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The Home Buying Journey in Six Steps
A map of the home-buying journey from "thinking about it" to housewarming.
Last week we covered home-buying basics—the down payment, the fees, the offer, the reports— but as we all know, timing is everything. So, here’s a map of the home-buying journey from “thinking about it” to housewarming.
Introduction
Step 1 – Get your finances in order
You can get up to 100% financing with an NCB mortgage, but you’ll have to get approved first. Get prepared for the application process by assessing your financial situation. Have you been in your current job for more than 6 months? Or, if you’re self-employed, can you verify your last few years’ earnings with bank statements? Have you saved up enough to cover a down payment (5 – 20% of the cost of the property) and closing fees (10 – 15% of the loan amount)?
Step 2 – Get your mortgage approve
You might be tempted to find a house next, but getting your mortgage approved first is the smartest route. You’ll know exactly how much you can afford, which narrows your search and makes conversations with your real estate agent easier.
With an approval letter in hand you’ll also be taken more seriously by both realtors and sellers. Start by getting together the required documents. You can get a checklist customized to your circumstances—salaried or self-employed, using your NHT benefit or not—here on myhome.jncb.com.
Step 3 – Make an Offer
Now that you’ve overcome the approval hurdle, it’s time to start house-hunting. There are a few things to keep in mind. For example, the length of time the property has been on the market gives an indication of how much competition you’re facing.
If the property has been on the market for a long time, the seller may be more willing to accept an offer below asking price. If it’s just on the market, however, it’s a good idea to offer at least the asking price. Does the house require repairs or renovations? You can ask the seller to complete the repairs, or figure the repairs into your offer. A real estate agent can help you make a sensible evaluation. Once you’ve agreed on a price, it’s time to sign the sales agreement. You’ll need a lawyer to get that done.
Step 4 – Submit the Property Documents
So, you’ve made an attractive offer, the seller has accepted it, and your dream home is within grasp. What’s next? Sit back, relax and let the valuator and surveyor do their jobs. Their reports will tell you the true value of the property, and document the property’s boundaries and title requirements.
Beware, if the selling price exceeds the value assigned by the valuator, your mortgage provider may choose to lend no more than the property’s true value. On the other hand, if the purchase price is lower than the property value, you’ve gained additional equity.
The seller’s lawyer should also provide you with a property tax certificate and proof that all utilities have been paid. This is also when you pay your mortgage fees. Deliver all of this to your mortgage provider so that you can seal the deal on your mortgage.
There may be other things—many providers require life insurance, for example—so check with your provider for a full list of the docum ents required. NCB has a checklist for this stage of the process.
Step 5 – Close the Deal
This part is largely in the hands of your vendor’s lawyer. They will complete the transfer of ownership and send all the necessary documents to your mortgage provider.
Your lender will then register your mortgage and disburse the loan amount to the seller’s lawyer. Once the seller confirms that the terms of the sale agreement have been met, it’s time to hand over the keys. Break out the champagne! You’re officially a home owner!
Step 6 – Move In
Ready, set, housewarming! Joking, there are a couple steps before that. You need to connect your utilities, hire the movers, paint, garden, but that’s all fun when you’re doing it on your very own property.
You’ll also need to make some decisions about how you’re going to make sure your mortgage is paid on time, every time. Might we suggest a salary deduction or standing order from your bank account?
The end of the home buying journey is just the beginning of home ownership responsibilities.