In this post, we discuss how you can successfully buy a home with student debts, and the factors that impact your mortgage application.
Buying a home means having lots of interactions with real estate agents, lenders, and sellers. You know the market is hot and moving quickly, so you may be anxious to start house hunting right away. However, one of the first things you need to do is speak with a mortgage broker. Meeting with a broker will help you gain an understanding of where you fit into the housing market, and how they can help you meet your housing goals. It’s important to find an unbiased broker who will help you navigate the home buying process from start to finish. You can read more about what to look for in the right broker here.
Once you’ve found a broker and you’ve set up an appointment with them, how do you prepare? What should you expect? Here are a few tips to help get you ready for your initial meeting.
What to expect for your first appointment
Your first meeting with a broker will mostly focus on getting to know one another. Your broker will want to gain an understanding of your home ownership plans and goals, so they know they’re on the same page as you. They’ll ask you basic questions about your employment and current home address, go over the mortgage process, and make some suggestions for you. They will also go over all the documents and information they’ll need from you during the process.
Don’t worry – nothing stressful happens at your first appointment! This meeting is just a meet-and-greet so you can get to know one another and ensure you’ll be able to form a good working relationship.
Bring proof of income
Even though your first appointment is more of an introduction than anything else, it never hurts to be prepared. There are a few things every broker will eventually require from buyers, and it’s a good idea to bring these items with you to your first meeting. Being over-prepared is always better than being under-prepared!
Your proof of income is going to be the most important documentation you’ll need to provide. Your broker will need to know your career history, your salary, yearly income, etc. They have to confirm what you can afford before you can move forward, and official income documents are the best and fastest way to verify that information. These documents include T4 tax forms and employment records of the last three years, as well as pay stubs or bank statements. For self-employed workers, your broker will likely need additional information from you. Any tax returns or other proof of income will help move your process along.
Bring information on your debt
Do you have any kind of debts? If so, make sure you bring it up at your first meeting with your broker. This can include car or student loans, or any kind of credit card debt. Your broker needs to know about these items so they can give you the best suggestions moving forward. Having debt doesn’t mean you can’t buy a home. Many people have some form of outstanding expenses – the key factor will be how well you stay on top of your payments. Your debt might have an impact on the products your broker can suggest for you. You should also bring a list of your assets and values, to give your broker a full picture of your situation.
Create a broad budget
Part of your broker’s job will be to help you create a realistic budget for buying a home. You don’t need to come to the first meeting with it all planned out, but it’s a good idea to have a general idea of what you’re hoping to spend. Your budget can impact housing location and size, so it’s best to be as specific as you can during your first meeting. You can even bring an example of a listing that closely fits your ideal budget, size, and neighbourhood. Don’t worry about having everything figured out! Even a rough idea to let your broker know where you are is helpful.
Questions you should ask
You’ll probably have questions during your first appointment, and that’s okay! Don’t feel embarrassed about not having all the answers. It’s good to be honest about what you don’t know so your broker can explain everything in detail to you. You don’t want to leave your first meeting feeling confused, and proceeding with a mortgage plan you don’t understand.
Sometimes it’s hard to know what you don’t know. There’s a lot of information to absorb, and you might not even know where to start. Here are some questions you may want to bring forward:
- What are the benefits of fixed- and variable-rate mortgages for me?
- Would my mortgage have prepayment advantages, or prepayment penalties?
- What kind of interest rates will I be looking at?
- How long does the mortgage process take?
- What other documents/information will you need from me?
Meeting with a broker is an exciting feeling. It means you’re on your way to becoming a homeowner! Although there will be a lot to discuss and navigate, it will be a relief to have a professional on your side to help you out. By preparing for your first appointment, you can ensure your journey to home ownership is as smooth as possible.
If you have any questions about meeting with a broker for the first time, reach out today! Give us a call at Centum Home Lenders at 506-854-6847, or get in touch with us here.