Get Pre-Approved!

This is a very important step before you even starting to look for a home. Many people get excited about buying a home and want to start looking around as soon as possible. You may even hook up with a real estate agent and start considering different properties, but you need to know what you can afford before you get started. There is nothing worse than finding a home you want and not being able to afford it. Of course now you will have to look at lower priced homes and your enthusiasm fall like a rock because you are still thinking about all of those nicer homes.

Getting pre-approved not only helps you know what you can afford, but it also can save you a significant amount of interest. Most pre-approvals are good for 90-120 day rate hold. This means that you can hold the rate you have been pre-approved for this long. If the rates happen to go up and you end up buying a home in this time frame, then you are guaranteed the rate you were originally pre-approved for, not the higher rate at the time. Also, if rates happen to fall in this period, you will get the lower rate.

Getting pre-approved is a fast and easy process with no cost and no obligation. Although having a written pre-approval holds the rate for you, it is not guaranteeing you the mortgage. Once you have found a property and make an offer, the deal becomes live and will be sent in for approval. Final approval is based on satisfying special requirements like employment verification, down payment (if you have one) etc., so always make sure to put subject to financing in the mortgage contract just in case.


Make sure you deal with a professional who specializes in residential mortgages. The mortgage industry is extremely complicated with hundreds of options and choices. Using an expert can make the difference between getting into a home or your choice or having to rent forever and paying off someone else’s mortgage!

Avoid The Most Common Mortgage Obstacles

How To Avoid The Most Common Mortgage Obstacles
Buying a home should be a rewarding and enjoyable process, but only if you're prepared and know how to avoid the most common home financing mistakes.

● Get pre-approved
Pre-approvals are one of the easiest ways for home buyers to start off on the right foot. A pre-approval takes very little time and helps buyers establish a maximum spending limit. With that information, they can shop with confidence knowing what they can offer on a property. It isn’t necessary to use the whole pre-approved amount.

● Know how long things take
Some steps in the home-buying process can’t be rushed and others need to be researched in advance. For example, you should have a real estate agent, lawyer and mortgage lender well in advance of making an offer. And some documentation may take time to gather and prepare.

● Know your options
There are lots of mortgages, each with unique features. Investigate alternatives ahead of time so you don’t have to make a rush decision later. The pre-approval meeting is usually a good time to gather information and start exploring options.

● Come prepared
Ask your mortgage representative for a list of all the documentation you’ll need and plan to get it well in advance. For example, you’ll need confirmation of your income and down payment, the MLS® listing and more. You will also need a copy of the Agreement of Purchase and Sale.

● Ask for a list of closing costs
Closing costs are all the legal and administrative charges that accompany any real estate transaction. The most common are lawyer’s fees and land transfer taxes. And in some cases, home buyers are asked to reimburse the seller for prepaid property taxes or other household expenses.
- Courtesy of TD Canada Trust www.tdcanadatrust.com.

Mortgage "SMARTS" Can Save You Money

If you are shopping for a house, you may have heard of some new mortgage products on the market, with amortization periods of up to 30, 35 and 40 years. While they can mean an attractive smaller monthly payment, you should be aware of the potential consequences - such as the amount of interest you would have to pay, over the years.

Do the math and know your options before signing a mortgage contract

The Financial Consumer Agency of Canada (FCAC) recently released an update to its suite of on-line mortgage tools. FCAC's mortgage qualifier calculator and mortgage payment calculator are designed to help consumers determine, first, if they qualify for a mortgage - given their current income level and debt load
- and then how to calculate their optimum schedule of payments. FCAC's mortgage calculator can show you how many years and how much money you can save by making pre-payments on your mortgage.

These tools, together with the Agency's FCAC's on-line mortgage quiz and its publication The ABC's of Mortgages, can help you better understand your rights and responsibilities as a consumer, as well as the terms and conditions associated with the different mortgage products that are available.

Despite knowing the extra costs involved, you may still have a good reason to opt for a 30- or 40-year mortgage product. A longer amortization period may be the only way you can afford a house in today's expensive housing market. However, if you are thinking about a long-term mortgage, you should consider making accelerated bi-weekly payments. By doing so, you can save tens or even hundreds of thousands of dollars in interest over the years.

You can find more information on mortgages by consulting FCAC's Frequently Asked Questions (FAQ) database, which contains answers to a number of mortgage-related questions - from penalty calculations, to insurance products, to interest rates. To view the Frequently Asked Questions, visit the Agency's Web site at: www.fcac.gc.ca and go to the "For Consumers" section.

To obtain a free copy of The ABC's of Mortgages, call FCAC, toll-free, at:
1-866-461-3222 or visit their website at www.fcac.gc.ca.

FCAC is a federal government agency that protects consumers' rights and provides them with information about the financial products and services. - News Canada