5 Steps to Home Ownership

Buying a home is the most important purchase you will make and should not be entered into lightly. Whether you are a first time buyer or have purchased homes in the past, these steps are beneficial in the home buying process.

Step 1: Contact a Mortgage Broker

A mortgage broker will guide you through the steps below and help get you ready for home ownership. A good mortgage broker, as well as a good Realtor, will guide through the process. Get yourself Pre-Qualified.

Step 2: Analyze & Correct your Credit

Your credit score is the determining factor for obtaining financing. Your credit score says a lot about you as it is your financial history. It contains all loan and credit card accounts, with account information such as date opened, credit limit or loan amount, balance and monthly payments. It will also include late payment, bankruptcies, liens and collections. Do you have established and positive credit? Your mortgage broker can help you determine where you are with you credit.

Step 3: Income

You must have a stable income with guaranteed hours per week. Your income has to be consistent. If you have just started a new job with a new company, chances are you are on probation with the employer. If that is the case, income for this job cannot be used to qualify you for a mortgage until the probation period has ended. Have you been pre-qualified a mortgage? Your mortgage broker can meet with you to determine purchasing needs.

Step 4: Down Payment/Closing Costs

Have you saved enough for your down payment as well as closing costs? Minimum down payment is 5% of the purchase price and closing costs (costs incurred by the lawyer to register the property in your name) are based on a percentage of the purchase price and are calculated 1.5% or higher. For example, on a purchase price of $200,000.00, your 5% down payment and 1.5% closing costs would require a minimum of $13,000.00 in order to move forward with that purchase.

Step 5: Create a budget for yourself

Just because you qualify for a mortgage of a certain amount, does not mean you need to max yourself out. Meet with your mortgage broker to run the numbers. Decide on a down payment amount and a monthly payment you are comfortable with and stay within that comfort zone. Remember there may be additional costs such as appraisals and home inspections.

Meet with you Mortgage Broker to determine if you are ready to move forward with the purchase of your new home. When ready, you will need a good Realtor to find you your dream home.

You, your Mortgage Broker and your Realtor are the 3 key elements in the process the will determine the outcome of your home ownership journey. Let us help you with this journey.

If you have any questions on how one of these items may affect you, please call me. It is important to get it right!