Ashford W. Meikle, Staff Reporter
GAVIN LOWE
ONE THE biggest mistakes a homeowner can make is to borrow the downpayment and closing costs. That's the word from the assistant vice-president for operations at the Victoria Mutual Building Society (VMBS), Gavin Lowe.
"When the prospective home owner does this, from day one they have a problem managing the mortgage. Because you find that they now have to repay that loan whether to a credit union or a family member and it overwhelms them. And so, in the end, this overwhelms them," Mr. Lowe told Sunday Business.
Because of this, said the
mortgage executive, building societies are becoming more vigilant "in measuring cash flow ... to examine where the borrower got the deposit from." According to Lowe, at VMBS, if the applicant says he or she got his or her deposit from their savings, he or she "would have to show us which account that deposit comes from."
RESOURCES
That said, Mr. Lowe advised that "anyone thinking of house hunting, the first thing he or she should think of doing is look at what resources they have what money they have saved because they are going to have to make a 15 per cent deposit. In addition, the closing expenses can run them as high as 10 per cent so it's more 25 per cent of the purchase price."
A critical, next step he notes, is pre-qualification. "This means they should speak to a loans officer to determine what amount of loan they would be qualified for so it could guide them when they start house hunting. Pre-qualification costs nothing.
"It's a service we offer. I would say to the prospective home owner, just visit one of our branches and speak with a loans officer."
According to Mr. Lowe," Unfortunately, what we find people do is they look at a home, they fall in love with the house and find that subsequently they can't afford it. And, at that end, it causes disappointment and resentment."
HERE ARE SOME RECOMMENDATIONS:
The first thing to
do is ask yourself,
am I ready to buy?
REVIEW YOUR SAVINGS
Can I find the down
payment?
Can I find the closing
costs?
REVIEW YOUR INCOME
What is my income?
What monthly payments can I afford?
Am I eligible for a NHT benefit?
FIND THE RIGHT LENDER
Does the lender have a
solid reputation.
Is the Lender an approved institution?
Does the lender offer
competitive loan packages?
Get Pre-Qualified
(VMBS YES/NHT).
FIND THE RIGHT HOME
What is the right home
for me?
Size of house number of bedrooms, bathrooms
Location Close to work, school, urban or rural.
Type of House
Single family, townhouse, apartment.
Age of the house new, requires repairs.
Economic stability of area are the environs run down, area in transition?
APPLYING FOR THE MORTGAGE
The documents required
Sale agreement
Proof of earnings
Valuation report
Proof of savings
TRN and NIS numbers.
Info provided by Victoria Mutual Building Society
