You’ve saved up a down payment. You’ve scoured the House For Sale ads. You’ve even been to some open houses. You’re ready to buy a house. But have you secured your finances? Are they strong enough to support a mortgage? And will you even be approved for a mortgage…..more than likely the biggest loan you’ll ever apply for? Making sure your financial health is in tip top shape is paramount when considering moving.
First and foremost, save, save and save again. When people think about the costs involved in moving, they often concentrate on saving up for a down payment. While this is likely the largest lump sum of money required up front, there are plenty of other costs associated with moving that are often overlooked. Unless you have a large percentage of the house cost as a down payment, you will be charged CMHC fees. CMHC stands for Canadian Mortgage and Housing Corporation. Most buyers are subject to these added fees, as most of us don’t have much more than the required minimum down payment saved up. Also, there are lawyer’s fees, home inspections, moving company costs, reno costs on your new home and updates/ staging/ repairs on the home you are selling……and the list goes on. So the moral of the story is….save above and beyond your down payment and you will be fine!
Check your credit history. There are plenty of companies to help you discover what your current credit report and credit score are. TransUnion and Equifax and a couple of these companies. Before the financial institution / mortgage broker you’ve chosen decides to approve you for your new mortgage, an in depth credit history check is performed, so it’s good to have an idea of where you stand. If you discover your credit score isn’t all sunshine and roses, then consider improving it before heading to the bank. A great way to do this is to always make your credit card payments on time! Try to lower your balances while you’re at it by not purchasing large amounts on your credit cards. Small amounts charged, with on time payments, is what will help to make your credit history healthy.
Before your mortgage lender will hand over hundreds of thousands of dollars, they will require a confirmation of income. This can include paystubs, income tax notice of assessments, amongst other things. Having your paperwork in order makes applying for a mortgage quick and easy. Another thing- make sure you have your taxes up to date in advance of applying for a mortgage! If you owe money to the government, they can actually go into your accounts and take the money owed. So if you’ve scrimped and saved up a down payment, but owe in back taxes…….that down payment could be gone from your account. It would be devastating for this to happen if you’d found your dream home and ready to sign on the dotted line, only to find your down payment had disappeared. Pay your debts first!
Getting your finances in good shape for a move involves a lot of dedication and contentiousness. But before too long, with all your hard work, you’ll be well on your way to hiring Augusta movers to move you into your new home!