How to Find and Finance Your Dream Home

Let’s face it. The first time we do something, we aren’t sure what the next step is. Here is a simplistic 14-step overview of what you are going to encounter in the house buying process, and what to expect to happen next.

1. Start with a Pre-Approval, just so that you do not waste your time & your realtor’s time looking at houses that you can’t afford. Spend 30 minutes on the phone with your mortgage agent to complete this step. A Pre-Approval is intended to give you an approximate limit on the amount of mortgage you could qualify for. More importantly, it reserves an interest rate for you, so that you can make an Offer-to-Purchase, knowing what kind of mortgage payment you will face.

2. Within 24 hours, your mortgage agent should confirm your Pre-Approval status. Knowing that you have been Pre-Approved, you can now meet with your realtor to go over the various characteristics you want your house to have (bedrooms, garage, fireplace, etc).

3. Once you and your realtor are on the same page, you are now ready to head out with your realtor to find the house of your dreams. Your realtor will provide professional guidance to help you find a house that meets your needs, which neighbourhoods to avoid, etc.

4. Once you have found the house, your realtor will then negotiate a satisfactory sales price with the vendor. You should expect to pay slightly less than the asking price. Be cautious about getting into a bidding war and paying more than the house is really worth.

5. If you have any plans of doing major renovations to your new home, discuss your plans with your realtor and your mortgage agent. You do not want to buy something and then find out that either the City will not allow the changes, or you cannot obtain financing to make the upgrades that you want.

6. Your realtor will then provide the signed Purchase & Sale Agreement and the MLS listing to your mortgage agent. You will normally have 5 business days to finalize your mortgage details.

7. The mortgage agent will then update your mortgage application with the specifics about the house you are buying, and find a lender who will commit to lending you the money you require.

8. The lender issues a “Commitment”, in which they stipulate the terms and conditions of their offer to fund your mortgage.

9. You then sign that Commitment and provide the required documentation to the mortgage agent, who packages it into an electronic file and sends it to the bank.

10. Once the bank staff review and accept your documentation, they will contact the mortgage agent and confirm that the bank accepts the documentation. Your mortgage agent will advise you of this acceptance.

11. Once your mortgage agent confirms the banks’ acceptance of your documentation, you can then sign your financing Waiver (assuming you have that clause in your Purchase & Sale Agreement).

12. Once all of the conditions of your offer have been completed (required documents accepted by the bank, financing condition waiver signed, home inspection waiver signed, etc), you know that you now have a legal contract with the seller, and that the house will be yours on your closing date.

13. The next thing you are likely to encounter is a call from your lawyer asking you to come in to his office (usually a few days prior to closing) with a certified cheque covering the rest of your down payment and the closing costs. You then sign the final mortgage documents at the lawyer’s desk and wait for the day of closing.

14. On the closing day, you will receive a call from the lawyer’s office telling you that you can come and pick up the keys to your new home.

Congratulations! You can now begin the task of moving in and making those finishing touches that turn your house into your home.