Would-be home buyers on Vancouver Island are frustrated.
As far as prospective houses go, there’s not a lot of inventory to choose from. And what’s out there is getting snatched up almost immediately, thanks to pent-up demand and record low interest rates.
But as a potential home buyer, there are some important things you can do in preparation so that you’re able to act quickly when the right home comes along. These first steps include:
- Establishing a good relationship with a trusted realtor. Find one who understands exactly what and where you’re looking for, and commit to getting in touch with them regularly.
- Joining community Facebook groups in your choice neighbourhood. This can help uncover house leads and other untapped opportunities before they become “public.”
- Connecting with a lending expert to get pre-approved for a mortgage. Although it’s not a 100% guarantee that you’ll receive the intended amount, it will nevertheless help inform your home buying journey. Read on to find out why.
Why you need to consider a mortgage pre-approval
This is a game-changing item because it puts you in a position where you can look with confidence for a home, knowing also that the interest rate can be held for you for a set time while you look. It can also give focus to the house hunt, since now you’ll only be looking for homes in your approved price point. Plus, a pre-approval gives you some much needed breathing room in the mad dash that is home buying. By getting pre-approved in the beginning, you’ll end up having important ducks in a row when it matters most.
So now you know some of the key benefits of having a mortgage pre-approval. Here are some other important things to keep in mind:
- You might hear the term “stress test” during the pre-approval process. This is simply a calculation your lender does to ensure you can handle the projected mortgage if interest rates were to rise. Mortgage stress tests were big in the news recently, as the required base rate to follow has already been lowered three times since March. Theoretically, this makes it easier to qualify for a touch larger mortgage amount, which can in turn help broaden your search.
- Your credit report will most likely be pulled. With your consent, your lender will look into your credit history. Some mortgage hopefuls find it helpful to order a copy of their report for themselves first so that they’re fully aware of what’s in it (this does not affect your credit score). Equifax and TransUnion Canada will allow you to order your copy for free, but keep in mind that it will come to you in the mail.
- There will be documents involved! Many lending professionals agree this is where valuable time can be lost if the hopeful homebuyer doesn’t have their info at the ready. Now’s the time to gather the items that will show your lender how much mortgage debt you can support. Information includes your pay stub, your most recent Notice of Assessment from the CRA and account statements to show what other assets or debts you have.
Whatever preemptive steps you take, congratulate yourself on taking them, as they’ll get you that much closer to your new home. These steps require action, and it’s the things we can do when a lot is out of our control that will help build confidence, determination and optimism. Here’s to enduring the home buying journey!