While you may dream of owning a home in Markham, there are many steps — some more complex and time-consuming than others — to make it happen. One of the most challenging and often stressful for many potential buyers is qualifying and receiving a mortgage. Here is what you need to know to purchase a home in Markham.
1. Know Your Credit Score
Your credit score is one of the most important factors when purchasing a home. This number tells lenders if you are a risk or if they can confidently lend you a large sum of money to purchase a home in Markham. While there is no set number to receive a home loan, generally individuals with a score of less than 600 are disqualified. Keep in mind that your credit score will affect your interest rate. The higher your score, the better your interest rate will be.
If you currently have a low credit score, a few ways to improve it include:
- Pay off all current debt, particularly credit card debt.
- Pay all bills on time.
- Review and evaluate your credit report. Claim any errors you may find on the report.
- Don’t close current credit card accounts.
2. Get Your Finances in Order
In addition to having a high credit score, you must also get your finances in order. This means that you need the money to pay for a down payment and all closing costs, along with strong savings, a monthly income to pay for homeowner expenses, etc. While many home loan options don’t require a certain dollar amount for a down payment, experts suggest you pay at least 20% of the home’s purchase price.
3. Receive Pre-Approval
Once you have your finances and credit score in order, visit a lender to receive pre-approval for a loan. While this is not a guarantee that you will receive the money to purchase a home in Markham, it shows the sellers of a house that you are financially able to buy a home and it gives you an approximate budget to ensure that you can afford the home. Make sure you spend time shopping around and visiting with various lenders to receive the best options for your current situation.
4. Provide All Documents
Once you have placed an offer on a home, the hard work begins. You will want to work closely with your lender to finalize the home loan. Your lender will need multiple documents from you including pay stubs, personal identification, previous residential information, and more. Your lender will discuss all needed documentation with you. Just make sure you are prompt delivering the paperwork as any delays can halt and slow down your sale.
5. Close on the Home
Once all of the paperwork and documentation has been received and processed, it is time for you to officially close on the home and make it yours. You will work with both your real estate agent and your lender to make this process run as smoothly as possible. A mortgage can certainly be a time-consuming step in the home-buying process but when you are prepared and understand what is required, you will be in a much better position and enjoy the entire experience much more.