A mortgage pre-approval is a written commitment, given by a lender, detailing that you will get a mortgage at a specific rate of interest that is guaranteed to be held for you for a set amount of time. The commitment is made subject to a property assessment and insurance by CMHC and is free and without obligation.
A pre-approved mortgage gives you an edge. Before you even go house hunting, you will know the size of your mortgage, the interest rate, and the size of your monthly mortgage payments. With your financing already mapped out, you can concentrate on finding the right home in your price range. A pre-approved mortgage also puts you in a strong bargaining position when you make an Offer to Purchase. If the seller wants to make a quick sale, you may be able to negotiate a price lower than the list price, because the seller knows that you are a serious buyer. On the other hand, if several people are bidding on the home you want, you may decide to offer to purchase at the list price, to beat out earlier offers.
Shopping for a Home
You are ready to go shopping if you have :
- Set aside money for your down payment and additional costs
- Determined the price of home you can afford
- Investigated your mortgage options
- Your pre-approved mortgage certificate
Draw up a Wish List
Think about where you would like to live (what area or neighborhood) and what kind of house you would like to live in (which features are absolutely essential, which you can live without and which are entirely out of the question).
Take a look at real estate ads for the area you're interested in to see what's on the market and the prices. Also drive around a few neighborhoods and see what's for sale or visit Open Houses. This can help crystallize what you want or don't want in a home.
Choose a Real Estate Agent
The best real estate agent will be a combination of personal advisor, consultant and negotiator. He or she will show you homes that match your criteria, guide you through the home buying process, negotiate the best possible price for your home and deliver your closing paperwork.
Axiom Mortgage Solutions believes in fully preparing you for your new home purchase from pre-approval to recommending a real estate agent familiar with the area you are interested in. Although your friends, relatives or co-workers may be able to recommend a real estate agent, it is extremely important to work with someone familiar with the area that you are specifically interested in. Realtors will be privy to specific information in these areas that can save you thousands off the purchase price and make you aware of problematic areas as well.
Retain a Lawyer
Retain a lawyer who specializes in real estate. Depending on the volatility of the real estate market, you could find yourself in a bidding war for the home you want and you will want to have your lawyer look over any offer to purchase before you submit it.
House Hunting
Knowing exactly what you want in a home will save you a lot of time when house hunting. Think about your immediate needs, your future plans and your lifestyle. When you look at homes, you will be concentrating on the house, but don't forget to look at the property as a whole - the lot, the neighborhood, the surroundings - and how close the home is to facilities and services that are important to you.
Buying a home can be an emotional decision, but the home you purchase should strike a balance between your wish list and the practical realities of the property, its location and the housing market. Use our house hunting checklist to compare the homes that you view and get a clear understanding of what exactly is included in the purchase.
