By http://mortgage-broker.kelowna-bc.ca/ – Mortgage rates are low, home prices are down, but getting a mortgage is more difficult than ever because the banks always make money.
The first step in obtaining a mortgage is to get pre-qualified. The pre-approval will give you a semi-realistic view of what a bank will offer. Beware – Target a value less than the maximum the bank dangles in front of you. That amount is really a teaser amount.
Determining Your Desired Loan Terms
Once you find a property, have the bank give you a Good Faith Estimate (GFE), with several scenarios. The estimate will disclose closing costs and estimate monthly payments based on the mortgage option you choose. The bank can run a number of scenarios. Beware – Some Kelowna mortgage broker companies will ask for fees to provide you with a GFE. GFEs should be free. Keep shopping. Also, I found that actual mortgage payments are several hundred dollars higher than any scenario the bank provided, even though the sale price was lower than used in the estimate. Watch closely and demand explanations.
Locking In Your Interest Rate
Once a contract is signed, the bank will require basic financial documents: two years tax returns, two months bank statements and pay stubs, and written verification that you have down payment funds. The bank will send a loan packet of documents to sign. At this point, banks require a non-refundable appraisal fee. Beware – The bank will ask for the non-refundable fee immediately. Don’t give the bank anything until the sales contract is signed. Also, read all documents closely as the bank will sneak in useless extras, like an insurance plan as a PMI backup. Useless overkill to make the bank money.
The banks now want to know everything – updated bank statements and pay stubs, explanations of every credit inquiry over the last six months and every bank deposit over $100, and h.s transcripts. You will also receive the bank requested home value appraisal. Contrary to recent years, the contract price, and tax assessor value, is often higher than sale appraised value. If this happens, the buyer now has significant bargaining power to ask for a price reduction because of the sale appraised value. Beware – The bank will tell you to pay the difference rather than renegotiate. Don’t. Listening to the bank’s advice benefits only the bank. Renegotiate or walk away.
Banks will make money, the trick is to save yours.