21 Jul

Are You Ready for Home Ownership?

Mortgage Tips

Posted by: Yen Chi (Frank) Feng

Most people know they need a stable employment and a down payment to purchase a home. There are a few other factors which may help you realize you are ready. Perhaps even earlier than you thought! Here are four main things that can help you determine if you are ready for home ownership:

DOWN PAYMENT AND ONGOING COSTS

Potential homeowners tend to focus on having enough down payment only. You should also be able to manage the mortgage payments and ongoing maintenance. My Mortgage Toolbox app from Dominion Lending Centres (https://www.dlcapp.ca/app/yenchifrank-feng) has some great calculators to help and determine what you can afford. If you have enough down payment and can manage the costs, you are ready to house-hunting!

GOOD CREDIT

As most people know, credit score plays a major role in qualifying for home purchase. A good score means the credit score is 680 or higher. If your credit score is below 680, you will more likely be paying higher interest rates. That means you will have to pay higher payments or could be denied all-together. It is vital to have your credit score in order to get the best mortgage product and rate before the home buying journey. A mortgage professional can help you to get on the right track in the shortest time possible. Sometimes all you need are a few subtle changes or debt consolidation. Your credit score will improve within a couple months.

NO OTHER LARGE, UPCOMING EXPENSES

Do you plan on buying new vehicle in the next year? Are you thinking of starting a family? Are you considering going back to school? You may think you can afford to purchase a home right now, it is vital to be honest about your future plans. What does your life look like in 1 year? 5 years? or 10 years? If you know that you are not planning on incurring big expenses that you need to factor into your budget anytime soon, then it may help you decide to buy a home.

DISCIPLINED

Budgeting is one of the most important factors for purchasing a home. You have to know what you can afford – and stick with it! It is easy to be tempted by a gorgeous 6 bedroom home or a backyard pool or private community. But at what cost? Are you ok to go all-in and leave you scrambling each paycheck or derail any plans of future financial stability? It is worth rethinking. A good understanding of what you NEED in a new home versus what you WANT is important. This is a good step towards determining what you are looking for and planning a budget that suits your needs. This will ensure  you can continue to live comfortably.

These are just four signs that you may be ready to purchase a home. If you are seriously considering buying or selling, talking with me. I can help to ensure you have the best experience when it comes to buying a home!

16 Jul

The Mortgage Financing Process

Mortgage Tips

Posted by: Yen Chi (Frank) Feng

The number one question for any home buyer to the mortgage process is “what does this process entail?”. Here is a simple outline to give you an idea of the process and help you understand what to expect as you embark on your home buying journey!

STEP 1: BE PREPARED

Before meeting with your mortgage professional, it is important to prepare the following information prior to the meeting. Your mortgage professional will help to determine what you qualify for and the best mortgage product for you:

  • Your employment history
  • Proof of address and your address history
  • Government-issued photo ID with your current address
  • Proof of income for your mortgage application
  • Down payment proof (amount and source)
  • Savings and investments proof
  • Details of current debts and other financial obligations

STEP 2: GET PRE-APPROVED

Getting pre-approved is one of the best things any home buyer can get. Mortgage pre-approval requires verification of your financial history. This can help you determine your price range, understand the monthly payment and provide the rate for your first term.

It is important to note that pre-approval does not mean an approval. The bank may not have fully reviewed your documentation and may still need the approval of a mortgage insurer. However, it does have a lot of benefits that can give you a “leg-up” in your search!

BENEFITS OF PRE-APPROVAL

It is important to get pre-approved. This helps to determine your price range and guarantees the interest rate for 90-120 days while you search the perfect home. Plus, the rate will be adjusted down with any market reductions.

When it comes time to purchase, pre-approval also lets the seller know that securing financing should not be an issue. This is extremely beneficial in competitive markets where lots of offers may be coming in.

Quick Tip: Being entirely candid with your home-buying team throughout the process will be vital! Hidden debt or buying a big-ticket item during your 90-120 day pre-approval can change the amount you are able to borrow. It is best to refrain from any major purchases (such as a new car) or life changes (such as changing jobs) until after closing and you have the keys to your new home!

STEP 3: HIRE A REALTOR

In today’s competitive real estate market, it can be very difficult to acquire property WITHOUT the help of a realtor. One of the reasons realtors are integral to the home buying process is that they can provide access to properties that are not 0n the MLS website. They can gain access to information about homes that may come onto the market before a listing is even signed.

Most importantly, realtors understand the INs-and-OUTs of the home buying process. They know how to be successful in your endeavors to purchase a home. Also, they can guide you through the process from the first viewing to having your offer accepted.

STEP 4: SHOP THE MARKET & MAKE AN OFFER

Once you have found the property that meets your needs, you will put in an offer. The offer may be accepted or be countered. This process can go back and forth until you reach an agreed price with the seller. To start home shopping today, check out the listings on Rew.ca!

STEP 5: OFFER IS ACCEPTED

Once your offer is accepted with the condition of financing, you will need to do a few things to finalize the sale:

  • Ask for a realtor intro between your mortgage professional and realtor.
  • An appraisal may be required. This will be determined and arranged by your mortgage professional.
  • Send in any remaining documents required for financing (income confirmation, down payment confirmation, etc).
  • Arrange a home inspection.
  • Receive the bank’s approval on property and final approval letter.

STEP 6: REMOVE CONDITIONS

At this point, your financing is in place and you are ready to proceed with the purchase.

STEP 7: LAWYER’S OFFICE

You will be asked to provide any money that is to be used as your down payment. This is not the deposit already with your realtor. Typically, you will go in 1-2 days prior to the completion date.

Before you start on your home buying journey, be sure to take advantage of the expert advice that I can offer. As an expert in mortgages, I can help walk you through the process and find you the best mortgage product to suit your unique needs! The best part? It will not cost you a penny! Mortgage professionals are paid out by the banks when they register a new contract. Therefore, all that matters is finding YOU, the client, the best possible mortgage.