers a better rate and hold the rate up to 120 days depending on the lender. After all you will already be guaranteed a lower rate that will not go up, and if the rates go down, you will get the lowest for the time. This will save you thousands of dollars in interest! Do you have more questions? Contact me!
-
| |
 |
| |
|
|
|
|
