Todd Sanderson


Royal LePage Nanaimo Realty

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    • Choosing a REALTOR®
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    • If you are selling your home
    • Making an offer to purchase
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    • Preparation
    • Shop for a home
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    • If you are also buying a home
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Preparation

 
Purchasing a home is a very exciting time!

Before meeting with a lender, it is a good idea for you and anyone who will share in the ownership of the home to discuss your financial objectives in this purchase. How much of your savings can you spend up front? What is a comfortable monthly payment for you? What closing costs do you anticipate? Remember, there can be a big difference between what a lender will qualify you for and what you can comfortably afford based on your lifestyle.

DOWN  PAYMENT.   If  you  are  considering  purchasing  a  home  with  less  than  25%  down  payment, your mortgage application is required by law to be insured by CMHC (Canada Mortgage & Housing Corporation) or Genworth Financial Canada. Mortgage insurance makes it possible  for  you  to  purchase  a  home  using  a  lower  down  payment.    It  allows  the  lender  to  approve your mortgage with as little as 5% down. Generally, a higher down payment means better loan terms and a lower interest expense on the mortgage.

QUALIFYING FOR A LOAN. During the early stages, you would like to become prequalified for a mortgage loan. This ascertains the amount that you can afford. This gives you the flexibility to search  for  the  right  home,  particularly  when  there  are  so  many  keen  buyers.  The  seller  also  realizes that you are sincere in purchasing the property and can afford it. But remember, just because the lender says you can afford one price doesn’t mean that’s what you should spend. Be wise and thoroughly examine how much you should spend on a home.

Be  prepared  to  provide  the  lender  with;  down  payment  information,  bad  debts,  past  credit  history, current & employment history, letter from employer, assets, liabilities, credit scores, for those self-­‐employed recent tax returns, etc.

If you shop around wisely for mortgage rates and terms, you can get a rate that can really help you save a substantial amount throughout the span of a loan. A small variation of 0.5% can also become significant, as can the terms of the loan.

If  pre-­‐approved  the  lender  provides  you  with  a  letter  of  commitment,  telling  you  how  much  money they would be willing to loan you’re for the home purchase. However, keep in mind that even a pre-­‐approval is not a guarantee that you will be approved for a mortgage loan, the home must still qualify.

A preapproval can guarantee the rate, save time, and shows you are serious about your home buying intentions which may provide leverage in the negotiation process!

If you are also selling your home >>

Download the Home Buying Process Booklet in PDF Format

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Todd Sanderson

250-758-7653

Royal LePage (Nanaimo North) Ltd.

4200 Island Highway, Nanaimo, BC V9T 1W6

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