An important ingredient in a successful home search is knowing how much you can afford before you start to look. In most cases, the bank will usually provide a maximum value for you.
Get a Mortgage Pre-Approval. This is a document from your bank or other lender stating how much of a mortgage they are willing to give you. There are several advantages to getting this pre-approval:
- It gives you the peace-of-mind of knowing you can act on certain homes.
- Is required by agents to to start viewing more than one home.
- May be provided to sellers to give you the edge when making an offer.
- serious, prepared buyers will also have at least $1,000 to 10,000 available as a deposit.
You can arrange for a Mortgage Pre-Approval with your bank or other lender, the ones from banks are usually more robust. Light approvals generally give a general figure, if you make a complete and more extensive application the approval letter is usually guaranteed for 90 days up to 9 months.
The value you are pre-approved for does not mean that you can buy anything. Often Stratas and MFH will only be recognized as an amount “much less” than what has been stated. Call me to discuss as this range can vary greatly depending on many factors applicable in a transaction. For example, the “type” of home or even “area” can limit your buying choices.
Not all lenders are created equal. Achieving financing can be done by a bank or a broker and some homes may be not be eligible (some older MFH, certain 55+ products and resort properties) for purchase this way. However, there are other creative ways of achieving lending such as utilizing a line of credit or other alternative lending options if you desire. If you need a recommendation of a reputable lender, please contact me.
As this is the best way to streamline and assure a purchase please note that most offers will need to show that you have access to funds. In some MFH parks, you may have to provide a strong credit score. The industry actually does not handle actual cash but this category is monitored by the BCFSA.