Monday, April 4, 2011

First Time Home Buyers


This post is set up to try and make the first home buying experience fun and exciting.  The more knowledge you have and the more paperwork you have in order will make the whole process a lot more fun and exciting.

The very first step is to speak with your local mortgage broker.  Sure it is fine to use online applications and do the process through email and phone, but when it comes right down to it, you want to make sure you can actually meet with your broker.  Chose a broker who will take the time to explain the process and is available to answer your questions.

Once you have chosen a broker you will take part in the pre-approval process.  It is always best to do this in person because online many items can be missed.  People often forget to disclose many parts of their income such as child tax credits, overtime they work, other incomes from non traditional sources.  It is a good idea to bring in a recent pay stub, this ensures that the amount your pre-approved for is accurate.

We will ask you the source of your down payment.  Acceptable forms are savings, investments, gifted from immediate family member and of course RRSP's up to 25k for each purchaser as long as it has been in the account for at least 90 days.  Also income will be asked and a credit check will be done.

Once you have received your pre-approval certificate it is time to go home shopping.  Time to find your Realtor.  If you do not know of one I can definitely refer a few good ones, it does make a big difference on the Realtor you chose.  When you find the home you want it is time to put in an offer.  The Realtor will instruct you to make the offer conditional on financing and home inspection.  If it is an older home you may wish to also add conditional on insurance, as well if it is a condo you will add a condition for the status certificate which is the financial condition of the condo corporation.

Once you have an accepted offer the realtor will ask you for a deposit.  This will count as part of your down payment.  Then the Realtor will send us your offer and we will submit it to the lender that best suites your needs.  Even though you have been pre-approved we still have to get the property approved by the lender and or the mortgage insurer, usually GENWORTH or CMHC.

Once we receive the approval from the lender you can waive your financing condition and if you meet the other conditions you have the offer will be firm, which means you are well on your way to home ownership.  At this point we will start the document collection process.  Required forms of documents depends on your form of income and the lender that is providing the mortgage.  I will go into more detail about this in a later post but generally it will be two pay stubs and a job letter, three months worth of statements showing where the down payment came from, a void cheque and lawyer info.

Once all documents are collected your file is complete and you then get in contact with your lawyer who will instruct you further.  Usually lawyers will set up a preliminary meeting with you to discuss the costs and process.  Then one or two days prior to closing you will get a certified cheque for down payment and closing costs meet with your lawyer and sign the official documents and wait for the magic moment.  You may also want to do a final walk through the day before closing or the day of to make sure the home and or the appliances are as viewed when you put in your original offer. 

On closing day once all monies have been transferred and the home is officially put in your name, you will receive the keys.

Any questions feel free to email or call me.


Ron Miller
Butler Mortgages

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