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Pre-approvals and non-negotiables: What to consider in the home buying process

By ATB Financial 31 January 2025 4 min read

Mortgage specialist and realtor in photo together

Buying your first home is a big deal. But knowing how to kick off the process can be a challenge, so we asked Edmonton-based realtor JR Caputo and ATB mortgage specialist Dana for their advice. Here’s how they think you should approach the process of buying a home — from start to finish.

 

1. Pick your professionals.

A realtor and a mortgage specialist are two professionals you’ll want to engage as soon as you know you’re ready to buy a new home. They’ll communicate with you and each other throughout the entire process.

A realtor’s job is to understand what you want and need out of your new home — and then negotiate the best possible price on your behalf.

You can find a realtor by asking for recommendations from trusted friends and family, checking social media, or browsing realtor.ca. Interview as many realtors as you’d like.

Take your time choosing this partner — you’ll need to have a high level of trust in them. They’ll have to competently manage all the moving pieces of buying and selling real estate (spoiler: there are lots). Do your due diligence by checking their licensing status with Alberta’s regularly body for realtors and confirming their certifications.

A mortgage specialist works directly with you to secure the financing you need to purchase your first home. Their job is to guide you as you choose financing that best reflects your budget and preferences.

 

2. Set a budget and obtain a mortgage pre-approval.

You’ve got your professionals in your corner. But don’t start house hunting just yet. You’ll want to determine your budget, which will depend on the size of your mortgage pre-approval, your personal savings, and comfort level with loans. Your realtor also needs to know your budget before kicking off a home search and sending you properties they think you’d like.

Getting pre-approved for a mortgage is a step you’ll complete in cooperation with your mortgage specialist.

During this process, the lender goes through your income, your job history, and all your assets and liabilities. They will also pull your credit report. This helps your lender determine how much you can borrow to purchase a home. ATB offers an online pre-approval system that can help speed up the home buying process.

You’ll also undergo a mortgage stress test. The bank must qualify you at a higher interest rate than the one you’re getting on your mortgage in case interests rise. If they rise and your payments change, the mortgage stress test will have determined you can still afford your home.

Everyone’s lives — and expenses — are different. Mortgage specialists want to make sure you’re comfortable with your future mortgage payments. As a starting point, your household bills shouldn’t exceed 35% of your gross household income.

You want your budget to have enough room in it that you can easily order pizza on Friday night — from inside the house of your dreams — without worrying about the extra cost.

When it comes to the size of your down payment, which will affect the size of your mortgage, technically you only need 5% if it’s your primary residence that you’re purchasing. That said, saving for a slightly large down payment will help you pay less interest in the long term.

 

3. Consider what kind of home you want and make a house hunting plan.

At this stage, your realtor is ready to make a game plan with you. They’ll want to know if you’re interested in a condo, a duplex or a detached home. They’ll want to know if you want to live in the suburbs or right downtown.

You’ll also discuss neighbourhoods, home styles, and timelines, including how quickly you’re looking to make a purchase. There are a lot of moving pieces in real estates, so it helps to maximize your time with your realtor by aligning on your goals for your home purchase from
the beginning.

 

4. Tour properties, pull up permits, and read the fine print.

It’s time to start viewing properties. This is the exciting part, but it’s important to pay close attention to details. Remember: the MLS listing is just the starting points. Lean on your realtor to unearth hidden gems and steer you away from red flags.

If you and your realtor are looking at detached homes, consider the age of the roof and furnace. These are big ticket items that can cost you thousands of dollars to fix or replace. Listings don’t always include their ages, but your realtor can ask for specifics.

If there’s a finished basement in the house you’re viewing, that’s a plus, because it can add value to the home. But not every basement was finished using the proper permits. If the home has undergone extensive renovations — think kitchen or bathroom — check those permits as well to ensure they were done by professionals. You’ll avoid a lot of future headaches.

If a condo is what you’re after, remember to consider what’s included in the condo fees. It differs from property to property, but sometimes heat, water and maintenance are included — and sometimes they’re not.

High fees aren't always a bad thing if they cover the essentials. Next, you’ll need to review the reserve fund, the building’s savings account for major repairs. A low reserve fund could mean a special assessment in your future, the cost of which will be passed along to you as a condo owner.

 

When you find the home that’s meant to be yours, you’re already pre-approved for your mortgage, so you can make an offer the moment it feels right.

Need help?

Our Client Care team will be happy to assist.