When my wife and I first got married, we had decided to rent. We had dreams of purchasing a home, but didn’t think we could afford the payments or the maintenance. We knew what we wanted, but houses were selling quickly and we hadn’t done the math. So for the next seven months, purchasing became just that…a dream.
It wasn’t until a while later when we decided once and for all…we were going to do it! We were going to make this dream a reality! But what was the process? Purchasing a home can be summed up in five easy steps:
1. The Pre-Approval
2. Finding that Special Place to Call Home.
3. The Approval
4. Final Legalities
5. Possession
THE PRE-APPROVAL:
Get a Pre-APPROVED not Pre-Qualified for a mortgage: A Pre-Qualification is a generic estimate of what you might be approved for and because of this can lend itself to troubles or frustration down the road.
A Pre-Approval requires you to verify your income, down payment, and credit situation by producing a number of documents (example: Employment Letter, Pay Stub, 2 Years of Tax Returns, and Three Months Bank or RRSP Statements). This will give you an accurate review of what you will be approved for. Once you have gone through this process you will be presented with a Pre-Approval Certificate showing the Interest Rate and the maximum mortgage you are Pre-Approved for.
FINDING THAT SPECIAL PLACE TO CALL HOME:
Present your Realtor with a copy of the Pre-Approval Certificate and go house hunting! Once you find that special place to call home, make an offer. Remember, because you were Pre-Approved and not
Pre-Qualified, you can be confident that you will be able to purchase this home.
THE APPROVAL:
Once the accepted offer has been signed, your Realtor will fax a copy for your Broker to submit to the Lender. As you gathered most of the required documents previously, there will be very little additional documentation required.
FINAL LEGALITIES:
With your financing in place, you will be asked to “Remove Subjects.” This means you commit 100% to purchasing this home. Two weeks prior to possession, you will receive a call from your Solicitor to sign the final documents.
POSSESSION:
You are now a Home Owner!