Getting a Mortgage:
A pre-approval may not be enough.
The biggest hurdle for most people when it comes to buying a house is the financing. Before starting to shop for a home it is critical to, at the very least, get a pre-approval from a lending institution that they will lend you some money to buy a home. This is where the lender decides how much you can afford based on your income and debt This is not the end of the process and it is not a guarantee you will get all the money you need. The lending institution is in business to make money so they need to do their "due diligence" to make sure you aren't a credit risk. They may ask you for proof of income and employment for one or more years, and any other document that will prove you have your finances under control. If you are self employed be prepared to show your notice of assessment from CRA for 3 years and proof that you are not behind in your taxes among any number of other documents.
The lender also must verify that the home you are buying is worth what you agreed to pay for it. It is the responsibility of the lender to make sure they can sell the asset (your house), and get their money back if by chance you are no longer able to make payments. If the appraised value of a home comes in less than what your offer is, the lender has the right to either reduce the amount of the mortgage or cancel the loan altogether. Make sure any appraisals are done prior to waiving conditions. Know that if you buy from a private home seller, the bank will very likely do an appraisal. Without the involvement of a licensed REALTOR® the likelihood the home is overpriced increases drastically.
Once the bank has agreed to lend you the money and has approved the home as well, DON'T make any more major purchases and don't apply for any more credit. The lender has approved your loan based on your debt ratio at the time of your application. If your debt level changes, the lender can cancel the loan.
Get a written mortgage commitment from the bank as soon as you are able.
Buying a home should be a fun experience as stress free as possible. Understanding the lending process will help make things go smoothly.
Click the bag of money to apply on line for a mortgage with Kevin Harris of Centum Mortgages.