Checklists aren’t just for picking up groceries… checklists are great for keeping you on track and on target for any process that involves many steps. A first time home buyer checklist is the most beneficial tool to get you through the home buying experience. Now, combine that checklist with a mortgage broker’s expertise and guidance, and you’ll breeze through the process with as little stress as possible. Canadian Mortgage Services has developed this first time home buyer checklist to help you plan and organize your first purchase:
1. Have you spoken to a broker?
Speak to a broker about pre-approving you, whether in writing or verbally. It’s important during this stage to be accurate and to provide as much detail as possible. It’s not about getting pre-approved for the amount you want, but more so for the amount you actually qualify for. You don’t want to influence numbers just for the time being only to find out at a later date that the debt servicing ratios are too high. Numbers don’t lie and being accurate will save you from having deal fall through and losing your deposit. This pre-approval will bring light to details such as; maximum loan amount, maximum purchase price, interest rate, down payment needed, duration of the pre-approval and any disclosures.
2. Have you found the home you want?
Once you’ve been pre-approved, you need to seek the home you want whether solo, or through a realtor. Once you find the home you want that fits the conditions of the pre-approval, it’s important to have a firm offer in place with ‘5 business days conditional financing’ before having your broker approach the banks. This conditional financing clause is your safety net in making sure you can get your deposit back in the event of financing being unsuccessful. Sure, even though you’ve been given a pre-approval, if circumstances have changed (credit, employment, etc.) it could have a bearing on whether the bank is still willing to commit.
3. Have you sent your broker the details of the purchase?
Once the offer is firm, send the P&S agreement and MLS listing (if applicable) immediately to your broker so they can send the deal off for a firm approval (commitment). Once the firm approval is given, and you are content with this approval, the conditional financing clause can be waived by your realtor thus solidifying the deal.
4. Have you signed the approval from the bank?
Sign the commitment/approval with your broker to ensure the rate can be held. Once the banks know that you agree to their approval, they will hold the rate until closing (typically 120 days). This step may be slightly different if you are buying a pre-construction that will not be ready for possession until later in the future.
5. Have you provided your broker with everything they need?
Collect all supporting documents needed to fulfil the commitment prior to funding. Your broker will let you know exactly what you need to provide to them as outlined in the bank’s commitment (ex. employment documents, recent tax documents, down payment confirmation, etc.) Your broker will also let you know the deadline for providing them this commitment
6. Have you booked the appraisal? (3-5 business days for the report to be completed)
If the bank requires an appraisal, your broker will let you know. If one is needed (depending on the type of deal), your broker will place the order from a list of acceptable appraisal companies as provided by the bank providing the mortgage. Make sure to schedule the appraisal and provide your broker with confirmation.
7. Have you signed the closing documents with your lawyer?
Lastly, once all the above steps are met, you will be required to schedule an appointment to sign the final closing documents with your lawyer prior to the scheduled closing date. Your lawyer will contact you to discuss what you need to bring (if anything) and a day and time to come in that works around your convenience. After signing at your lawyer’s office, your broker, lawyer and the bank will continue to communicate to facilitate the closing accordingly.
You’ll notice that this first time home buyer checklist is different than most. It doesn’t contain a list of supporting documents needed throughout the process, because the supporting documents requested by the bank change depending on employment status, nature of the business, job tenure, type of home, location, etc. Rather than provide you with a first time home buyer checklist that is too broad, we have created this checklist to outline the steps that are involved from start to finish, because it is these steps that involved much participation by each party involved. With the help of your broker, they will guide you through these steps with more specific details pertaining to documentation, timelines and sub-steps involved within each step.
Canadian Mortgage Services has had great success in using this first time home buyer checklist with its clients. Buying a home, especially for the first time, should be more enjoyable and exciting than it is stressful., and we’re sure that this checklist will ease the pain.
Questions? Contact us today for more information 905-455-5005