I will be outlining the steps in order to get a mortgage in New Brunswick. Once you have been pre-approved, and found your home, then you will need to provide the following documentation:
A copy of my GIC/ Savings account statements for the last 60 days;
Proof of income (Two most recent pay stubs or one year’s T4) – Copies are acceptable;
Employment verification letter from employer or union card; I have completed a Certificate of Canadian Citizenship, Birth certificate or Naturalization papers if I am not a Canadian citizen; and finally A letter from my bank verifying assets and liabilities.
Tips for getting a mortgage in new Brunswick
This is a very competitive lending market in New Brunswick. This means that lenders will be using a very strict criteria to qualify you for your mortgage. In order to get a mortgage, I recommend the following course of action:
Open as many GIC’s as possible and set aside some money in Canadian dollars; Get all required documentation together; Schedule an appointment with a lender; and Apply for mortgage
Financial institutions here are required to verify that you have the money to pay off your mortgage should interest rates hike. This process will take up to two weeks. You can use this time to negotiate with the seller of the home you want to buy. If you can’t wait for the approval, you may use a regular purchase agreement that would be subject to lenders conditions. Once it’s approved, then you can proceed with the process of buying a home as per your own instructions.
A little bit of history on the home buying process
The home buying process in Canada has changed considerably over the past decade. This is largely due to various policy changes that have been implemented by federal, provincial and municipal governments. The first major change came in the 1980s when interest rates were lowered for most Canadian mortgage holders, boosting demand for housing. In 1985, legislation was enacted that allowed principal reduction which allowed buyers to reduce their monthly payments if they had trouble making them. This lowered payments dramatically and prompted an even further increase in demand for housing as prices were also lowered substantially. Another change made in 1991 was a policy of foreign buyers restrictions and a significant decrease in prices across the country.
New Brunswick home buyers
The market in New Brunswick has remained stable over the past few years shifting from a seller’s market to a buyer’s market. This is partly due to the fact that economic activity in New Brunswick is not as high as it should be for a province with such natural abundance. At present, there are more than 11,000 newly constructed houses available for sale and more than 5,000 of them have been listed for more than three months. On average, they stay on the market for a little less than four weeks. The supply is quite high compared with other markets across Canada and this has resulted in sellers reducing their asking price by 14.4% on average since August of 2017. The price of a standard two-storey house is roughly $360,000 and overall, the average price of a new home was $446,850.
How to get a mortgage in New Brunswick
In order to get a mortgage in New Brunswick, you will need to show banks that you can afford to pay off your mortgage should interest rates rise. The process will take about three weeks. You can use this time to negotiate with the seller of the home you want to buy. If you are unable to wait for the approval, you may use a regular purchase agreement that would be subject to lenders conditions. The Citywide Mortgage Company is the largest bank in Canada and on average it has three branches across Canada.
The process of getting a mortgage for New Brunswickers
Getting a mortgage in New Brunswick is not very easy, especially for first-time home buyers. If you have been turned down for a mortgage in the past, or have had trouble qualifying for one in the past, you may have to open additional bank accounts and start making regular deposits all the way up to your closing date. You will also need to make sure that there is sufficient equity available at the time of purchase. This may mean paying down your car loan or even taking out a smaller line of credit to ensure that there is more equity available to you than last time.
The initial process of getting a mortgage
Before going to your bank, you should consult a realtor and look at all the options available to you. They will be able to tell you what is on the market and what is the average asking price in your area. You can also use online sites like www.mlsfinder.ca in order to see what is currently available. This will help you figure out how much money you need and whether or not it will be sufficient to get financing from a bank. Your realtor will also be able to provide you with information on any government programs that may help subsidize the purchase of your home.
How much does it cost to buy a home in New Brunswick?
The average price of a new home is currently $446,850. Since the beginning of the year, prices have increased by 2.7%. The average price per square foot is currently $176.00 ($0.77 per square foot). As long as interest rates stay low and there is some economic growth in the region, then prices may continue to increase. This means that you will have to borrow even more money than your current budget allows for and/or be able to pay down your mortgage over time starting with a larger down payment.
