Important to get yourself a pre-approval!

We have covered all the incentives for First TimeHome Buyers in the past. If you are ready to take advantage of these incentives, I have one more great news for you. The 5 year fixed rate has recently dropped to 2.99%. Every $100,000 mortgage costs only $473/month over a 25 year amortization.

However, mortgage financing has been further tightened lately. It is very important to get yourself pre-approved before even starting your home search!!

In a multiple bidding situation, sellers often only consider working with a firm offer, an offer without any conditions. In a more balanced market, an offer is usually conditioned upon home inspection, financing, and status certificate reviewed by buyer's lawyer (for condos only).

The problem arises when a buyer offers the seller at a purchase price that is over the lender's apprasied value. It ends up the buyer cannot get the mortgage financing from the lender.

This situation can be easily avoid by getting yourself pre-approved, and working with a real estate agent whom you can TRUST. You need an agent who would look after your BEST INTEREST.

Before you start your homesearch, you should arrange your mortgage first.

With a pre-arranged mortgage, you’ll have a better idea how much you can afford and how much you can borrow. If you choose a fixed interest rate, you are guaranteed that rate during the 90-day pre-approval period, so you are protected if interest rates should rise. As a result, when it comes to the time to make an offer, you’ll be able to make an informed decision.

Your mortgage broker will meet with you to complete a mortgage application form and with your consent to perform a credit check. You’ll also be asked to provide the following documentations:

1. Name of your employer, length of employment, and your current salary.
2. Annual salary for the household unit.
3. If you own your business or being self-employed, we require earnings for the past two years.
4. Annual earnings from commissions, bonuses or tips...etc.
5. Annual interest and investment income.
6. List of assets including bank accounts, RRSPs and other investments; major personal assets, such as jewelry, car and collections.
7. Last but not least is the details of liabilities such as amounts owing on credit card balances, student loans, car loans, personal lines of credit, other debts.