Mortgage basics for beginners

18 Aug Mortgage basics for beginners

Buying a home is one of the biggest emotional and financial decisions you’ll ever make, so it’s important to prepare yourself to make a knowledgeable decision. The mortgage process can be a smooth and almost uneventful process, or an unnerving one. Either way, a great deal depends on preparation and we are here to help you understand the mortgage basics. Before getting started here are some things for you to consider:

1) Should you buy or rent?

Although buying a home almost always seems like a great idea, it is important to understand what homeownership involves. Of course, being a homeowner is something to be proud of but it also means having to invest money, time and energy. So, before you decide to buy a home, make sure you’re ready. It will be important for you to weigh the pros of financial security, flexibility, and stability against the cons of financial stress, maintenance, and added responsibility. While you probably have a lot of good reasons for wanting to buy a home, you also have to consider your reasons for not wanting to.

2) Are you financially ready?

So, you’ve decided that homeownership is right for you. Now you need to determine if you are financially ready to buy a house. There are a number of simple calculations that you can do to evaluate your current financial situation including calculating your net worth, your current monthly expenses and your current monthly debt payments. Knowing your net worth is important because you will need this information when you discuss a mortgage with your lender. Your net worth is the amount left over once you’ve subtracted your total liabilities from your total assets. It will also give you a snapshot of your current financial situation and show you how much you can afford to put as a down payment.

3) What professionals should you call on?

Purchasing a home can be one of the biggest investments you will ever make, so you’ll definitely want a team of professionals working with you throughout the process. This can include realtors, lawyers, insurance brokers, home inspectors and more (depending on the particular circumstance). Of course when it comes to getting financing to purchase a home, working with a mortgage broker is extremely valuable. Remember that many different institutions lend money for mortgages, such as banks, trust companies, credit unions, and more. It’s a good idea to shop around and speak with more than one lender because terms and options will vary. This is where a mortgage broker comes in handy because mortgage brokers have access to multiple lenders but they don’t work for any specific lending institution. Their role is to find the lender with the terms and rates that will best suit the buyer.

4) The application process

It’s important to make sure you have the required information to get started. Certain documents are needed to complete the transaction so be sure to have all the required documentation in order to finalize your mortgage faster. We’ve compiled some helpful financing reference guides that can be used checklists. A pre‐approved mortgage certificate is not a guarantee of being approved for the mortgage loan. Even if you have a pre‐approved mortgage certificate, you must still meet your lender during the conditional offer period to get a final mortgage approval. For more detail

Getting a mortgage is often one the largest financial commitment a person makes in their lifetime. Mortgages can come with many benefits but, since they are a financial product and a large financial commitment, there will always be risks. That’s why it’s important to know your mortgage risks & responsibilities. If you do use a mortgage broker, we can help you better understand these risks and how they may relate to you personally. Brokers have experience working with banks and other lenders. We understand the benefits of the various rate options, and are familiar with the many types of mortgages and which one might be right for you.

DO YOU HAVE QUESTIONS ABOUT THE MORTGAGE PROCESS? FIND OUR HOW WORKING WITH A MORTGAGE BROKER CAN BENEFIT YOU – CONTACT JOHN ANTLE MORTGAGES IN KELOWNA TODAY.