(FEATURING GUEST SPEAKER: RAY MACKLEM, MORTGAGE PROFESSIONAL)

So you’re thinking about purchasing a home, you’ve thought about the perfect location and the perfect look but do you have your finances in order? I mean why not get to the fun stuff right away? Well, preparing your finances and getting pre-approved is a huge factor in determining what you can afford and making the process that much easier. Keep reading to follow our steps on preparing your finances and starting your search with ease of mind…

 

1. BUDGET & SAVE – DOWN PAYMENT & CLOSING COSTS

Firstly, and most importantly, you need to figure out your budget. What makes sense for your finances and your family? One of the best ways to determine your budget is to see how much you can save for a down payment. Another aspect to saving is to keep in mind your closing costs. Although they won’t be as much as your down payment you still want to plan for this and have the finances ready for when you get an accepted offer. We’ve included two charts below that shows you down payment percentages based on home prices and standard closing costs. These will give you an idea of how much you’ll need to save so you can budget accordingly.

 

Sources: https://www.canada.ca/en/financial-consumer-agency/services/mortgages/down-payment.html

 

2. CHECK YOUR CREDIT SCORE

Once you’ve started your savings and budget plan, the next step is to check your credit score. Your mortgage broker will use your credit score to determine whether you are a good candidate for a mortgage loan and the rate you will get once approved. In Canada we have two agencies that provide your credit score report Equifax Canada and TransUnion Canada. Your report will show if you’re in a good position currently or if you need to get your credit score in a higher range.

https://www.consumer.equifax.ca/

https://www.transunion.ca

 

 

3. ORGANIZE YOUR DOCUMENTS

Thirdly, you’ll want to organize all the documents and information you’ll need for your mortgage broker making the process easier and hassle-free. We’ve included a checklist below to help you get organize:

  • IDENTIFICATION
  • LIST OF ASSETS
  • INCOME
  • DEBTS (IE: CREDIT CARD BALANCES, LOANS)
  • FINANCIAL OBLIGATIONS (IE: SPOUSAL/CHILD SUPPORT)
  • PROOF YOU CAN PAY DOWN PAYMENT & CLOSING COSTS
  • PROOF OF EMPLOYMENT
  • PROOF OF CURRENT SALARY (IE: RECENT PAY STUBS)
  • YOUR JOB TITLE & LENGTH OF EMPLOYMENT
  • NOTICE OF ASSESSMENT FROM CRA IF SELF EMPLOYED

Source: https://www.canada.ca/en/financial-consumer-agency/services/mortgages/preapproval-qualify-mortgage.html#toc2

 

 

4. MEET WITH YOUR MORTGAGE BROKER 

You’re finally ready to get pre approved! Meet with your mortgage broker to discuss the next steps for you and make sure to ask important questions such as:

  • What are my chances of qualifying for a mortgage? 
  • Is there an expiration date on the pre approval? 
  • What mortgage plan is the best for me?
  • What costs should I take into account when starting my home search?
  • Any advice or tips before I start my home search?
  • Anything else you’re confused or unsure about

 

 

5. SEARCH FIRST TIME HOME BUYER INCENTIVES 

We’re so fortunate to have incentives in place for first time home buyers in BC. If you haven’t already, take a look at what incentives you may qualify for. This could change your budget and widen your search criteria if you’re able to use any of the incentives offered such as the first time home buyers program.

First time Home Buyer Program Qualifications: https://www2.gov.bc.ca/gov/content/taxes/property-taxes/property-transfer-tax/exemptions/first-time-home-buyers

 

 

6. START HOUSE HUNTING 

You’re finally ready for the fun stuff! You can now start your search with ease of mind. Good luck and we can’t wait to help you in your home search!