Pre-qualifying for a mortgage just one of many steps

Toronto Star story places emphasis on what first-time buyers need to know
Home hunters should be pre-approved for a mortgage at a dollar amount

By Mark Schadenberg

There's always lots of advice a Realtor can offer a first-time buyer, but explaining the entire process will always result in a lot more questions.

The Toronto Star recently published a story which covered topics like a buyer agency agreement, making sure you are pre-approved for a mortgage before offering and available government programs that could result in a rebate on the land transfer tax the next time you fill out your annual tax form.

Talking to various lending institutions is important as you must know where you are for TDS and GDS. If you are not sure about those terms, call me today for a coffee and conversation. My motto since beginning my full-time real estate career 15 years ago has always been: discussion, determination, direction and destination. The destination is receiving keys to your new home.

Pre-approval is important for six main reasons, in my honest opinion.

• You receive a guaranteed interest rate for 120 days. Our microscopic interest rates will not continue forever.
• You understand all the parameters about variable rates vs fixed rates, and the length of your mortgage, and how amortization works.
• Your Total Debt Service ratio and Gross Debt Service ratio have been calculated. Including principle, interest and taxes, how much can you afford per month, and keep in mind credit cards and car loans are factored in, and so are student loans and credit lines.
• You can honestly sit down and do your personal math about how much you would like to commit monthly to a home (budget time) as you may want to remain modest on your first home to leave more available dollars for a winter vacation, aluminium fishing boat, wedding bells or a bassinet.
• How does your planned down payment -- perhaps only 5 percent -- effect any CMHC insurance you will have to pay for your high-ratio mortgage.  
• No one wants to waste their time looking at homes you can't afford.

Tax Time

As for possible rebates or a tax credit on items such a land transfer tax, be sure to check out the links in the story below. Like everything else in the tax world there are limitations based on total income.

I enjoy the house-buying process – explaining conditions, closing costs such as land transfer tax and title insurance, and knowing why it is important you have a sales representative working for you. To have competent qualified experienced representation is priceless, but does require you to legally sign a buyer Agency agreement.

LINK:
http://www.thestar.com/life/homes/2014/06/27/the_first_3_questions_for_firsttime_buyers.html

Mark Schadenberg, Sales Representative

Senior Real Estate Specialist (SRES designation)

Royal LePage Triland Realty

757 Dundas St, Woodstock

(519) 537-1553, cell or text

Email: mschadenberg@rogers.com

Twitter: markroyallepage

Facebook: Mark Schadenberg, Royal LePage Triland

Discussion . . . Direction . . . Determination . . . Destination