In this Q&A, Calgary-based mortgage broker Julie Manna shines a light on some of the biggest steps homebuyers must take when shopping for and securing financing.
Whether you’re upsizing, downsizing or buying for the first time, purchasing a new home can be a complex process. From determining what type of house you want and your price range, to choosing a community, finding the right home, and making an offer, there are lots of steps to navigate during the homebuying journey. And one the most daunting of these steps—especially for first-time homebuyers—is securing financing.
That’s where mortgage brokers can make a major difference. These financial professionals act as intermediaries between homebuyers and lenders, helping buyers find the mortgage solution that best suits their financing needs, then guiding them through the application and approval process.
“A lot of prospective homebuyers think they know everything they need to know about mortgages, but when they get into the nitty gritty details, many get discouraged or overwhelmed,” says Julie Manna, a Calgary-based mortgage broker with MMG Mortgages. “That’s part of what I love about my job—educating clients about mortgages and helping them feel informed and empowered.”
As a Calgary-based broker with years of experience helping clients find their dream homes, Manna has keen insight into the city’s real estate market and the questions prospective buyers tend to have—and she answers a few of them for us here.
Q. In your opinion, why is the Calgary area an ideal location for people looking to buy a home?
Compared to other big cities in Canada, home prices here in Calgary are still on the lower side, so the bang for your buck is still huge. Even though house prices have gone up here, homebuyers are still getting better value for their money in Calgary than they are in other major cities. And, of course, the location itself is very desirable.
Q. When is the best time to buy a home?
I basically tell people that the best time to buy is when you’re ready. Don’t wait for interest rates to be lower, or house prices to be lower, because it’s most likely not going to work out the way you planned. When you’re mentally and financially prepared to buy a house, when you’ve got that down payment and everything is good to go, that’s when it’s the best time to buy.
Q. But isn’t it wise, in some cases, to wait for lending rates to come down?
Timing the real estate market almost never works. It’s true that whenever interest rates increase, lots of people feel like they should wait until the rates come back down. But the thing to consider is, when interest rates are higher, there are fewer people shopping in general, and house prices are generally lower. That means you’ve got more options, and potentially better negotiating power. Plus, if you buy when interest rates are higher, when those rates inevitably drop, your house price will increase. As a result, and then those rates drop and house prices increase, you’vre now built now building equity in your home.
In a nutshell, interest rates shouldn’t be the determining factor. If you love the home, if it’s in the right location and you’re ready to buy, then go for it. I like to tell my clients, you marry your house, but you date your rates. Your interest rate changes every three to five years, or shorter if you choose, so it’s never set in stone. Just find the house that you want to stick with.
Q. At what point should prospective homebuyers start looking into financing, or reaching out to a mortgage broker?
People come to me in different seasons of their homebuying journey, but it’s best to come early in the process so that we can discuss various mortgage options and get started on a pre-approval.
Q. What’s involved in the mortgage pre-approval process?
It probably differs a little depending on the broker, but when a new client comes to me, the first step is an introductory conversation in which we spend some time getting to know each other. That way I can learn about who they are, what they’re looking for, where they work, and what they can afford for a down payment. Using that information, I make a list of documents that I need to collect for their pre-approval, including income confirmation, employment verification and proof of assets. Once they send me those documents and fill out an online application, I secure the pre-approval, which then helps to determine their maximum purchase price.
Q. What if that maximum purchase price is lower than the buyer had hoped it would be?
If it’s not where they wanted it to be, we look at different options for how to get there, like paying down debt, refinancing a vehicle, or maybe getting someone to co-sign the loan. We explore these options together to get as close to that desired purchase price as possible. Once they know their maximum purchase price, they can really start house-hunting, and they won’t waste time looking at places that are too high for their budget.
Q. What happens once a client finds the house they want?
Once a client finds a place and sends an offer, it’s possible we’ll need to update a few documents depending on how long their search has been. From there, we submit to the lender and get the mortgage approval. Next, the buyer(s) will sign off on their financing conditions and meet with their lawyer, who will ensure the transfer of land is legally binding.
Q. How long do you continue to work with your clients once the sale is complete?
I always reach out post-close to make sure they don’t have any questions. I’ll also check in a couple of times a year to see how everything is going. I like to tell my clients that the closing isn’t the end of our relationship, because we have the next three to five years on a mortgage and things happen—I always want to make sure their lending arrangement still meets their needs.
Q. Why do you think working with a mortgage broker is beneficial for homebuyers?
Owning a home is one of the biggest things people strive for, but getting to a place where they’re able to purchase can be a hard process. Mortgage brokers can help get their clients into their dream homes. And it’s a rewarding achievement, especially when the client thought they’d never be able to own a home because they have a credit challenge or they’ve already been declined by other lenders. That’s the role of a good mortgage broker—thinking outside the box, getting creative, and finding those solutions.
