Tips from a Mortgage Broker

Trisha Isaac, Canmore Mortgage Solutions

Mortgage Financing: If you’re thinking of buying, ensure that you are pre-approved with your lender. While this sounds obvious, it is amazing the amount of people who leave this out. This means you’re scrambling at the last minute to find documents that may already be packed.

Begin working with a mortgage broker right away who can help you get pre-approved. They will also help with navigating the new mortgage rules that have dramatically changed mortgage lending last several years. For example, did you know you have to requalify with your lender to port your mortgage?

It’s common to hear, “but I was approved for my first home without this,” when going through the pre-approval process today. However, higher qualifying rates and more supporting documents are the norm of 2021.

Factor in Additional Closing Costs: Alongside determining your down payment, you need to consider your additional closing costs associated with buying and selling. There are the legal fees for the sale and purchase, Realtor commissions, potential mortgage penalties, tax and condo fee adjustments, and moving costs. The best advice here is to be conservative. There may also be an option to lump some extra money on your mortgage after closing.

Bridge Financing: If possible, ask your mortgage broker or lender for bridge financing. Bridge financing allows you some time to move into your new home before the sale of your existing home. For example, if part of your down payment is dependent on the sale of your home, bridge financing could be put in place so you can take possession of your new home while your current home sale is finalized.

Buying and selling on the same day is stressful! There are many things that can delay closing, even with a perfect file. It’s never fun to have movers sitting outside your new home on closing date when a delay occurs. Bridge financing also give you time if you need to bring in painters or cleaners to touch up your new home. This cost is minimal compared to the stress of same day closings.

Set reasonable transaction timelines with your Realtor: There are many moving pieces when negotiating your purchase and sale closing dates. Work with a Realtor who will guide you through this process and always give yourself more time than you need. It’s tempting to move quickly, but it’s hard to change closing dates once they are in a contract.

And finally, be thoughtful and proactive on your plans with travel during your transaction. Let your mortgage broker, lender, and Realtor know if you have to travel and where they can reach you so you’re not missing any deadlines.

 

Tips from a Realtor

Chezlene Kocian, ReMax Alpine Realty

Prep your home ahead of time: Declutter your home and have any small repairs and routine maintenance done ahead of time. It’s also a good idea to work with your Realtor and have your home photographed and professionally measured in advance of listing time so that you can capture the property on a day with good weather.

Typically, when you reach the stage of an accepted offer on your future home, contractually, you will only have a few days to have your existing property listed for sale. You can save yourself a lot of stress having all the required maintenance and repairs done before this period, and not fret if the weather isn’t cooperating.

Seller’s Conditions: These are very important with the sale of your current home, if the property you’re in the process of purchasing has a “Sale of Buyer’s Home” condition.

Selling conditions are like your security blanket. It’s essential you’re protected with a carefully worded seller’s condition on the purchase contract for your existing home, so you don’t end up homeless.

Discussing all possible scenarios with your Realtor will help you determine the right timing of meeting these conditions. For example, it’s beneficial to negotiate 72 hours notice rather than 48 hours notice with your “Sale of Buyer’s Home” condition. This will give you an extra day to secure financing without the sale of your home, which is extremely helpful if you’re served notice on a Friday afternoon.

There are pros and cons to whether to wait to list your home for sale until you have an accepted offer on a property or list your home for sale while you’re on your house hunt.

Which choice is right for you comes down to talking with your Realtor and mortgage broker. They’ll help you make the best choice for both your personal situation, as well as the best decision for what the current market is like. Regardless of which option you choose, being prepared is fundamental in making the process as stress-free as possible.