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For those of you who are inquiring on the proper process for your house hunting needs,
read on. The home buying system depends on several factors: The first thing one should do before contemplating purchasing a house is to analyze one's credit. You may think that your credit is good, but the mortgage system calls for a lender to access your credit bureau file. Why not access your own file just to see what is reported, then you can know that your credit is indeed perfect, or less than perfect, as the case may be. Occasionally something gets reported on your file that is wrong or requires an explanation. Better to know this before you apply for that mortgage. To access your credit bureau file, you can call the Ottawa-Hull Credit Bureau and ask for a "Consumer Interview". You will be given an appointment and asked to bring picture I.D. with you. The Credit Bureau will explain your file to you and give you a copy of the report. The next step is to get pre-approved for your mortgage. The pre-approval process demands that you apply with a lender or a mortgage broker. The purpose of the pre-approval process is twofold. The first reason is to guarantee the interest rate for a period of time, usually 90 days. If the rates go up during that period, you will get the promised rate; if the rates go down during the period, you will be granted the lower rate. The second reason for the pre-approval is to see if you can be approved by the mortgage system, and to what level. Some caution is warranted here. Most lending institutions only do a cursory (minimum) check at this time. The reason for only a minimal check is that this lender may never see you again. You may have decided not to buy, or perhaps you chose to deal elsewhere. Why should the lender spend time of your file (time is money) if you decide not to deal there? At this stage of the process, verification of income and down payment may not be required, and therefore these two important factors have not been entered into the equation. You should not attempt to get pre-approved at more than one place, because every time a lender accesses your credit bureau file, your credit point totals decline due to each inquiry. Never take for granted that you can get a mortgage until after the property has been chosen, and after the lender of choice has given you a "mortgage commitment". If you are new to employment, or if you are on a contract basis, or if you are self-employed, or if your income has gone up drastically in the last year, you should volunteer that information at the onset to the loans officer, or mortgage broker, in order to curtail future problems. If your down payment is not straight cash savings, or RRSP funds, you should volunteer the source of down payment to the lender at the pre-approval stage, in order to avoid problems later on. For proving down payment and employment, you may refer to my website under "Sun Articles" Now comes the task of choosing the property. Unless you have all the money in cash, you will probably require a mortgage, therefore, you must think of the property as if you require the approval of the lending institution. The lending institution, in turn, thinks only of what happens if the loan goes bad. If you choice is to buy a home in the "boonies", or a "fixer-upper", you may find some reluctance from the lending community to accommodate your request for mortgage financing. No matter where or what the property will be, never put in an offer without some kind of property qualification, such as: "this offer is conditional upon satisfactory financing". That clause can prevent lawsuits later on. The process of finding your new home is probably facilitated by usage of a Real Estate Agent. In most cases, the Realtor's commission is paid by the Vendor of the property. The home buying process should be an exciting time in your life, however, unless you can fit the lending mold exactly, it could also be a real nightmare. |