Buying a home can be a very stressful experience. The space between first meeting and getting the keys seems endless when you don’t know exactly what is going on. This week we will take a look at the process to give you a better idea of what to expect.
1. Get pre-approved – This is the best time to do a bit of online research and asking around for recommendations to a quality mortgage professional. You will be required to provide the normal application info such as employer, assets, history of address and so on. Your credit will be pulled so be prepared for that. You mortgage professional needs to do so to know if you can purchase. They will send you off with a list of paperwork to gather and a price point of affordability.
2. Choose a Realtor and go house hunting – A qualified Real Estate professional is truly your best ally when it comes to buying a home. They are paid by the seller so you get their expertise for free. This group of people are heavily watched by the Real Estate Counsel of Alberta and must adhere to the highest code of ethics and standards. They are uniquely positioned to help you find the perfect home while avoiding the pitfalls. All negotiations are handled through them as are the preparation of the necessary contracts. You will be required to provide a deposit on the purchase but it counts as part of the down payment and is refundable if the deal does not complete.
3. Get Genuinely Approved – Once it is accepted, the Realtor will send over the offer to purchase to the mortgage professional. It is then presented to the mortgage lenders and mortgage default insurance providers for review. Your employer will be called for verification. The paperwork you provided will be scrutinized carefully and once everyone is satisfied, you will be able to advise the Realtor to remove the financing condition. Please be sure only to remove the financing condition when advised to do so by your mortgage professional.
4. The home inspection- Once you have successfully hurled the financing condition it makes sense to incur the cost of the home inspection. The home inspector will go in and carefully look at every part of the home. You will be provided with a report for review. At this point you can decide to go back to the seller to ask for a reduction in price to repair certain issues, you can collapse the deal if the inspection shows too many defects or if it looks good overall, you can remove the home inspection condition too.
5. The lawyer – At this point the lawyer receives paperwork from the mortgage lender and the Realtor. They and their team prepare the paperwork. You will meet with the lawyer to sign the paperwork and provide the balance of the down payment, the legal fees and other costs such as title insurance.
6. The homeownership requirements – prior to possession you will have to ensure that you have home owners insurance, have set up the property taxes if going through the TIPs program, and set up the utilities. Of course there are the moving truck arrangements and cleaners and a myriad of smaller tasks that all need to line up just right.
7. Possession Day – The big day is finally here! The mortgage provider will advance your mortgage funds. Your lawyer sends them and the down payment funds to the other lawyer who, upon confirmation of receipt, will advise the Realtors involved that they are clear to hand over the keys. Congratulations! You are now officially a home owner.
8. After the fact – You will be well served to make a quick call to your new mortgage provider to make sure the payment frequency and tax set up have been done correctly. It is also a good idea to update your telephone number and mailing address if different from what is on the mortgage.
So there you have it. The mortgage process as simplified as it can be. Have a great week.
Pam Pikkert is a mortgage broker with Mortgage Alliance – Regional Mortgage Group in Red Deer.