The Chicken or The Egg

You know the saying...what comes first?

When you're buying a home, get pre-qualified for your mortgage BEFORE you start looking and BEFORE you make an offer.

As a buyer, you know this to be true but do you know why? Here are a few benefits to knowing for certain that you have been approved to purchase:

  • You don't fall in love with a home that is over what you can afford to buy. Homes that sell for less are either older, have smaller yards, fewer rooms, no garage or are in noisier locations. They are still fine homes but by comparison may feel inferior. Start looking in your price range and you will compare these homes to each other not homes in a higher price range.
  • You can eliminate a stressor that just doesn't need to be there. There is more to buying a home than planning a fun day of showings. When it comes to making an offer and negotiating, you shouldn't have to worry about whether or not you'll be able to afford the mortgage payments.
  • You will feel confident negotiating. By knowing you are within your means, you will make an offer and engage in the negotiating with confidence.
  • You won't have any surprises during the subject removal period. Your lender will need a copy of the accepted deal so they know what house you are buying and for how much and they will likely order an appraisal and give you the final approval on the home. You don't want to find out at this time that they now need your tax returns and that the new vehicle you bought means you don't qualify for as much as you initially did!
  • You will know how much money you need in total. Aside from the down payment, there is the house inspection, appraisal, title insurance, a portion of the year's property taxes, legal fees and the Property Transfer Tax. (Click HERE to learn more about the Property Transfer Tax.)

Start with a professional real estate agent who can get you going with the fun part - receiving a list of homes by email that fit what you're looking for but then let them refer you to a professional lender who can walk you through the mortgage approval process so that your egg can hatch into the home that is right for you!

Paige Gregson paige.gregson@century21.ca

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