07 Nov Mortgages 101 in Alberta
Most Common Questions
Is a bank or broker better? 99% of the time a broker is better. The reason is simple. One bank = one product. A mortgage broker can access 50+ institutions. It’s like getting a personal shopper that does nothing but mortgages all day every day. Even better, it’s usually FREE (the bank pays them). A bank is trying to maximize their profits, a broker is a go between that has no financial interest in making you pay more! The 1% where a bank can be better is specific products like bridge loans, lines of credit, or construction financing if you have a great relationship already.
This resource page has most of the items you’ll need to prepare for a mortgage pre-approval. Resources
Credit scores matter and they are mostly hidden until you need to buy something. Take back that power by learning more. What is a good score? 700 or above is a good score but don’t worry. Keylo’s not for profit has a program all about improving your score and lowering your interest rates (call and ask us). Start with the basics from the government of Canada HERE.
Let’s be honest. Pre-qualified doesn’t mean much and is based on whatever you say may be true. Consider it a ballpark of what could happen. Did you know a pre-approval doesn’t mean you can go out and buy any home? Pre-Approval means a conditional commitment. The bank will approve a home under certain conditions like an appraisal. Pre-approval can tell you what amount you qualify for and what rate but it doesn’t guarantee any home. This is why you often see a financing condition on offers to purchase a home. That condition let’s you find out if you are actually approved.
The bank wants to know how risky you are. In their eyes they want to lend money to people who will always pay them back. Underwriting is when they look at your application and decide if it’s worth it to them to approve or deny you. This also includes approving or denying the property you want to buy. The specific property matters to them because they want their money back in case you default.
If you’re here you are probably at step 1 in your financial timeline. Your timeline in BuyMyHomie.com is how Keylo guides you step by step to buy a home so read this article then check it out (it’s on the left on desktop or bottom left account/timeline on mobile). Did you know, just by reading this post you can earn points?
Canadians love real estate and hate talking about anything financial. Can you imagine being at a party and everyone at the table suddenly asked “How much do you make at your job” or “what’s your credit rating”. You’d pretty quickly avoid the topic or leave. This causes a lot of people to skip the pre-approval and start looking at homes. DON”T!!!! Trying to buy a home without a pre-approval is like trying to land a plane and get the flying lessons later. It usually leads to disaster. Buying a home takes a plan and the budget is a key to starting off looking at homes you can afford.
Don’t worry though. Talking to a mortgage broker doesn’t wreck your credit or make you vulnerable. It’s a lot like brushing your teeth. It’s not exciting but it’s necessary and it will ultimately save you money. You don’t have to be ready to buy a home today. In fact, Keylo has a whole not for profit dedicated to solving home affordability and that starts with education and fixing your credit score (ask us).
Want to know your monthly payments? Go to www.BuyMyHomie.com/mortgagescreen and see what an actual home you like costs per month (fill in the data with some guesses to start).