It cannot be overemphasized - it is so important to
arrange for a "pre-approved mortgage" prior to commencing your housing
search. This serves two purposes:
- you know how much you can afford
- it avoids delays in finalizing your financing when
you find the right house to buy
The best place to start is with your own bank or financial
institution. There are other options available to you:
- Bank, trust company, financial institution - you
arrange a meeting with those lenders individually. If you have a trusted relationship
with your own financial advisor, then you should see them first.
Some institutions have "Mortgage Specialists" who are mobile mortgage
sales people and will arrange a convenient time and place to meet you. They tend
to work 7 days a week and take day or evening appointments to suit your time schedule.
There is usually no additional cost to you.
- Mortgage brokers - like insurance brokers, mortgage
brokers shop the market and arrange the most favourable rate and terms for you.
Like Mortgage Specialists, there is usually no application fee or set up cost
for this service.
Mortgage brokers also have contacts with private lenders should you require additional
assistance or have had financial problems in the past. They can be quite skilled
in putting together a mortgage financing package for you. There is a set up /
application fee to arrange for private financing or for unusual financing circumstances.
- Assuming an existing mortgage - some Purchasers prefer
to assume an existing mortgage on the property. This is only done when the rate
of interest is lower than that which they can obtain out in the market or when
the terms are more favourable than they can obtain out in the market. In a low
interest rate environment, existing mortgages are very rarely assumed.
Most financial institutions must approve you before
they will allow the mortgage to be assumed.
After you have been pre-approved for a mortgage, you
can confidently look for houses within your price range. At the point when you
have found the home that fits your requirements that you wish to buy, the following
is a list of other steps you need to take:
- Advise your lender that you have purchased a home
(usually conditional upon mortgage financing). Provide them with a copy of your
offer to purchase. can provide them with a copy of the listing from the MLS system
if they require it. Tell your lender how many days you have to arrange mortgage
financing (7 - 14 days is quite standard) based on the financing condition in
your offer.
- Ask your lender if there is any other information
you may need to get to them. When you were pre-approved, you would have provided
the bulk of the information at that time.
- Provide your lender with the name of your lawyer.
- When everything has been approved, you will receive
written confirmation of the approval. Written confirmation will take the form
of an "approval certificate", "terms letter", or "approval
letter" (three names that mean the same thing!). A copy of this can be faxed
to Annette's office.
- Annette's office will prepare a
"Waiver" form for your signature to "waive" your condition
on financing. Everything in real estate must be in writing; the Waiver form is
the means to communicate to the Vendor that you have satisfied yourself as to
obtaining financing on the property. The Waiver is then immediately delivered
by Annette to the Vendor.
- Annette will be there for you on an
ongoing basis to answer any of your questions.
