First Time Homebuyers

What To Expect When You’re Expecting Your First Home

If you’re wondering what it takes to own your first home, you’ve come to the right place!

Please watch THE ROAD TO HOME OWNERSHIP video below to learn about the process of becoming a homeowner...

With all First Time Home Buyers, we know how delicate the process is in finding out what it takes to purchase your first home. We specialize with First Time Home Buyers and take special care of your needs - starting with explaining the abc’s of the process and qualifying... ALL the way to taking possession of your first home. It really IS an exciting time!

Discover your potential by making an appointment or applying online below!

The purpose of this pamphlet is to provide you hopefully with useful information, and add some insight to the expectations of owning your FIRST home!

Who are we?
Let’s start out by disclosing what a mortgage associate does. The definition of a mortgage associate is this: “An intermediary who matches the needs of a borrower with the requirements of a lender. A mortgage associate is usually able to negotiate more favorable rates and terms on your behalf.” Read on and we’ll go through the process together…

Expect Stress? Not me…
As a first time home buyer, everyone has their own idea of what to expect. Usually, the first on the list of expectations is excitement. Eventually, feelings of “stress” may enter the arena of emotions. Well, the good AND bad news is, you’re right! Unfortunately it’s a fact of life. The largest investment of your life is typically filled with at least a LITTLE bit of stress – this I won’t deny. If you can picture 5000 butterflies in a 10 by10 sized room, fluttering all over the place - this may be what your thought process becomes like when you decide you’re ready to purchase your first home. Most of us are this way. How do you “net” those thoughts? And when they’re caught, how do you put those thoughts into actions? What is the process? If you’re like many others, you will have likely ventured out on the internet, referral from friends and family, and have read some books on finance to fill your head full of mortgage “stuff”. There’s typically one main problem with that – there’s too much information that may not be relevant to your situation, therefore, you’re ingesting what turns out to be useless information! This can very easily create MORE stress for you. One meeting with a mortgage associate may not alleviate ALL of your questions, but it’s a terrific starting point.

Mortgage associates, like ourselves, should be your very first step in the process, and can also be the very best source of relieving some of your stresses. Our role is to not only provide you with the best interest rates, but we are also in place to assist and explain every step in the process so that we can progress onto the next part of the transaction with as little stress as possible. Let’s face it, the more you know about what’s involved for YOU – the better prepared you’ll be! The whole process is divided into “steps of progression” until you physically pick up and move into your newly owned home.

I’m a good listener…
The beginning of the process is what I like to refer to as the information sharing session. And just as like any purchase that you make, you’re going to want to be comfortable with the people you’re working with. From the realtor, to the mortgage agent, to the moving company - your questions and concerns need to be taken care of. The initial session between you and your mortgage associate will likely have you answering many questions about some personal questions such as; your income, your credit history, and your social insurance number. Your SIN number is required so that we can pull your credit bureau from Equifax.

*The stage will be set for you to ask questions along the way!!*

I’m done listening, what can you do for me???
Once we have your income and your credit history, we can start working with numbers to see what kind of purchasing power you possess. We’ll look at each criterion and determine what type of lender we can use from that point forward. We’ll get into what different types of lenders have to offer to different kinds of borrowers, but first – let’s look at the importance of the credit bureau!

The five “C’s” of Credit - Character, Capacity, Capital, Credit, and Collateral.

YOUR CREDIT - Credit is one aspect in life that makes the world go around. Without it, your purchasing power is weakened. Your credit bureau tells a story. It tells a story of how you manage your credit; your past, right up until the present. Your bureau has a long memory and will tell all to everyone you give permission to look at it. It states your name, birthdate, address, employers, and it will give a history of who has pulled your credit. It will also tell what your balances are on the credit trade lines that you possess, as well as your limits. But rest assured, it will tell if you’ve been late on a payment! It will tell if you’ve been discharged from bankruptcy, have collections, or have judgments against you. The credit bureau is an integral piece of information to a lender because it will determine if you have the character, capacity, capital, conditions, and collateral within to obtain financing for a home.

YOUR EMPLOYMENT – Yet another constant in the mortgage loan; you must have an income! Whether you’re a salaried employee, contracted, hourly, seasonal, commissioned, or Business for self – there are lenders out there that will tailor there mortgage guidelines around your situation.

YOUR DOWNPAYMENT – Sometimes your down payment is important to what type of mortgage that you’re eligible for. We’ll take a quick look at the different types of lenders that we have access to next!

Over 30 lenders to choose from – where to start?!

Yes, we have a plethora of lenders to choose from, but it really is something quite different than throwing your mortgage application out to as many lenders as possible to see which one “sticks”. For example, there are a handful of lenders that won’t look at applicants with a previous bankruptcy in their histories. Alternatively, there are lenders that will specialize in those kinds of applicants. There is somewhat of a science in determining just WHERE to send your mortgage application to. It is also true that we deal with most major financial institutions that you are aware of; TD, Bank of Montreal, Alberta Treasury Branch, Scotia, etc. But what about all the other lenders – who are they? The other lenders are comprised of different Credit Unions and Trust Companies that are backed by major investors, and they usually have a “niche” in the mortgage market that allows them to target certain mortgage applicants. Some dedicate their mortgages to people with good income but bruised credit, some to good credit but hard to prove income, and some are for hard to prove income with very bruised credit!

It is only when we have a full application filled out, and a credit bureau in our hands that we can determine what your best mortgage “fit” will be.

I’m going shopping…
Hang on…you’re likely going to need a physical hard copy of your pre-approval of a mortgage before a realtor will want to spend anytime taking you out shopping – so let’s get that nailed down first. After we have our information sharing session, pulled your credit, discussed what your down payment intentions are, and figured out which lender is best suited for you, the mortgage associate will request a pre-approval for you (if it’s from a lender that provides “pre-approvals”). This usually takes anywhere from 1 – 2 days depending on how busy the banks are. Once it comes through, it is given to you to view. Usually, there are questions that will arise when viewing this document, because it is not until then when you’re truly exposed to the bank terms...sometimes they’re confusing. Not only that but perhaps you want to discuss the terms that you see on the mortgage. In most cases, there is plenty of time to change your wishes to the pre-approval such as your payment frequency, amortization, etc. We’re here to answer those questions!

Not until you’re comfortable with the pre-approval and the conditions set out within the document, should you set a date with a realtor to shopping for your home. If your realtor has questions – by all means, get them to call us to discuss any questions that they have as well.

…NOW I’M SHOPPING!

It’s PERFECT!

It was time to go shopping, and you found it! It’s in your price range, and you’ve fallen in love with it. If you’ve reached this point, the realtor will advise you to submit your offer on the property. This is where you will be exposed to the contract called the “offer to purchase”. It may take a short while for the realtor to negotiate the price you want and the items within the property (if there is any; such as the dishwasher, microwave, stove, etc.). Once the price and terms are agreed upon between you and the seller of the property, you will submit your offer with a CONDITION TO FINANCE. This is a very important condition to recognize within the purchase agreement. Let me explain…

So far, the bank has decided to offer you a mortgage based only on the information they have received about you. At this point, they haven’t verified any of the information like: your employment (by way of letter of employment from your employer, a paystub, and a verbal verification via phone call to your employer), your down payment (if any), and they haven’t verified the property you’re purchasing until they get the purchase agreement. The condition of finance date is set within the purchase contract, and it protects you against losing your down payment on the house until the bank has verified everything we’ve told them thus far! It usually takes about 5 – 7 days to have the bank verify all documents, but again, it depends on how fast they receive everything. So, it’s always a good idea to get as much documentation together at the PRE-APPROVAL stage. You will be required to supply an appraisal to the lender ONLY if you are coming in with 20% down or more for MOST lenders. If this is the case, we’ll need to make the provisions for enough time to get an appraiser in and out of the property – and enough time for the appraiser to provide the appraisal report to the lender. This usually only requires a few days. Once the lender has verified that all documentation is acceptable to them, they will relay a message to us, the mortgage associate - where in turn we will advise you that you are clear to waive your conditions to financing, and a huge “congratulations” goes out to you! NOW it’s time to get excited…but you’re not done QUITE yet…

Now I have to move, right?
Well, yes – and no. After you clear your condition to finance, there are some “behind the scenes” duties that have to be done so that you can close the mortgage, and take possession ON TIME! Once all the signatures and documentation are in place, it’s up to the lender to package your legal mortgage documents to your real estate lawyer. Yes, you will need a lawyer because they are the ones that will register your name at land titles, disburse your down payment to the proper party, and correspond with the lender to make sure that they advance the funds required to close your mortgage. The cost for this is approximately $800 - $1000 for this professional service. The lawyer will contact you before taking possession so that they can get your signature on the legal papers, and go over any questions you may have about the legal part of the mortgage.

Home stretch…
Now is an advisable time to set out your plans for “moving day”.

About 6-8 weeks before moving:		A few days before moving:
	Reserve a rental truck (or a group of friends and family who own trucks!)		Complete any packing not yet done
	Stock up on packing supplies – tape, boxes, bubble wrap, blankets, markers, etc.		Place important documents in a safe box that you will carry. Mark “Do Not Move” on the box. Move this box yourself
	Clean out closets, basement and garage. Have a yard sale or donate unneeded items to charity		Prepare an “open first box” with basic kitchen and bathroom supplies, towels, bedding and hammer, screwdriver to set up furniture.
	Advise post office of new address and effective date
	Send change of address to: Telephone company, insurance company, bank and credit card companies, subscription companies (magazines, etc.), hydro, cable, arrange to transfer your household insurance to your new home, arrange to have utilities disconnected (gas, cable, phone, hydro, security system)

About 2-4 weeks in advance:		Moving Day:
	Stop or transfer newspaper and other home deliveries		Check all rooms and closets to make sure that nothing is left behind
	Obtain veterinarian records for pets		Turn down the thermostat
	Reserve elevator if moving from an apartment or TO an apartment		Leave labeled keys with the landlord, solicitor or real estate agent
	Defrost freezer		Check that you have keys to every lock in your new home
	Obtain school, medical, and dental records (if moving to another town or city, or if you’re proximity restricts you to having to move these things)		Make sure the utilities are on and working properly in your new home
			Show the movers where to put boxes and furniture
			Unpack your “open first” box
	REMEMBER – You may need to arrange for any extra time that you may require away from work!		Set up your bed; unpack the kitchen and bathroom to help you feel at home!

		AFTER you move:
			Change your driver’s license address and your car insurance.

Hopefully you’ve found some useful information within these words, but I’m sure there will be more information, questions, and concerns that surface throughout the process.

Perhaps I’ve spawned some questions that you didn’t expect to have BEFORE you started reading this! Don’t worry…that’s part of the “stress” we talked about.

But hopefully this gives you synapses of what to expect when you’re expecting your first home!

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Canadian Mortgage Experts - Canada First
Dan & Stacey Mass
Calgary, Alberta
Direct: 403-650-6596

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