You have your mortgage pre-qualification – congratulations! You’re on your way to becoming a homeowner. However, there’s still lots to do after your pre-qualification. Even though this is a significant step in the home buying process, your journey is far from over. What do you have left to do?
The buying process has so many steps that it can be hard to keep track of everything you need to do, and in what order. Luckily, we’ve created a checklist to help you stay on track! Here’s everything you need to complete now that you have your pre-qualification.
Find a real estate agent
You won’t get too far into the home buying process without a real estate agent. True, you can technically enter the market without one, but we don’t recommend it. Most sellers want to work with buyers who have an agent on their side. This gives the seller assurance they are working with a serious buyer who also has a professional guide. In fact, in a market this competitive, sellers may not even consider your offer if you don’t have an agent.
Apart from helping build your credibility for sellers, realtors are a huge help for you. They can help you decide on the right type of property within your budget, as well as submit offers. Realtors take a large amount of work and stress away from you as a buyer. If you don’t know where to look for an agent, feel free to ask me for recommendations! As a broker, I have worked with several realtors, and know which ones might be right for you.
Find a home
For many buyers, finding a home is the main event. Good news: After your pre-qualification, it’s finally time to start looking! With the help of your real estate agent, you should narrow down your search to specific property types, neighbourhoods, and budgets. There’s no point looking at homes that you can’t afford or aren’t within your location range. Since the market is busy, you’ll want to secure your home as soon as possible, which means focusing on the homes you truly want. Plus, your pre-qualification only applies for a certain amount of financing. Trying to buy a home over your budget might mean you won’t be approved for a mortgage, even after your pre-qualification.
Get a home inspection
Part of making sure your dream home is perfect is ensuring it can pass a home inspection. You don’t want to go through the trouble of buying a home only to find out it has major issues with the foundation or plumbing, for example. A home inspector will check everything in the home, from safety concerns to things like pests, plumbing, or mold issues. The results of a home inspection can do one of two things. It will either confirm your interest in the home, prompting you to proceed with an offer, or allow you to walk away. It’s best to find out if a home has issues now, before you lose thousands of dollars on repairs later.
Commit to a lender
Remember, you don’t have to commit to the lender who gave you your rate hold. There are lots of lenders and products out there, and it’s okay to look around to make sure you can find the best product for you. Discuss your options with a broker, and allow them to help you find the best lender after your pre-qualification. Brokers are excellent resources for this part of the process, because they are highly connected with lenders. Plus, they might be able to secure you a better product or rate than you could have found on your own.
Make an offer
Once you’ve found the home you want, it’s time to make an offer! This can be a stressful experience, but with the help of a broker and your real estate agent, it should go fairly smoothly. Your real estate agent can help you determine what a realistic offer is, to maximize your odds of being accepted without totally blowing your budget. Plus, your offer will need to match up with the appraisal value for a mortgage (more on that later). If your offer is accepted, this is when you’ll need to secure your mortgage financing through a final approval.
Submit a mortgage application
A pre-qualification doesn’t guarantee you a mortgage, so you still need to complete a mortgage application once you’re ready to buy a home you want. The good news is that when you got your pre-qualification, the broker took most of the information they needed, so completing the application now won’t be as much work. Your broker already has your employment and income information, but they might need updated information and extra documentation for the mortgage process. Lenders will also want to see a purchase agreement. As long as your financial situation remains the same and your housing offer is sound, your mortgage application is likely to be approved.
Don’t change your finances
As we mentioned, a key part of getting your mortgage approved is maintaining the same financial situation after your pre-qualification. Do your best to keep everything about your finances the same throughout the entire process. This means not changing jobs, taking out new loans, getting new credit cards, or anything that might alter your income. A broker pre-qualified you based on your situation at the time, and if you experience a loss in income or new debts, this might make a lender reevaluate how much they will finance for your mortgage.
Get a mortgage appraisal
Most lenders will require a home appraisal before granting you a mortgage if your mortgage doesn’t require default insurance. An appraiser will give an objective estimate of the home’s value based on comparable sales, meaning they are not involved with the buyer or the seller. The home needs to appraise for the purchase price, otherwise your mortgage approval may need to be amended. If the home is not worth the value for which you have offered, you may be left to cover the difference between the appraisal value and purchase price, as lenders won’t finance a home beyond its worth.
Once you complete these steps after your pre-qualification, you’re on your way to moving into your new home! While it’s a lengthy process, it’s also a rewarding one. Buying a home can be a stressful experience, but following these steps will ensure you have the smoothest journey possible.
If you have any questions about buying a home, get in touch with me!