FIRST TIME HOME BUYERS - TOP 6 THINGS!If you're looking to buy a house for the first time you probably feel overwhelmed by all the different things you need to know and take into consideration to make the transition from renter to owner. Buying your first home should be exciting! Here is a step by step guide of a typical home purchase:
1. FINDING A REALTOR
Once you have been pre-approved you will want to contact a Realtor. A Realtor works on your behalf to help you find the right home at the right price. It is always best to find one Realtor to work with as he/she will be able to get to know you better and help you make informed choices, and can show you any home listed on MLS and even private sales, whether it's their listing or not. If you have not already chosen one, contact us and we would be happy to work with you or provide a Realtor referral for your area.
2. GET PRE-APPROVED FOR A MORTGAGE.
Before you start looking at houses you need to find out how much of a mortgage you could qualify for so that you search in the right price range. There is nothing worse than finding the house of your dreams only to find out it's beyond your reach financially. Getting pre-approved involves submitting a mortgage application and verifying your income, credit and down payment. Fulfill all of the requirements or conditions. With this in hand you will be able to search for properties in your price range and buyers will take you more seriously if they know you've been pre-approved.
An important note: Getting a pre-approval does not mean you are guaranteed a mortgage. The lender (and insurer) still has to approve of the house you want to buy, and if your financial circumstances change between the pre-approval and deal closing stage such as a job loss or a negative entry on your credit bureau, you could still be declined.
3. FINDING A PROPERTY AND MAKING AN OFFER
Now that you have a Realtor you can start looking at properties. You want to give your Realtor as much information as possible about what you want so that you don't lose time looking at properties you have no interest in. When your Realtor knows what you want, they can be much more effective at finding the right home for you quickly.
When you've found your home, you will make an official offer to the seller, and the negotiating begins. The seller may accept your offer or they may counter-offer. This process can go back and forth several times until you and the seller either agree on a price. The offer also includes when you want to take possession of the house, any items to be included with the house (hot water tank, appliances etc.) and conditions that have to be met before the deal is finalized. Conditions could include a satisfactory home inspection, water test, and financing. Important: Even though you have a pre-approval, always include a condition that your offer is ‘Subject to Financing'. Once an agreement has been reached, the offer is signed by both parties and that is where we come in again. SRRIB will make certain that you understand your obligations throughout – you will be in control.
4. GOING FROM A PRE-APPROVAL TO A LIVE DEAL
You would send us a copy of the Offer to Purchase and MLS listing for the property you want to buy, and we resubmit to the lender as a ‘live deal'. The lender adjudicates the property based on their guidelines and if they are satisfied with it they issue a firm approval.
5. MEETING LENDER CONDITIONS
Now that you have a firm approval, you can waive the financing condition on your Offer to Purchase. Now is also the time where all the mortgage documents need to be signed, proof of income and down payment need to be collected and any other lender conditions on the approval have to be met. This is a very important step because if you cannot provide satisfactory proof to back up what you put in the application, the lender may refuse to fund your mortgage. That's why it's important to be completely honest with your broker during the application process. It is important that you work closely with us to ensure this process goes smoothly. We'll advise you of everything you need to meet all conditions.
6. CLOSING YOUR MORTGAGE
Now that all the conditions are met and the lender is satisfied, the deal goes to your solicitor who is in charge of doing the legal side of the mortgage such as title searches, registering the deed and mortgage, paying the land transfer tax and anything else the lender requires before closing the deal. When you visit your lawyer you will sign all the legal documents to complete the mortgage transaction and write a cheque for your down payment, land transfer taxes and legal fees. SRRIB will make sure you fulfill your obligations in this time sensitive contract.