Some may be looking to buy their first home and not know about the common requirements and initial challenges they may face. Canadian residents may need prepare themselves beforehand, learning how to best position themselves to have a seller accept their offer and move toward closing on a home. What do new potential homeowners need to know?
Understand more about common home buying processes and challenges faced by Canadian buyers today.
Your Credit Score and the Canadian Home Mortgage Process
Most buyers are not paying for a home in cash and will have to seek a home mortgage loan from a lender. It is important to know your credit score as this is a major factor in getting approved for a loan and getting better rates. One's credit score and credit history offers insights to lenders about a potential borrower's ability to make regular payments, their current state of debt and any history of defaulting on a previous loan. Potential borrowers can request a free credit report. Potential borrowers with a poor credit score may take steps to improve their credit rating by addressing inaccuracies and paying down debt, making it more likely that they would be approved by a lender when the time comes to buy a home.
In a seller's market, buyers are at a disadvantage and may need to work harder to be selected by a seller. Being pre-approved for a home mortgage loan is one way to stand out and demonstrate serious intentions in regards to buying a home. Potential buyers and those with a poor credit scores should begin to work on improving their credit score as early as possible, as it can take time to see the changes reflected on a credit report.
Canadian Real Estate Clauses and the Closing Process
Prospective buyers need to know that once they are selected by a seller and are under contract, there may be a number of actions that may need to be done within certain stated timeframes. Canadian real estate contingencies can be included in a contract when an offer is made and can stipulate the period in which an inspection may occur or that sellers may continue to show the home and potentially get additional offers during a certain period of time. These clauses protect both buyers and sellers.
Those who want to buy a home soon and already own a home may need to list their home for sale a significant time prior to looking for a new home. Certain settlement clauses are included in contracts to help protect buyers from potentially carrying two mortgages. It is important to speak to a reputable local agent to understand more about common real estate clauses and prepare oneself for the process of closing on a home.
Budget for the Home Buying Process
There are many expenses that go along with buying a new home, such as paying for an inspection, filing fees, associated moving costs and making an earnest money deposit. This means that those looking to buy a home need to be aware how much they can afford to pay on a home and how much they will need to set aside for common expenses and in the case of potential delays. Speak with potential Coventry Hills home lenders and a trusted agent to get a better idea of how to budget for the home buying process.