Mortgage Pre-Approval: What Lenders Want To Know

A mortgage pre-approval is an important first step in the home-buying process. Having a pre-approval in hand tells you how much you can spend on a home, and it locks in the current low interest rate for up to 120 days, so you can shop the market knowing you’re insulated from rate hikes in the near future. If the rate drops, your lender should honour the new lower mortgage rate when you’re ready to make your purchase.

The amount that a financial institution is willing to lend for a mortgage depends on a number of factors. Your lender will check your financial standing to determine how much you can borrow, how much you can afford, and which loans might be best-suited to your specific circumstances. Applying for a mortgage requires a written application and supporting documentation, and it can be a slightly intimidating process. Here are three things lenders will want to know before giving you a mortgage pre-approval.

3 Requirements for a Mortgage Pre-Approval

The lender will check your credit score.
Knowing your credit score will give lenders an inside look at your credit habits and history and will help them decide if you’re a good candidate for a loan. You’ll be ranked on a scale of 300-900. Your rating gauges your financial health and indicates the level of risk you present to the lender. High scores are good news, and will typically secure a better mortgage rate, since you post a lower risk of defaulting on your mortgage payments.

The lender will check your employment history.
Lenders will ask for a list of your past employers, how long you’ve been with your current employer, and what your annual salary or take-home pay is. They want to make sure you consistently earn money with no major gaps in income, and that you can make regular mortgage payments over the long-term.

The lender will check your assets and debts.
Be prepared to show your past income tax records, recent bank statements and current debt amounts, including credit card balances, car loan, student loan or line of credit. Lenders want to know your debt-to-income ratio to determine if you can make each loan payment based on the income you earn and your other financial obligations. The lender will also require proof of your down payment.

Many lenders offer a mortgage pre-approval online, so the process is simple. Find a mortgage lender that you’re comfortable with. Have more questions about the home-buying process, or ready to move forward with your purchase? Contact me today!

 

 

Source: RE/MAX Blog

5 Reasons Why You Should Get Pre-Approved for a Mortgage

Buying a home for the first time is an exciting experience. One of the most significant ways to limit unnecessary anxiety is to get pre-approved for a mortgage before you begin your house-hunting adventure.

To put it simply, being pre-approved for a mortgage means that a lender says you have qualified to borrow a specific amount of money for the purchase of a home. Pre-approval is based on various factors, and the process involves several different steps.

As the borrower, you can shop around for mortgages and compare options from different lenders. Throughout this process, you will learn the maximum amount of mortgage you qualify for and the estimated mortgage payments on the amount borrowed, while locking in an interest rate for up to 130 days from the date of the pre-approval.

On the lender side of the process, they will look at your financial circumstances including your income-to-debt ratio, credit score and financial history. The lender uses all these factors to assess your borrowing risk and determine the amount of mortgage, interest rate and terms you’ll qualify for. It is important to note that the mortgage pre-approval process does not guarantee you will be approved for a mortgage.

5 Reasons to Get Pre-Approved for a Mortgage Before You Begin Your Home Hunt

1. You’ll Have an Idea of How Much Money You Have to Work With 

Buying a home is a significant investment of your money and time. This time investment only increases as competition in the housing market rises. This is precisely why having a mortgage pre-approval is essential before starting your search. By beginning the process with the knowledge of just how much money you can spend, you can keep your search realistic and give your real estate agent an appropriate price range.

Being well prepared with realistic expectations and a clear price range will save you time, eliminating homes that are out of your reach financially. You’ll also be able to give your real estate agent the information they need to find you a home that fits both your desired specifications and your budget.

2.Your Scope of Search Will be Narrowed

Knowing how much mortgage you can afford will narrow your search considerably. It will also give you a more realistic idea of what the market has for you. Perhaps the home of your dreams isn’t in the cards just yet based on your pre-approval, but maybe you can afford to buy a home that you can renovate and put back on the market at a higher price in a few years.

Being aware of your buying power before starting your hunt will cross any homes you cannot afford off your list.

3. You Become a More Competitive Buyer

In some areas, you could be competing for the same home with dozens of other potential buyers. Time is of the essence when the market is hot, and competitiveness is high. During the time it would take you to ask a lender if you can afford a home, that home will be snatched up by another buyer who already has their pre-approval in hand.

4. You Become a More Desirable Buyer

When the market is tight, and there are competing offers on a home, the prospective buyer who makes a firm offer is more likely to win over someone who doesn’t.

5. It May Shorten Your Closing Period 

The closing process on the house starts with securing financing for the home. The process itself can take almost two months from start to finish. By already having your financing pre-approved, you can move on to the next step in the closing process.

As you begin your journey on purchasing either your first or your next home, getting pre-approved for a mortgage should be your first step to make the home buying process smoother.

 

Source: RE/MAX Blog

10 Tips for Getting the Best Mortgage Rate in Canada

When you purchase a home, a down payment is typically applied to the purchase price, and the balance is to be paid off over your term of the mortgage. The loan you receive from a lender in order to pay for the house is called a mortgage.

Simply put, a mortgage is a legal and binding agreement between a lender and a borrower for a specific amount of money that must be paid back within a predefined amount of time.

10 tips to help you get the best mortgage rate in Canada

  1. Research Mortgage Interest Rates

There is no one-size-fits-all approach to getting a mortgage. There are a few different types of mortgages, each of which will impact the interest rate you receive, based on a few of the factors we will be touching on later.

By knowing your credit score before speaking with a professional, you can be sure to get the appropriate interest rate.

  1. Decrease Your Debt-to-Income Ratio

A simple way to get the best mortgage rate in Canada is to decrease your debt-service ratio. This represents the percentage of your gross monthly income used to pay off your debts. Lenders use this value to assess the risk you carry when borrowing money.

To decrease this ratio, make larger payments on your debts, reduce debt by purchasing only what you can afford in cash, or increase your income. By decreasing your debt-to-income ratio, you signal to lenders that you are less of a risk.

  1. Improve Your Credit Score

Improving your credit score takes time, but it can be done. Some easy ways to accomplish this are to make larger payments on your outstanding credit card bills, pay off any collections that may be on your credit report, get caught up on all your bills, and keep outstanding balances on credit cards low.

  1. Increase Your Income Stability

Income stability signals to a lender that you’re less likely to default on your mortgage. First, sit down and run an honest assessment on how much money you bring in every month versus how much you spend, to improve your income stability. Then, look for ways to spend less and earn more. This can be accomplished by cutting out frivolous expenses, asking for more hours at work or taking on a side hustle.

  1. Gather Your Employment History

Before meeting with a mortgage lender, gathering your employment history is key. Mortgages are large loans, and lenders want to know that you are serious about paying them back and are a low risk for default on your payments. Compiling your employment history shows the lender that you have a track record of gainful employment and are unlikely to be unemployed in the foreseeable future.

  1. Save More and Increase Your Down Payment

By contributing a larger down payment, you can reduce the size of your mortgage and attract a more favourable interest rate. Typically, if your down payment is greater than 20 per cent, you will receive a better interest rate than if you put down only five per cent.

  1. Use Cash Reserves

Lenders will look at your savings account to ensure you have enough cash in reserve to cover your mortgage in case of job loss. They like to see a few months worth of mortgage payments tucked away in your bank account. This also shows lenders that you are suitable and fiscally responsible. Consider saving up three or four months worth of mortgage payments to get a more favourable mortgage rate.

  1. Consider Interest Rates

Currently, interest rates are exceptionally low. Consider timing the purchase of your home during a time when interests rates are lower, to reduce your monthly payments and the interest paid over the lifetime of your loan.

  1. Low- Versus High-Ratio Mortgages

If you have less than 20 per cent as a down payment on the home you plan to purchase, you’ll need mortgage loan insurance. This serves as an added layer of security for lenders, should you default on your loan. This fee can be paid up-front or added to your monthly payments. To avoid this expense, save up at least 20 per cent for your down payment.

  1. Shop Around

Finally, once you have completed all the steps above to get the best mortgage rate, it is essential to shop around. Some lenders can give you a better borrowing rate than others, and it is vital to know all the options available to you before you commit to one of the most significant investments you’ll make in your lifetime.

Finally, consider working with a mortgage broker. This is a third-party intermediary between the lender and the borrower. A mortgage broker will collect your financial information and “shop around” for you, to find the best mortgage rate and terms from their pool of lenders. And the best part? A mortgage broker’s services don’t cost the borrower a thing.

Sources:

Canada.ca

Forbes

Home Renovations That Buyers Want, According to Agents

What are the home renovations that buyers want to see on the market? It’s a great question, and one you’ve likely pored over if you’re preparing to list your home for sale in the near future, or you’re embarking on a renovation with a thought to long-term resale value.

Despite the trend of renovating for personal use and enjoyment, 59% of Canadians said they always consider the return on investment that a renovation will have on their home’s overall market value. From the homebuyer’s perspective, certain renovations are more in-demand than others.

So, what are the best home improvements to sell your home quicker and for top dollar? According to a survey of RE/MAX brokers across Canada, below is a list of what homebuyers want most.

 

6 HOME RENOVATIONS THAT BUYERS WANT

 

#1 Kitchen

93.5% of RE/MAX brokers surveyed said kitchen renovations are most sought-after by homebuyers. The kitchen is typically the most complicated room in the home to renovate, and the most expensive. Depending on the age and condition of the home, kitchen updates can range from a complete gut job, to updates such as refacing or repainting cabinets, new hardware and appliances, countertop, backsplash and flooring.

 

#2 Bathroom

64.5% of RE/MAX brokers said new or updated bathrooms are in high demand by homebuyers. 

 

#3 Flooring

48.4% of RE/MAX brokers identified new flooring as a hot selling feature on the resale market. Depending on the size of the home and the scope of work being done, flooring would typically cost less than a kitchen and bathroom reno, but this is a great way to refresh the home, especially when paired with a fresh coat of paint.

 

#4 Paint

35.5% of RE/MAX brokers said buyers want a fresh coat of paint. This is a relatively simple and low-budget upgrade that makes a big impact on the look and feel of a property.

 

#5 Finished Basement

22.6% of brokers identified basement renovations as a huge selling feature on the resale market. Quite simply, if it increases the usable square footage of the home, that’s a good thing in homebuyers’ books.

 

#6 Outdoors & Landscaping

19.4% of RE/MAX brokers said homebuyers are setting their sights on the great outdoors with landscaping and outdoor features becoming a popular “must-have” item.

 

Source: RE/MAX Blog

Scents To Sell A House

Can a Scent Sell A House?

Can scents sell a house? It might seem like a bit of a superstitious question until you turn it on it’s head. Instead of asking if a good scent would sell a house, ask yourself “would I buy a house that smelled bad?”. 

Depending on the home in question (and the market you were buying in), it might not stop you from buying but it definitely wouldn’t help. Where the wrong scent could discourage buyers from spending any time at your open house, the right scent could quickly make them feel at home (more on that later). 

The Venn Diagram of Scent and Emotion

Sense of smell is found throughout the animal kingdom and has influenced our emotions and behaviour for thousands of years (back when I would have been showing my homo-erectus buyers a cave instead of a 3 bedroom 2 bath). Not only have certain scents been found to arouse emotions like hunger (think baked bread), scientists have done studies that showed the mix of light and scent can actually lower people’s blood pressures, reduce their heart rate and improve their mood. 

Buying a home is an incredibly big decision for buyers and in that way, can be emotional. Scent is a key part in creating an atmosphere that makes potential buyers feel at-ease and at-home in your open house. This increases your chances of selling your home quickly (if you’re lucky,  even at above your asking price). 

Clean is Key

Before I dive into the scents that help to sell a house, we need to talk about the bad scents to avoid. Plain and simple, these are the dirty scents: mould, mildew, smoke, pet dander, septic. 

I’ve heard stories of enthusiastic buyers who were all but ready to move in to listing they saw online. When they booked their viewing with the selling agent, they were hit with the scent of mouldy carpeting as soon as they walked through the door.  It was enough to change their minds and walk away. This was a missed opportunity for the seller who could have replaced the carpet and got himself a sale that day. 

The rule on this is simple: first, get things clean and then work on your ‘signature’ scent (a scented candle is no match for an unkempt pet room). Concentrate first on doing a deep clean in the areas where scents tend to linger – bathroom, kitchens, or any area where work might have been previously done. Then move onto the rest of the house. 

Once you’ve completed a good deep clean, avoid doing any really harsh cleaning in the days leading up to your home staging and open home. Just as dirty scents can affect prospective buyers’ moods, so too can a house that scents ‘too clean’. 

You know what I mean: walking into a room where there’s a strong scent of bleach or other cleaning products can give an eerie, Dexter-like vibe that’s not exactly prime for putting buyers at-ease. If you have to do some deeper cleaning closer to a showing, I recommend diluting some of your strong disinfectants or using less-scenty alternatives like baking soda.

 

Best scents to Sell a House

Now that we’ve covered the bad, let’s move into the good scents in your home. 

Personally, I’ve always been a fan of simple scents that don’t overpower the atmosphere and instead, simply add to it. Your home’s scent should reinforce the overall feeling of your home. Warm nostalgic scents like fresh-baked bread or baked goods (like cinnamon or vanilla) work incredibly well in comfy family-style homes. 

Selling something a little more modern? Natural, fresh scents like jasmine, pine or citrus can give your space a clean, almost zen like atmosphere. In fact, a study in 2010 found that the scent of jasmine has an almost valium-like effect on our anxiety.  

 

How to Subtly Add Scent to Your Home 

Building on the atmosphere of your home without overpowering it should be top of mind when considering how to ‘scent’ your home for staging. Subtle candles, quality aroma oils, or the real thing (baked cookies or bread) create a calm atmosphere. Conversely, using artificial scents, like the strong masking smell of Febreeze, can cause buyers to be suspicious that the homeowner is trying to cover up the smell of a bigger problem (mould, plumbing issues, etc). 

Whatever scent you choose, first deal with the dirty and then find something that smells good and simply adds to but doesn’t overpower the overall feeling of your home. Taking that thoughtfulness and effort in staging will help you sell quickly for the best price.  Curious about how to stage and present your North Okanagan home for the best price? Start with your free online home evaluation now >

The Latest Options in Outdoor Lighting

Outdoor lighting has come a long way from the days of patio lanterns and strings of lightbulbs. These days, there’s an exhaustive array of options available to illuminate your outdoor space, and make it more appealing and comfortable, particularly in the evenings.

Here are just a few ideas:

• Solar garden lights. These lights are on stakes that can be easily
inserted throughout the garden. Powered by the sun, they generate enough energy to cast a soft, pleasant glow along walkways or in flower beds in the evenings.

• Deck post lights. These are easy to install because they’re designed to sit on top of a standard 4×4 wood deck post. Most are solar powered.

• Street-style lamps. As the name implies, these look similar to old fashioned street lamps. Installation is a little more complex, but still DIY-friendly. They’re eye-catching and have a dramatic impact on the look of your outdoor space.

• Portable lantern lights. These are outdoor lights that are portable and often made to look like a decorative fixture for a coffee table or side table. They can be placed anywhere.

• LED walkway lights. These are small lights that fit neatly and almost invisibly under stairs and around walkways. Walkway lights not only look good but also improve safety. Most are battery powered.

• Planter lights. This is one of the most interesting options. Each one is both a flower pot and a light in one! The pot itself is translucent which allows the light inside to shine through.

Design experts say you should treat your outdoor space as you would any room in your home. Lighting it up for evening comfort and enjoyment is a good place to start.

DIY-Friendly Bathroom Makeovers

Want to make your bathroom look fantastic without having to do a major renovation? There are a lot of projects you can do yourself. In fact, there are some improvements you can get done in less than a day that will transform the look and feel of your bathroom. Check out these ideas:

• Update the sink. If you have some basic plumbing knowledge, this is a project you should be able to do on your own. A new sink can make the entire vanity look like new.

• Buy new decor. New shower curtains, towels, window coverings,
mats, etc. can transform the look of a bathroom.

• Install new hardware. Replacing cabinet hardware may not seem like much of a change. However, it can have a surprisingly big impact. Shiny new hardware is like jewelry. It stands out.

• Replace the vanity mirror. Even if there are no scratches, an older mirror is like an old pair of glasses. It can become foggy. No amount of cleaning will make it any clearer. When ordering a replacement mirror, be sure that your measurements are exact.

• Paint. There’s no doubt about it. A fresh coat of paint makes any room look better. These bathroom improvement projects can make a huge impact on the look of your bathroom. And, they can all be done affordably and in just a day or two.

What to Fix Up in your Home Before You Sell

If you have a home that is overdue for a renovation, you might be worried that it will be difficult to sell as a “fixer-upper”. In fact, you might delay listing your property for that reason.

The good news is, you don’t need to fix up everything in your home to prepare it for sale. You can be selective and choose only those projects that are most likely to help your home show well and sell quickly.

Here are some projects to consider:

  • Repairs. Few things stand out more during a viewing than something in obvious need of repair. That includes minor issues, like a dripping bathroom faucet, as well as major concerns, such as the central air conditioning unit not working. Get these repairs done.
  • Painting. Painting is one of the easiest and most affordable DIY projects you can do. Yet the impact it can have on your home is stunning. Some rooms are completely transformed by a fresh coat of paint.
  • Kitchens & Bathrooms. Buyers love to see great looking kitchens and bathrooms. In fact, there are even magazines devoted just to those rooms! You don’t necessarily need to do a major renovation of these spaces, but a makeover can be a good idea. Consider replacing sinks, countertops, and/or cabinet hardware.
  • Floors. If the floors in any of your rooms have become worn and unsightly, look at options for refreshing them. Consider replacing carpeting, refinishing hardwood, and/or getting tiles professionally cleaned and polished.
  • Outdoors. Sometimes you can compensate (a little) for a less-than-ideal interior by sprucing up the outdoor space. Explore ways to improve your deck or patio, walkways, and landscaping.

Even if your home is older, you can make it more attractive to buyers with any one of these projects.

Want more ideas for finding eager buyers for your home? Call today.

Beyond Boxes: Handy Packing Materials for your Move

As you can probably guess, when you’re preparing to move, you’ll need boxes and tape — and, perhaps some bubble-wrap or old newspapers to use as protective wrapping for delicate items.

But that may not be all you need. Take a look at this list and see if you’ll want any of these on hand while you’re packing or on moving day.

  • Colour markers for labeling boxes. (Tip: Colour coding boxes by room will make unpacking much easier.)
  • Stretch wrap to protect larger items that can’t fit into a box.
  • Small plastic bags to store dis-assembled parts, such as sofa legs, cabinet hardware, etc. (You don’t want to lose them!)
  • Moving blankets to protect floors.
  • A dolly or hand truck to move heavy items. (You can rent these.)
  • Mattress moving bag. This helps prevent stains and tears during your move. You can also buy specialty bags for sofas and tables.
  • Reusable foam furniture sliders, to protect floors when furniture needs to be pushed into place.
  • Foam corner protectors. This prevents furniture with sharp corners from banging and damaging other items during a move.

 

Planning ahead and having the right packing materials on hand will make your move less stressful and, hopefully, damage-free!

 

 

Easy Ways to Stage Your Home

Ideally you should have a week or two available before you list your property in order to stage your home and make it look its best for buyers. But, what if you listed quickly and within hours of the For Sale sign going up a buyer wants to view your property? In that scenario, you need to do some quick “staging” to get your home ready. Let’s assume your property is already clean and tidy. Here are some other things you can do:

· Open the curtains, even at night. This will make each room seem brighter, more appealing and more spacious.
· Pull out some boxes or storage bins. Put away personal knick-knacks (like that bowling trophy) and other personal items to reduce clutter on shelves and countertops.
· Clear countertops in the kitchen and bathrooms. Put the old toaster oven out-of-sight.
· Make sure lighting throughout the house is bright and comfortable. In darker areas, plug in a lamp.
· Clear away as much as you can in the foyer. Make that space look open, uncluttered and welcoming.
· Move cars out of the driveway. Give the buyer a convenient place to park!
· Make the beds. Fluff pillows on sofas.
· Clear away as many items as possible from the closet floors (such as shoes.)
· Open a window and air out the kitchen, especially if you just finished cooking.
· Make sure your pet is in a crate or, if possible, out for a walk. Not everyone loves pets.

These staging tips take only a few minutes each, but can make a big difference in the impression your home makes on a buyer. Want more home selling advice? Call today.