Mortgage Shopping Made Easy
If you’re like most people, you probably feel like shopping for a mortgage can be about as much fun as getting a root canal. But it doesn’t have to be that way. Here are some basic steps you can take to ensure that you find a mortgage that works for you.
Meet with a bank or lender. They’ll ask you some questions that may point out some things you missed in your initial estimate, like liabilities – or assets you didn’t realize you had. Using all this information, they’ll give you a rough estimate of how much you can borrow. However, this informal process isn’t a guarantee or a pre-approval. It’s simply a way to help you gauge the properties you can afford and figure out if you’re ready to make this type of financial commitment.
Getting mortgage pre-approval is similar to pre-qualifying, but the result is an approval from a lender for a specific amount, locked into an interest rate for a period of time (normally 90 to 120 days).
Do the math
Now that you have an idea of how much you owe, gather up all of your information on your assets (your current home, investments, stocks, bonds, other properties) and add them up. Hint: it’s best when you own more than you owe. There are plenty of calculators online that will help you make sense of the numbers and give you a preliminary idea of the mortgage amount you qualify for.
Learn the lingo
Familiarize yourself with mortgage terms and options by doing your homework. Talk to your REALTOR®, ask friends and family and check out all the websites and articles that have this info about amortization periods, the benefits of fixed or variable rates and more – there are lots of them.
So there you have it—the simple steps to get you closer to a mortgage that not only works for you but also gets you into the home of your dreams.
Trademarks owned or controlled by The Canadian Real Estate Association. Used under licence.