Top 4 Things To Consider When Getting A Mortgage
We recently had a chance to chat with Tyler Wilson at Pilot Mortgage Group all about what to consider when getting a mortgage.
At West Haven Group, we talk a lot about the search for the right property and the importance of working with an excellent real estate agent, but it is just as essential to have a solid mortgage professional. Without the right financing in place, your dream home just isn’t going to come to fruition.
For today’s article, we will be focusing on first-time homebuyers—but stay tuned for a follow-up on refinancing! Below we cover the top four things Tyler recommends when it comes to getting a mortgage for the first time.
1 – Set a realistic budget
The first step of getting into real estate is deciding what you can afford. It is crucial that you think about your own budget prior to reaching out to a mortgage professional or a real estate agent. Many people want to be told what they can afford, but no one knows you and your lifestyle as you do. Do you like to travel, eat out often, shop for all the latest trends? You need to identify what your monthly spending habits are and decide if you are willing to change these for the right property.
It is common to become fixated on the maximum amount you qualify for but this amount is not necessarily what you actually want, or are able, to spend on a monthly basis. It’s important to remember that there will be property taxes, utilities, and most likely strata fees in addition to your monthly mortgage payment.
A good mortgage professional will ask these questions upfront so it is helpful to have your answers ready to get on the same page with what your needs are.
2- Find a mortgage professional you trust
When you are looking to acquire a property, you want to find a great mortgage professional. Ideally, you want someone who focuses only on mortgages, rather than a multitude of financial areas, and someone that has access to a variety of options. A mortgage broker, such as Tyler and his colleagues at Pilot Mortgage Group, are examples of this as they focus solely on mortgages and have access, and most importantly knowledge, on a variety of different options as opposed to someone who works at a bank and therefore only has access to that one financial institution.
You should try to find this person through someone you trust—recommendations make for the best professional relationships. Make sure you do your homework as they will ultimately be responsible for securing and locking in your financing.
Tyler told us that brokers are often referred to as the Quarterback of real estate as they are in charge of dealing with the lender, realtor, and lawyer –and although we aren’t known to use sports analogies at West Haven Group, we agree that this description is accurate. Brokers are responsible for getting your property deal past the finish line…or should we say goal posts?! Either way, a lot of experience is important.
3 – Have a timeline in mind
There are two different timelines to consider—your timeline to buy a property and your life timeline.
Let’s start with your timeline to buy a property. It is important to understand the process it takes to qualify for a mortgage and then be actually approved once you’ve found the right property.
Pilot Mortgage Group offers a clear process that sets out the following steps and estimated time for each so you know exactly what to expect:
Complete Introduction Form (2 min)
- Provide Financial Application (10 min)
- Gather and Provide your supporting paperwork (20 min)
- Complete your Mortgage Consultation (30 min-1 hour)
- Receive your Certificate of Pre-Approval
- Choose a lender to work with (10 min)
- Review your approval paperwork with your Broker (15-45 min)
- Close your Purchase with your elected Legal Professional
You should be ready to buy within the next 120 days before you get a pre-approval as that is how long that rate will last—and you will have to requalify again if it expires.
Next up – it is also vital to know what your life plan is. Are you going to be happy to live in this property for five years or do you think you’ll want to upgrade sooner? Are you a couple with two incomes but planning to start a family soon so may have either a maternity or paternity leave coming up? What’s your risk tolerance in terms of interest rates fluctuating? A good broker will walk you through all of those questions before presenting the options that are best suited to you.
Be ready to close the deal
As discussed above, it’s important that you’re ready to ready to purchase a property within four months once you start talking to a mortgage professional—particularly when you are in a hot market like right now. You need to be fully prepared to go into multiple offer situations and you, therefore, need to have all of your financing prepared and ready to go.
There is a lot of pressure on buyers to have very short subject removal time periods (three days or less) or even go subject-free. It is crucial that you are working with an excellent realtor that you trust explicitly so you aren’t exposing yourself to unnecessary risk – and if you do decide to take some risks, that you are well educated and have done all the necessary due diligence.
Remember – just because you are preapproved does not guarantee to finance, it is dependent on the property itself and the banks’ appraisal of its worth.
Working with a fantastic real estate agent will help put you in a competitive sport, even with subjects, by being calculated in the offer.
Want to learn more?
Pilot Mortgage Group offers some incredibly helpful yet easy-to-digest videos series for First Home Buyers, Move-Up Buys, and Refinancing—so basically any type of purchase you can think of.
Having the honour of being recognized in the top 1% of realtors in Greater Vancouver, we only work with the best, and the team working at Pilot Mortgage Group truly are the best—we can’t recommend them enough. And don’t hesitate to get in touch with us to help realize your real estate goals!