Your Guide to Navigating Home Buying Like a Pro

If you’ve been through the home financing process before, you already know that having a savvy mortgage broker in your corner can be a game-changer. When it’s time to buy your next home, there are a lot of factors to consider that can really impact your decision-making. From figuring out your budget to the nitty-gritty of re-qualifying and porting your mortgage, it’s all about weighing your options to find the perfect mortgage that aligns with your long-term goals. Let’s dive into some key things to think about.

Mortgage Pre-approval

First things first: getting pre-approved is a must when you're planning to buy your next home. It helps you get a clear picture of your budget and your financial options. Do you need to sell your current home first? Can you hang onto it as a rental property? Or maybe you can sell it after you’ve moved? And how much does your existing place need to sell for to qualify for your new home? Getting pre-approved answers all these questions and more.

Porting Your Mortgage

If you’re thinking about taking your current mortgage with you to a new property, you’ll want to look into porting. This means you can transfer your existing mortgage rate and terms to your new home, which can save you from potential higher rates down the line. It’s a great way to keep your financial situation stable when making a move.

Porting Your Default Insurance Fee

Now, if your old home had insurance from CMHC, Sagen (formerly Genworth), or Canada Guaranty, you might also be able to "port" your default insurance if you didn’t put down 20%. This is separate from porting your mortgage, so keep that in mind. By porting your default insurance, you can maintain the same mortgage balance and amortization. Just remember, if you decide to increase the mortgage amount, there might be a top-up premium, but it could save you a lot in the long run by not having to pay the entire premium again. I’m here to walk you through all your options.

Bridge Financing

Let’s talk about bridge financing. This is super handy for folks whose timing for selling their current home doesn’t quite match up with buying the next one. Essentially, bridge financing provides the funds you need to snag your new place before you’ve sold your current home. To qualify, you’ll need an unconditional sales agreement from your agent for your existing home. The bridge loan is secured by your current property and paid back once the sale goes through. Just a heads up, though: bridge financing usually comes with higher interest rates since it’s short-term. It’s a helpful tool during this transition, but not something you want to rely on long-term.

Offer time!!

Now that you’re ready to write an offer, consider your current home situation. If you plan on selling or need to sell your home to qualify for your new purchase, make sure to include a condition like “subject to the sale of existing home” in your offer. This condition protects you if your home doesn’t sell as quickly as you’d hoped. Chat with your real estate agent about putting in an offer on a new home before selling your existing one. Depending on the market you’re in, this might not always be the best move.

Pro Tip....

By keeping these items in mind, you can navigate the home financing process with confidence and make the best decisions for your future. If you have any questions or need a bit of guidance along the way, I’m here to help!

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