Buying a Home
There is a lot to know about buying a home, especially if it is your first. At GBK Financial, we will help you every step of the way.
Step One – Get Qualified
It is very important to feel comfortable about the mortgage you will be taking on when you buy your home. We will work with you to pre-qualify you with a lender so that you will feel ready to shop for a home. Please keep in mind that most lenders consider a pre-approval to be just a rate hold. Once you have decided on the home you wish to purchase, only then will the lender do a full credit analysis on you. GBK Financial strongly advises that you make any offer on a home conditional on both financing and a home inspection.
Just because you may qualify for a certain mortgage amount, that doesn’t mean that you have to get a mortgage that size. The best thing you can do is sit down and figure out what you believe you can comfortably spend each month on your mortgage payment. Buying a home means a lot of monthly expenses that you may not have had before, and you need to consider these as you draft a budget. You will need to pay for all utilities, home insurance, property taxes and condo fees (if that is what you buy). You should also set aside some funds each month for property maintenance. For instance, you will probably need a new roof, or a furnace, one day.
If this is your first home, chances are that you will need to spend some money shortly after you take possession on items such as a lawn mower, gardening tools, window coverings or furniture. Of course, there are also moving costs, and you will probably want to change the locks. All of these are good reasons not to sink every dollar you have saved into your purchase – you will need some funds after closing for items such as these.
In order to provide us with all the information necessary to qualify you properly, you need to collect some documents together for us:
- Two most recent pay stubs
- Letter of employment (including your position, salary, and start date)
- Proof of your down payment and closing costs (closing costs are generally considered to be equal to 1 1/2% of the purchase price of the home) – this can be in the form of 3 months history of bank statements showing an accumulation of the funds, or an investment statement, or a copy of the purchase and sale of your existing home if you are using those funds towards the new purchase
Step Two – Find Your Home
Take your time, and don’t get discouraged! There is a house out there, somewhere, for you. If you are working with a realtor whom you trust, this will be a fun experience. We can provide you with some suggestions of realtors we have worked with in the past whom we believe will always take care of their clients. If you are shopping for a home that is in a realistic price range for you, then you will enjoy the experience more than someone who is anxious in the back of their mind about their potential monthly payments.
Step Three – Put in an Offer
Even though you have a pre-approval, we strongly encourage you to include a financing condition for 5 days and a home inspection condition in your offer. In the case of a real estate market where multiple offers come in on a property, this might mean that you pressured to make an unconditional offer. Conditions can mean that your offer is declined in favour of one that had none. We cannot assert enough that we do not believe this is in your best interests. Be prepared for the possibility that you will not get the home you are bidding on. But there will be another, and everyone finds a home they are happy with int he end; it might just take some patience! Wouldn’t you prefer to be able to walk away from a home that turns out to have termites than realize that because you didn’t put conditions on the offer, you now own that very home?
Step Four – Waive your Conditions
The sellers have accepted your offer! Congratulations! Now you have a few days to have the inspection done, and finalize the mortgage. You need to send a clear copy of the Agreement of Purchase and Sale to us right away. If your copy has been faxed back and forth, and cannot be easily read, have your real estate agent produce a clear, unsigned copy for you (they do this all the time) to include along with the signed copy.
When we receive this, we will quickly turn around your deal at the bank. Please make sure that we are able to reach you for any extra documents or details that the bank may request. We will need to meet with you in the next day or two so that you can sign your mortgage commitment and related documents. It is important that you do not waive your financing condition until we tell you that your mortgage has been given a ‘broker complete’ by the lender.
In the meantime, your real estate agent will help to arrange the home inspection for you. You need to be there while it is happening; plan for about 3 hours – you will be given the full report right on the spot.
Step Five – The Lawyer’s Appointment
Although you have already signed a set of documents with us, you still need to see your lawyer to sign the legal mortgage documents for the registered mortgage. you will be asked to bring a void cheque for the account you will be using for the mortgage payments, two pieces of identification (including at least one issued by the government with your photograph), and a certified cheque to cover the final costs of the deal. Your lawyer will have given you that figure, and explained everything that it covers.
Roughly, the closing costs for the deal include (but are not restricted to) your share of the Property Tax bill for the year, the legal fees, interest adjustments, title insurance, home/fire insurance, tax holdbacks, the balance of the down payment, and any land transfer taxes that apply.
Step Six – Closing Day
Congratulations! You are now the owner of your own home. You will get a call at some point from your lawyer or your real estate agent letting you know that the deal has closed, and giving you directions on how to get the keys to the house.
Contact us today!
Please call us at 1-888-830-9276, or email email@example.com You can also use our on-line application form. We look forward to speaking with you.