First Time Homebuyers

As a first-time homebuyer, you may feel that you are stepping into foreign territory.  You’ve heard people talking about their experiences with being a homeowner, you’re hearing about the marketplace everywhere you turn – and you’re just plain tired of paying ridiculously high priced rent!  But what are the first steps to owning your first home?  How do you know what you will qualify for?  Allow us to assist you in the process of becoming a homeowner…here’s how:

FIRST STEP

1. We will pre-qualify you through our fast, efficient mortgage application.  This process takes about 10 minutes either over the phone, or through an online application! 
   
   
2. We will analyze your work history, credit history, and financial position. 
   
   
3. We will provide you only the very best mortgage options for you and your lifestyle.
   
   
4. Once you have a qualifying number, you’re ready to shop!!

(It is advisable to hire a real estate agent to shop for your home, so let us know if you would like a reliable referral.) 

You’ve found your home, you placed an offer on it, and the offer has been accepted by the seller!! NOW WHAT?

Getting up to this point has been stressful enough.  Exciting yes, but stressful!  Most people will find an incredible amount of joy and excitement in buying their first home, but if you’re like MOST people – you will find hints of stress in the process.  Don’t worry – that’s absolutely “par for the course”.  We’re here to relieve your stresses, and smooth the process out as much as possible for you.

Once your offer has been accepted, we will have a certain period of time to deal with the bank and VERIFY your income, down payment (if any), and the property that you have chosen.  This period of time is called the “condition to finance” period and it’s VERY important that you have a condition to finance.  This is your safety net should the lender decide that they don’t like something about the property, your income, or your down payment.  Typically you will require anywhere from 5 to 7 days for your condition to finance.

BUT I THOUGHT I WAS PRE-APPROVED??

You were!  But many people do not know that even though you are pre-approved, you still have to verify all of the information that we’ve given the lender at the beginning.  It’s only when you find a place to purchase, the lender will want to verify all of the information.  The pre-approval is just that; a PRE-approval.  The pre-approval turns into an actual approval once the verifying documents are submitted to the lender at the time an offer to purchase has been accepted.  Typical documents that you will need to collect for a lender are the following:

1. Your letter of employment
   
   
2. A recent Paystub
   
   
3. Your down payment verification; if it’s coming from your savings the lender needs to see a 3 month savings history from your account – if it’s coming from RRSP’s or investments, the lender will require an investment statement showing the capacity of the down payment – and if it’s coming from a gift, the lender will require a gift letter (we have the templates), and a bank statement showing the gifted money going INTO your account.
   
   
4. Your purchase agreement
   
   
5. The MLS listing on the property (we can get the purchase agreement and MLS listing from your realtor)

To stay on top of the game, it’s always a great idea to forward your letter of employment and paystub to your mortgage associate at the very beginning.  That way there is no miscommunication with exactly what your income is.  Obviously the income is a very important factor in obtaining a pre-approval.  If you down payment is already in place, you can forward that too!  The more concrete information we have at the beginning, the better and smoother the process will be for YOU.

When the lender verifies the details to your loan, they will give us (the mortgage associate) an update on our system letting us know what is approved, and anything that needs more clarification.  It’s not until we have the full verification from the lender that you should waive your conditions to finance.  Once you waive your conditions to finance, any initial down payment that went towards the purchase of the home now belongs to the seller.  This is the safety net that we talked about; you can safely retrieve any initial down payment if financing does not go through during your condition to finance period.

When everything goes through, we will advise you to waive your conditions – and the home is YOURS!  This places us in the home stretch of your ownership, but there are some “behind the scenes” duties that have to be done so that you can close the mortgage, and take possession on time.  Once all the signatures and documentation are in place, it’s up to the lender to package your legal mortgage documents to your real estate lawyer.  Yes, you will need a lawyer because they are the ones that will register your name at land titles, disburse your down payment to the proper party, and correspond with the lender to make sure that they advance the funds required to close your mortgage.  The cost for this is approximately $800 - $1000 for this professional service.  The lawyer will contact you before taking possession so that they can get your signature on the legal papers, and go over any questions you may have about the legal part of the mortgage.

Home stretch…
Now is an advisable time to set out your plans for “moving day”.  About 6-8 weeks before moving, you may want to consider the following:

1. Reserve a rental truck (or a group of friends and family who own trucks!)
   
   
2. Stock up on packing supplies – tape, boxes, bubble wrap, blankets, markers, etc.
   
   
3. Clean out closets, basement and garage.  Have a yard sale or donate unneeded items to charity
   
   
4. Advise post office of new address and effective date
   
   
5. Send change of address to: Telephone company, insurance company, bank and credit card companies, subscription companies (magazines, etc.), hydro, cable, arrange to transfer your household insurance to your new home, arrange to have utilities disconnected (gas, cable, phone, hydro, security system)

About 2-4 weeks in advance:

1. Stop or transfer newspaper and other home deliveries
   
   
2. Obtain school, medical, and dental records (if moving to another town or city, or if you’re proximity restricts you to having to move these things)
   
3. Obtain veterinarian records for pets
   
4. Reserve elevator if moving from an apartment or TO an apartment
   
5. Defrost freezer

A few days before moving:

1. Complete any packing not yet done
   
2. Place important documents in a safe box that you will carry.  Mark “Do Not Move” on the box.  Move this box yourself
   
3. Prepare an “open first box” with basic kitchen and bathroom supplies, towels, bedding and hammer, screwdriver to set up furniture.

Moving Day:

1. Check all rooms and closets to make sure that nothing is left behind
2. Turn down the thermostat
3. Leave labeled keys with the landlord, solicitor or real estate agent
4. Check that you have keys to every lock in your new home
5. Make sure the utilities are on and working properly in your new home
6. Show the movers where to put boxes and furniture
7. Unpack your “open first” box
8. Set up your bed; unpack the kitchen and bathroom to help you feel at home!

AFTER you move:

1. Change your driver’s license address and your car insurance.

REMEMBER – You may need to arrange for any extra time that you may require away from work!

Hopefully you’ve found some useful information within these words, but I’m sure there will be more information, questions, and concerns that surface throughout the process.  Perhaps I’ve spawned some questions that you didn’t’ expect to have BEFORE you started reading this!  Don’t worry…that’s part of the “stress” we talked about.  But hopefully this gives you synapses of what to expect when you’re expecting your first home!

A friendly voice, knowledgeable advice – a move in the RIGHT direction!