Mortgage PROFESSIONALS warn applicants against trying to ‘outsmart the process’ when applying, pointing out that in these circumstances they often end up sabotaging their goal. Professionals advise people to follow the process very carefully and to listen to the advice of their mortgage institution and the experts engaged in the real estate process.

Experts, JN Bank Branch Head Petal James and National Housing Trust Head of Corporate and Public Affairs Dwayne Berbick were speaking at a Gleaner Premium webinar recently.

“Most of the ‘stumbling blocks’ that people encounter are self-imposed, because people are impatient. They want to move on, they want to rush and get things done, and there’s a process,” James commented, as she answered a question from a webinar attendee about the “barriers” that people sometimes encounter when buying a property. .

“You have to plan ahead. You do not want [try] and get a head start on the game, where you’ll just make a deposit. Sometimes some people are so impatient that they will put down a deposit.

“Have a mortgage expert hold your hand through the process. Don’t try to get ahead of your mortgage experts or your banker,” she advised.

PLAN AHEAD AND GET PRE-APPROVAL

James said the first thing applicants should look to do is get pre-approved by their banker. The pre-approval process is an assessment of his income which will therefore determine the price of the property he can afford. During this stage of the process, James advised, applicants should be careful about reducing their debt and, in fact, should be looking at how they can improve their revenue generation by budgeting prudently, in order to improve their eligibility for a mortgage and preparing to service the loan. “You receive a pre-approval letter today; your pre-authorization letter is valid for three months, and you will take out a loan [during that time period]. You are now causing a “stumbling block” [for yourself] when you are ready to buy, because you do not have sufficient income to take care of your [mortgage],” she says.

MORE OBSTACLES TO REMOVE BEFORE REIMBURSEMENT

After passing the pre-approval stage, there are several other activities to be carried out as part of the due diligence process, she advised.

“You can’t pay off a property and you haven’t done a valuation report yet; and when you have done that appraisal report, you find out that the value of that property is not similar to the price you are buying,” she explained.

The same goes for a surveyor’s report, she said, stressing that this must be done before the deposit is made.

“By the time you look at the road, the bank won’t finance this property because there is an encroachment, and that encroachment needs to be fixed before we take the security,” she said.

DO YOUR DUE DILIGENCE

Beyond these reports, mortgage professionals have encouraged people to also research whether the seller owes maintenance costs – if the property is a condominium – and utility bills, especially water. And they may need to go further.

“Sometimes you’ll need someone to check that water meter because they’ll pay the bill, you know, but there’s a leak and the first month you’re like, ‘I haven’t even moved in yet. , why my bill is $60,000? Berbick remarked.

Before signing a sale agreement, he said it also needs to be ensured that the person selling the property, the seller, has permission to do so.

“People sell things they don’t own, and sometimes it’s only when you’re on the line and…you may have already made your deposit and…you reach the ANL (Agency national landholding) and you say, ‘Oh, it’s not the owner of the property!’, he said.

GET A LAWYER

Lawyers are essential to the sale and purchase of real estate, the two experts stressed, and encouraged mortgage applicants to retain the services of a lawyer and listen carefully to their advice. A good lawyer will ensure the buyer makes the right decisions and advise against actions that will lead them down the wrong path, Berbick and James noted.