Accredited Mortgage Broker
The Mortgage Centre
Trudy – As a mortgage person, we guide and educate our clients through the home buying process as it can be very complicating and overwhelming.
Mark – Before you start looking for a house, do you get a pre-approval, or how does that work? What is a pre-approval?
Trudy – The very first step you should do when you’re looking at buying a house is to talk to your mortgage professional, because they’re going to let you know the purchase price, the payments, the rates, how much money you need, and the paperwork you’ll need to provide to move ahead.
Mark – I’ve heard of pre-qualified before as well – is there a difference between pre-qualified and pre-approved?
Trudy – I would say no. The most important part is you need to have that conversation and we need to look at your credit bureau, we need to look at your paper work, and then we can offer that formal pre-approval for you.
Mark – so I got pre-approved, let’s pretend, I came and saw you, and you pre-approved me, but I want a new car, a new boat, a new bike, so now I’ve gone out and bought all that stuff, but I’m okay, because I’m pre-approved, or tell us a little about that?
Trudy – Your pre-approval is basically as of the day you provided the information, so if you didn’t share all the information, or your financial situation changes afterwards, that will absolutely affect your ability to buy, and it’s the same thing after you’ve already purchased, and you’ve removed your financing condition, and now you’re waiting to take possession of your home, that is such an exciting time, but you’re not done yet. There is no changes to your financial position until you get the key.
Mark – Say you’ve been offered an interest rate of 2.54, and another one is 2.69, we’re talking about a 1/4 of percent difference, what difference does that really make?
Trudy – on a purchase price of $300,000, you’re look at about $22, for $400,000, you’re looking at about $29. So when you go to compare, make sure you comparing apples to apples, but rate is not everything, and [that] rate doesn’t make a huge difference.
Mark – so are there tools you have, or that you can recommend – how do I know I can afford a mortgage?
Trudy – when you’re meeting with your mortgage professional to do your pre-approval, they’re going to go through everything with you, and hopefully they’ll give you some information, so you can do your own research, so the insurer, CMHC’s website, has great calculators, they have manuals, they have home buying step by step, my clients also receive additional stuff from me as well.
Mark – You and I have talked about mortgage calculators before, and you have a concern about that – what is your concern about clients taking a shot at that?
Trudy – Basically, when you get a mortgage, depending on the amount you have down, and the property, and the situation, CMHC insurance might be required. So when you’re using the calculator to figure out what your mortgage payment would be, make sure you’re including the CMCH insurance, and if you don’t know how to calculate that, just make sure you realize that the calculators you’re using are approximate, and it’s basically for a guide.
Mark – Interests make a difference, do you advise that I go from bank to bank, try to get that very best interest rate, is that a good strategy?
Trudy – the biggest concern there would be the credit bureau, so you want to make sure they’re not all pulling your credit bureau, and that’s where a mortgage broker is a great asset for you as well because we have the access to the banks, their trust companies, and insurance companies, so we kinda know where the rates are in the industry. It’s kinda like one stop shopping.
Mark – so if I go the bank, and they pull the credit bureau, and they find out if I’m approved, they’re pull the credit bureau just for them, so you’re checking all these different lenders, are you checking 10 different lenders, are you pulling the bureau 10 different times?
Trudy – so basically when we do the pre-approval, we pull one credit bureau and depending on how long it is before you purchase, we use that same credit bureau, unless it expires, but the lender may pull the bureau on the back end as well so we are definitely not pulling the bureau for every lender.
Mark – Closing costs, let’s talk about that really quick. If I have my 5% down, is that all need?
Trudy – You’re 5% down is the minimum down payment, and when you’re doing your pre-approval, we will let you know if that’s what you qualify for, but don’t forget you have to pay for stuff on the side to make that mortgage happen – so you got legal fees, your got your property inspection, your house insurance, so the closing cost budget is 1.5% of the purchase price and that goes toward all those costs – and if you’re lucky, you’ll have some money left over at the end.
Mark – So people from all over the world are moving into Grande Prairie, so tell me are there challenges for them to get a mortgage?
Trudy – There are definitely programs for people that are new to Canada, and that’s again, meeting with your mortgage professional, we’re going to make sure you got your credit rating started, and we’re going to let you know the options to purchase sooner than later.
Mark – this is so much information to take this all in, if you’re new to this, it’s going to be a lot to take in, and most people are, they’re maybe buying a house once every 5 years, not like every day. Do you have a book or manual or something like that that you can give them?
Trudy – I have information that goes into all my pre-approval packages. Lot’s of it is on the CMHC website, there’s a book you can download digitally, and all of my clients have that information.