Sherwood Park’s trusted mortgage broker

At 18, you now have the opportunity to start building your credit history, and trust me, it's a big deal. Your credit score influences everything from renting an apartment to buying a car or even getting a mortgage down the road. And you may not be thinking of that for a few years, but here's why managing your credit now is essential:

Establishing a solid credit history early on sets you up for financial success in the future. Lenders look at your credit report to determine your creditworthiness, so starting now means you'll have a longer credit history by the time you need it.

So, how can you start managing your credit responsibly?

You might want to begin with a secured credit card and maintain a low credit limit. Ease into credit as applying for a number of cards at once can negatively affect your score.

Your payment history makes up a significant portion of your credit score, so always pay bills and credit card balances on time, even your cell phone bill. Set up automatic payments so you don’t forget.

Aim to keep your credit card balances low relative to your credit limits. Ideally keep your balance at 30-50% of your credit limit as high credit utilization can negatively impact your score. Keeping your balance near limit, even if you pay it off in full each month can also have a negative impact.

Check Your Credit Report: Regularly review your credit report to catch any errors or signs of identity theft early on. You can do this for free from sites like myborrowell.

Remember, your credit score is a reflection of your financial habits. By managing credit responsibly from the start, you're setting yourself up for a bright financial future. If you have any questions or need guidance, don't hesitate to reach out. Here's to smart financial decisions and a prosperous journey into adulthood!

Closing costs extend beyond your down payment and include various expenses associated with a new home purchase. Here's a breakdown of some common costs:

Legal fees

Working with a lawyer is essential for handling the legal aspects of your purchase and you can expect to spend between $1200 to $1500

Title insurance This protects against any issues with the property's title, such as existing liens or ownership disputes. The cost of title insurance can vary based on the purchase price of the property.

Home insurance

Mortgage lenders require you to have property insurance to protect against potential damages or losses. The cost of property insurance will depend on factors such as the property type, location, and coverage amount.

Adjustments

On closing day there may be adjustments for property taxes. You may be responsible to reimburse the seller if they have prepaid all or a portion of their property taxes.

Generally, lenders ask to show an additional 1.5-4% of the purchase price available to cover closing costs.

As we conclude our 12-week First-Time Home Buyers Series, I want to thank you for your participation whether it was a like, share or comment. Looking ahead, I'd love to hear your thoughts on future topics. What would you like me to cover next? Your feedback shapes the content, and I'm excited to bring you more valuable insights

Mortgage Life Insurance serves as a safety net for your loved ones in the event of your unexpected passing. This insurance ensures that your outstanding mortgage balance is paid off, relieving your family from the financial burden during an already challenging time.

Similarly, Disability Insurance steps in to provide financial support in case you are unable to work due to a disability. Your mortgage payments are covered, allowing you to focus on your recovery without the added stress of potential financial strain.

Relying solely on life insurance coverage provided through your employer can present several challenges and potential drawbacks. Employer-sponsored life insurance is often tied to your job, and is not portable if you change employers or lose your job.

These policies usually provide coverage up to a specific limit, which might not be sufficient to meet your family's needs.

When you apply for Mortgage Life and and/or Disability Insurance with your mortgage, Coverage moves with you even when you change employers or lenders, Your original coverage goes with you. Your premium is locked in at the age you applied.

Understanding the importance of Mortgage Life and Disability Insurance is not just about securing your home; it's about securing your family's future and preserving the dream of homeownership, even in challenging times.

If you’d like to learn more, please reach out. Join us next week in our final installment of our first time home buyers series where we’ll talk closing costs.

There are many conditions you can include with your offer. The most common for first time buyers include mortgage financing and a home inspection.

A financing condition protects you until your mortgage is approved. Remember a pre-approval does not guarantee a mortgage approval, and this process can reveal unexpected issues that may affect your eligibility.

You can also use a financing condition to your advantage. Because you’ve already done your pre-approval homework, you may be able to offer a shortened financing condition date which make look favorable to sellers and give you a leg up on your competition. Especially if you are in a multiple offer situation.

Adding a home inspection condition to your offer is crucial as it provides an opportunity to assess the property's condition before finalizing the purchase. This condition safeguards you by uncovering potential issues, allowing for negotiation, and ensuring you make an informed decision about the property's value and any necessary repairs.

Once your offer has been accepted, you will be required to provide a deposit and this amount can range widely from sale to sale. It’s good to know that The lender considers the deposit provided as part of the required down payment, and not an additional sum.

RECA offers some great information in regards to offers.

https://www.reca.ca/consumers/buying-a-home/making-an-offer/