For many people, buying a house is the biggest financial transaction they’ll ever make. It may be stressful and exciting all at the same time. There are many elements that have to come together at the same time and there are many steps involved. One integral part of house hunting is getting financially approved before you start looking. While we don’t oversee mortgages or financial institutions, we wanted to offer some tips if you are thinking of getting a mortgage.
Tip 1: Think it through first
According to the Office of the Parliamentary Budget Officer, Canadian household debt hit a record high of 171% in late 2015. So if you are thinking about buying a house and obtaining a mortgage loan, the Mortgage Broker Regulators’ Council of Canada suggests asking the following questions:
- How much will it cost?
- How will it affect you?
- Can you continue to make the payments for the entire length of the mortgage?
- Will you still have enough money left for the other things in life you need or want?
- What other expenses are involved in the purchase (e.g. legal fees, appraisals, taxes, moving expenses…) and how much will they cost?
- What are the risks if you can’t make your payments?
Tip 2: Research mortgage providers
When you are ready to speak to someone about your mortgage options, there are a variety of resources available including banks, credit unions and mortgage brokers. It’s important to find out more about each option to make sure you are getting the best product to meet your needs. The Consumer Agency of Canada has more information about where to get pre-approved for a mortgage on this page on their website.
Tip 3: Understand your mortgage contract
As with most legal contracts, a mortgage can be very complicated. It is important to understand your commitments. Find out things like the total cost of a mortgage, interest rates, preparing for the renewal process, finding the right payment option, fees and penalties.
Home inspectors are required to be licensed with Consumer Protection BC, you can use our online search function to find a licensed home inspector.
Consumer Protection BC does administer the section of the Business Practices and Consumer Protection Act that speaks to the disclosure of the cost of consumer credit, which includes mortgage contracts.
If you have a question, please share your experience in the comment section below or contact us.