1. Do your taxes. It doesn’t matter if you don’t owe anything because the company you work for remits them for you every month, your lender will require that your taxes are up-to-date and will ask to see your Notice of Assessment before they’ll give you a mortgage. So stop procrastinating and do your taxes.
2. Check your credit rating. I regularly see Buyers sidetracked by errors, secret spousal spending and identity theft on their credit rating. You can check your own credit online: Equifax.
3. Free up some cash or get a credit line equal to 5% of your budget. When you do find your dream home, you’ll only have 24 hours to come up with a deposit (and even less if you’re in a bidding war). Deposits are usually 5 % of the purchase price in Toronto. If your down payment is in an RSP, that’ll take a few days to process so you’ll need access to money elsewhere – most Buyers use a credit line temporarily or borrow funds from family.
4. Get pre-approved for a mortgage. Those online calculators won’t save you at 10 o’clock on a Friday night when you’re in the middle of an offer and need to know you can get financing. Being pre-approved allows you to focus your search efforts to your budget and get a guaranteed interest rate (usually for 90 days). Start with your own bank, but also consider going to a mortgage broker who will contact dozens of lenders on your behalf (at no cost to you). Of course we always recommend Henry Vincent at RBC (email@example.com or via cell (416) 371-8650) – he has all of our mortgages.
5. Find out what’s really happening in the market Asking price is only part of the story. We send out sold prices every day, and there’s no better way to find out what you can really afford. Click here to sign up for our Toronto Sold Reports.