Canmore Home Search – 6 things you should know as a buyer
If you are a like a majority of the Canadian population, when it comes to buying a home, you are likely going to rely on financing and working with a mortgage lender. Many people tend to feel overwhelmed at the process of understanding zoning, choosing a lender, interest rates, and the process of buying a home in general. With the right agent by your side (i.e. Devin Stephens), and with the right information in hand, you shouldn’t be worried about the process. Consider these five factors when purchasing, to ensure you find the lowest rates, and the right lender for your mortgage needs.
1.Canmore has 4 different zoning bylaws which can be tricky to navigate through. Understanding which areas you should buy in to match your utilization goals is step #1 in starting the hunt for your home. For an overview of the bylaws, please visit my zoning blog: http://canmoreabhomes.com/canmore-zoning-decoded/
2. How much does it cost? –
Understanding the true cost of home ownership is the initial phase of purchasing a home. Your ownership costs consist of 4 major categories which are: the principal, interest rates, taxes, and insurance. Your mortgage payment is made up of the principal and interest rates; interest will pay borrower fees while the principal amount pays down the overall balance due on the home. Amortization calculators come in handy when calculating ownership costs.
Property taxes in Canmore are valued on a Mill Rate. The rate for 2015 is 5.16698.To calculate property tax, multiply the assessed value of your property by the ‘Total Mill Rate’/1000. If you have a mortgage, homeowner’s insurance is typically required as well. Prices range from about $700 up to $1200 depending on the home’s value, and level of coverage you choose. For planned unit developments (PUD) or condos, there might be PITI insurance requirements as well. Homeowner association dues cover upkeep and maintenance, and general building or development amenities. Costs range from $100 to $1000 (if you are in a PUD, arrange for your own future maintenance costs).
3. Know your history –
Credit history plays a major role when lenders are determining interest rates. Lenders want individuals who have a strong credit history, pay bills on time, and have a high score; so, do your own research and know your score before applying. If you have a strong credit history this is great; otherwise, consider applying for a few lines of credit. Also note this will drop the score a few points, but after a few months of consistent, on time payments, it will go right back up. By law, you can get a free credit report. Do so, review it, and find ways to increase your score. From there, you can decide when the time is right to apply for a mortgage.
4. What’s your budget & personal timeline? –
You already know your monthly income, expenses, and general costs of purchases you make. So, you can somewhat budget for the amount you can set aside for a mortgage payment each month off of these figures. But, to choose the right loan, you should consider how long you plan on living in the home you wish to buy. With a 30 year, fixed mortgage loan,, you don’t expect your income to grow, or circumstances to change much; if this is the case, you can plan accordingly for the long run.
CMHC insured loans are great for individuals who don’t have 20% to put down on a home; with these options, as little as 5% will allow you to buy a home. In addition to this, you still have monthly mortgage and PITI rates to calculate. An online mortgage calculator can help you get an idea of what your monthly costs of ownership will be.
5. Getting advanced approval –
Being pre-approved is something which will almost certainly guarantee you approval from a lender. If you do all the research and aren’t pre-approve before applying, it may result in disappointment if you end up being denied by a lender. Most lenders will require you to show that you are pre-approved before they even consider lending you money for a home; since it is a competitive market, a pre-approval letter may be required prior to obtaining financing.
6. What you need –
Not all lenders have the same requirements in place. So, before applying, make sure you know what a particular lender’s requirements for approval are. Full name and address, the number of children and dependents, your social security number, income, bank statements, divorce records, and several other documents may be required by a particular lender.
When applying , lenders will give you a checklist of all documents required; make sure you follow it and provide all records to ensure approval, and to ensure no delays in the process. If a lender only asks for a couple pay stubs, don’t send more or less (this can result in denial or may slow down the entire process). Only provide information requested of you, and make sure all documents are accurate and up to date.
You know what you need, and how the application process works. Now, do a bit more research on the process of home ownership, and be prepared for the application process when applying for your home purchase mortgage.