With the spring real estate market starting to pick up steam, real estate agents are seeing an increase in the number of people wanting to take a look at homes that might be of interest to them. Before you do that though there are several steps to consider:
- Decide if you really want to move and if so to where. Seems a simple question, but it really isn’t. All sorts of factors come into play such as schools, family sporting activities, amenities offered in different communities, commuting time etc.
- Try and agree on what each person wants to find in that house. Everyone has priorities that are important to them. For example a two car garage might be nice, but is it a priority. A four bedroom might be essential to one member of the family, but not the other. Have a good idea what you want so that your agent knows where to start looking.
- Check out your financing. What can you afford? This is a crucial step.
To help with an explanation of some of the terms that you will encounter, I asked Jill Gravelle, a mobile mortgage specialist with RBC, to explain some terms that confuse a lot of buyers. It’s a term you will often by asked by a real estate agent before they take you out to look at homes. Today I asked Jill to explain what it means to be pre-qualified for a mortgage?
Jill: Just to give a little insight as to the difference between pre-qualify and pre-approval in the world of mortgage financing. A pre-qualification is when you run the numbers on an unofficial basis. By numbers, I mean your monthly income vs your monthly debt repayment plus mortgage payment, plus heat, and plus property taxes. In essence, a prequalification is to determine, how much you can afford. It does not take into consideration the whole financial picture, nor your credit history. It is a starting point, for a client to start to build savings for a down payment, and gather mortgage information, not usually done as an application, to avoid a needless “hit” on their credit bureau.”
Now you know what it means when an real estate sales person asks you if you are pre-qualified.
With spring finally arriving, quite a few homes will be entering the market place. Have you taken those first 3 steps yet?
Keith and Bev Beardsley are sales representatives with Century 21 Action Power Team Ltd. They can be found at www.BeardsleyTeam.ca or contacted at 613-821-2384.