People fear what they don't understand. A good example is the purchase of a home. The average consumer knows very little regarding the home buying process. Between finding the right house, making sure it won't fall apart the day after it is purchased, and finding the best financing, it is no wonder that so many people are afraid to purchase their first home.
Before beginning the search for your dream home, it’s important that you do your research and become more fully informed.
Here are seven steps to get you started:
STEP 1: Visualize Yourself as a Home Owner
Before you start your house search, think carefully about what it will be like to be a homeowner. For most people, homeownership can be one of the most significant financial turning points in their lives. The advantages (tax benefits, pride of homeownership, financial investment) far outweigh any drawbacks.
STEP 2: Pull Your Credit Report
Your credit history is one of the first things a lender will look at in making a decision on your loan. Visit http://www.equifax.ca/ to obtain a credit report. Review it carefully to be sure all the information is correct. If you find discrepancies, you should work with the credit agencies to resolve them.
STEP 3: Determine How Much Money You Have for a Down Payment
Saving for a down payment can be one of the biggest barriers to homeownership. Mortgage lenders recognize this dilemma and many now offer low down payment loans and you can qualify for 100% financing. Three and five percent down payments are commonly available, and there are some loans that require no down payment.
You might be saving for a down payment. Or, you might already have it with sources that you didn't know were available.
The pre-approved mortgage will also advise you of the amount of money that you will need, and where you can get more.
Sources like:
� Income tax refund
� Savings bonds
� Checking and savings accounts
� Cash value of life insurance policies
� Gifts
� Borrow against a car or second home
� Retirement savings plan
� Starting a savings plan now
� (Or maybe even a credit card)
STEP 4: Choose the Right Lender for You
The mortgage broker vs. banks and mortgage companies. A mortgage broker has many different banks, savings and loan companies and mortgage companies that they "broker" their loans to, something like a stockbroker or independent insurance agent.
Since a mortgage broker does business with lots of banks throughout Canada, they can:
� Send the loan to many different underwriters
� Shop for the best rates and programs
Save you money by not charging loan origination fees
People fear what they don't understand. A good example is the purchase of a home. The average consumer knows very little regarding the home buying process. Between finding the right house, making sure it won't fall apart the day after it is purchased, and finding the best financing, it is no wonder that so many people are afraid to purchase homes.
Buying a home is one of the most important financial decisions an individual will make. For a first-time homebuyer, the decision to purchase a home can be daunting. It will represent a major step forward as the individual/family will be assuming potentially its largest responsibility. As with any major decision, it is important that everyone, especially first-time homebuyers, take full advantage of the information and training that is available to more clearly understand the home buying process.
STEP 5: Get Pre-Approved for a Mortgage
Most lenders will provide this service free of charge. Pre-approval will let you know exactly how much you can spend on a home purchase BEFORE you start your search. A preapproval in hand also makes you a more attractive buyer when you are ready to make an offer on a home. Home sellers are more likely to accept an offer from a buyer who can demonstrate the ability to secure financing.
STEP 6: Consider Using a Buyer's Agent
Most real estate agents represent the seller; they do not represent you as a homebuyer.
There is a fairly new type of real estate agent called a "Buyer's Agent."
They work for you, not the seller
You do not pay their commission - the seller does.
The buyer broker can disclose things to you about the seller (or the home) that they would not be able to if they represented the seller.
If a real estate agent will not offer you a buyer brokerage agreement, ask "Why Not". . .or better yet, find another agent!
STEP 7: Get Educated on the Home Buying Process
Many mortgage lenders, nonprofits, and even realtors offer homebuyer education classes to prepare you for homeownership. Classes normally run about four hours and cover the basics of home buying. Some of the topics covered are how to apply for a loan, find the right realtor, make an offer on a home, and the advantages and responsibilities of homeownership. The quickest and easiest way to get educated about the entire home buying process is to select a mortgage advisor and realtor who offer unbiased professional advice with your best interest in mind.
As we wrap on up these 7 steps, you may be wondering....
So, what's in it for you?
You can find ways to get out of the "trap" of paying rent.
You'll be confident that you made the right decisions about your mortgage.
You'll be at ease knowing that nobody rushed you into the wrong mortgage program because you had to apply for your mortgage within 3 days of signing your purchase agreement. Is 3 days long enough for you to make a decision that could last for up to 40 years?
Not too many real estate agents will teach you the information that I have just given you.
Your desire to own a home, combined with my knowledge, will increase your chances dramatically.
Lisette Amalfi Harris Mortgage Alliance o/a OAC Mortgages Inc
Senior Mortgage Consultant/Owner
Office: 905-529-1199
eMail: lharris@tmacc.com
Website www.mortgagealliance.ca/oacmortgages
P.S. More people who are renters now qualify to become a homeowner. Don't let fear or ignorance stand in your way. Our job is to educate and advise you. Call us today to take one step closer toward realizing your dream of one day becoming a homeowner.
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