Finance a home
When you’re ready to buy a home, it’s time to think about home financing. Your financial institution is the best place to get advice on the most appropriate way to finance your investment. In the meantime, use the following information to help you understand some important concepts.
Financing to buy a home
It is very rare that a home buyer can afford to pay for a property in full. For this reason, most home buyers need to qualify for a mortgage loan.
Get a mortgage pre-approval
A buyer can get a mortgage pre-approval to know how much loan he/she qualifies for.
Before beginning your house hunt, you should speak with your financial advisor to evaluate your financial situation. He or she will help you determine how much you qualify to borrow. This process is simple and can be done in a quick meeting with your advisor.
Using the pre-approval, you’ll know what price range to search in.
How to get a mortgage loan
Your mortgage is the amount your financial institution agrees to loan to you for the purchase of your property.
Before granting you a mortgage, the lender will check your financial background, your solvency, your ability to pay off the loan and the value of the property you want to buy. He or she will also require that you be able to pay the down payment.
One thing to keep in mind: your mortgage guarantee is the house itself. That means that if you do not meet your mortgage payments, the financial institution can seize the home and put it up for sale in order to pay off the loan.
Bank, credit union or mortgage broker?
Buyers can obtain mortgage loans through their financial institutions, or through a mortgage broker. To get the best interest rates and conditions possible, it is recommended that buyers compare several offers.
A mortgage broker can help a buyer in his/her research. The broker will help analyze the buyer’s financial situation and find a mortgage loan that is adapted to his/her needs.
The lender is responsible for the mortgage broker’s remuneration when the loan covers a house or a residential building.