Very often, potential home buyers have approached me, asking me to show them properties without being initially pre-approved by a Mortgage Broker. This is incorrect.
The first thing anyone, who plans or thinks to buy a property (home or Condominium) must do, is to get a written pre-approval from a Real Estate Mortgage Broker (either independent or who works for a Bank). This comes before location, finding a home or making an offer.
There is nothing complicated about it and it doesn't take too long. You just have to provide the Mortgage Broker with your (and/or your spouse's) Social Insurance Number, Date of Birth and a few of the most recent Pay-Stubs.
The reason why this must be done in the first place, is that you, as a potential buyer must know exactly how much you can buy for and at what interest rate, before you go out there viewing properties. And that is important because you'll be able to know what your limit is, and on other hand, you'll never end up frustrated after knowing that you can't buy the property you found because you either can't afford it or an irregularity was found in your credit history, or anything else.
The decision to buy a house, is usually an emotional one. Therefore, is very important that you, as a buyer, have the numbers checked out before making the decision. Remember you're not buying a T-shirt.
You should know that beside the mortgage (good debt) you have to pay back, you also have other immediate expenses associated with the buying of a property: You'll pay Land Transfer Tax, Home Inspection, Lawyer's fee, Fire Insurance, Moving expenses. There are some other, smaller expenses related to tranferring or opening accounts for phone line(s), Internet Service, Hydro, Gas (Enbridge or Direct Energy), Water and Sewage (Water Bill).
