Article updated: August 23, 2024
Original article published: March 25, 2020
When you’re new to the home buying process, it can seem confusing. What step is first? Do we put an offer in first or speak to a mortgage broker first? The government and industry regulators have not made it any easier over the last couple of years with new rules, regulations and the stress test.
That is why I’ve created this first time home buyer guide. In this article, I will go over everything you need to know about the home buying process as well as the mortgage process.
The first step in buying your first home is your mortgage pre-approval. This is when I, a mortgage broker, will check your credit, income and down payment to let you know what price point you’ll qualify for.
As a mortgage broker, I often hear from people who have already put an offer in on a home. I always let them know that getting a pre-approval is the most important thing to do first.
Why? It allows you to steer clear of homes that you may fall in love with and never qualify for. During this process of a pre-approval, you and I will discuss potentials for a raise, work bonuses, saving more for a down payment and any other scenarios that could happen before buying your home. These scenarios have the potential to change your approval number.
If you don’t qualify for the price range you’re hoping to buy in, we can work together to create a plan on how to get you there. I can share my knowledge of improving credit, paying down debt and other ways to help you boost your approval ratios.
Once you receive your mortgage pre-approval, you’re off to the races! You can work with your Realtor to find the perfect home within your budget. If you don’t have a Realtor yet, please reach out to me. I am happy to share a couple of great Realtors that I work with often and who would work for you and your situation. During this step of the home buying guide, your Realtor will discuss wants, needs and location. They will work their magic to find a home that works for you within your price point.
You can also browse through the public MLS yourself as well to get an idea of what’s available. If you find a home within your range, send it to your Realtor and book a showing!
Once you find a home that fits everything you’re after, your Realtor will create an offer for the home. During this process, the offer may go back and forth with counter offers. Your Realtor will be able to guide you along through the process on how aggressive you should go with an offer and what number you should counter with if that happens.
Once an offer is accepted, you will agree on subject and completion dates as well. These can have several different options, with average timeframes being between 7-14 days for subject removal and 30-60 days for a completion date.
Once you’ve made an offer (after you’ve gotten a pre-approval), then it’s time to get back in touch with me! This is where the majority of the work happens. This is when we will submit a formal mortgage application to the mortgage lender. This involves providing the detailed financial information and documentation needed.
I will let you know everything that will be needed for this to become approved. Oftentimes I will ask for this information and documentation earlier, that way I am able to be working behind the scenes on finding you the best rate while you’re finding yourself the home.
We will discuss what type of mortgage you’re looking for (variable or fixed), the term you’re happy with and the amortization.
After all conditions have been met, the lender grants final approval and prepares the mortgage offer. This document outlines the terms and conditions of the loan, including the interest rate, payment schedule and any applicable fees.
Once the lender has prepared all of this, I will send this to you to sign and complete. I will go through the document with you and answer any questions you have whether it’s about interest rates or payment schedules.
In addition to the finance subject (mortgage loan that we just spoke about above), there may be more subjects you have to complete before finalizing the offer and closing on the home.
These can include:
Once these subjects are complete you will put down a deposit to be held at your Realtors brokerage which will form part of your down payment. Once you’ve sent in your deposit, it’s time to celebrate because you’ve finalized the offer and the home is yours!
The final step in your first home buyer guide is your signature. After the mortgage has been approved and we’ve signed all of those documents and you’ve closed on the property, it’s time to sign all the other legal documents!
This step will include using a lawyer or a notary. The professional will let you know what you need to bring to the appointment and will also let you know the exact amount needed to fund the purchase. This will be a certified cheque that you will bring them later before funding.
The final step is moving into your new home. All the hard work will be behind you at this point and the exciting parts await!
I hope that this first time home buyer guide helped you understand the process of buying your first home. It doesn’t have to be a stressful and confusing process. When you work with the right professionals, it’s a fun and enjoyable experience for everyone.
If you’re ready to see what you’re approved for and start the home buying process, get in touch with me today! Give me a call at 250-826-3111, apply on my website or contact me through my online contact form.
Let’s get your application off the ground.
