2. Who’s buying and why?
If you’re keen on buying a new home soon, you’re not alone.
Young Canadians feel that housing is still a good investment,
according to Home Ownership polls. Nearly 76% of those aged 25-
34 believe that owning a house or condo is a very good
investment. Forty-three per cent of 18-to-24 year olds say they are
considering purchasing a home in the next two years.
The housing market also generates a lot of economic activity in
Canada. Not just home selling and buying and construction but
also for those industries connected to housing such as legal
services, moving companies, landscaping companies, home
improvement companies, etc. Each year, approximately 620,000
households move into newly-purchased homes in Canada.
However, the process can be overwhelming. It doesn’t have to be
if you put together a team of experts who will guide you through
the steps.
Buying a home for the first time should be an exciting time but it can be a
stressful experience -- there’s a lot to consider when starting out. A home is
likely the largest purchase you’ll make in your life and it’s likely the largest
financial contract you’ll have to sign.
3. Once the Offer to Purchase is made, working with a trusted lawyer is the best way to
make sure there are no surprises at closing. Hiring the right lawyer, early in the home-
buying process, can actually save you time and money. Since this is one of the largest
financial transactions you will ever make, it pays to ensure it’s done right and that all
legal rights and protections are adhered to. A lawyer is particularly important when it
comes to purchasing a property that has not yet been built. Also, if you opt for a
condo you’ll need a lawyer’s help to decipher the 30 to 50-page purchase agreements
that are common with condo purchases.
Mortgage professional
Realtor
Lawyer
He or she will take a look at your finances, including your credit score, to qualify you
for a mortgage. A lot of information about you and your credit management abilities
come up during this process. Having derogatory items on your credit report doesn’t
mean you can’t qualify for a mortgage. Everyone’s situation is different and a
mortgage broker is familiar with most situations and can offer options.
Once armed with a pre-approval, you can confidently work with a Realtor to find the
right house for you. Find someone you’re comfortable with and who is interested in
getting you what you want. Your agent should be familiar with the neighbourhoods
you’re considering.
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2
Your TEAM
5. Impact of New Minimum Equity Requirement
Purchase Price Minimum Equity
Requirement
Minimum Down
Payment (Amount)
Minimum Down
Payment (%)
Impact
Up to and
including
$500,000
$600,000
$800,000
$999,999
5%
5% of the first $500,000 +
10% of the additional portion
5% of the first $500,000 +
10% of the additional portion
5% of the first $500,000 +
10% of the additional portion
Up to $25,000
$25,000 + $10,000* =
$35,000
$25,000 + $30,000* =
$55,000
$25,000 + $50,000* =
$75,000
5%
Additional 2.5
5.8%
6.9%
7.5%
None
Additional 0.8
Additional 1.9
* Values have been rounded up for simplicity.
Ÿ A minimum down payment ofYour down payment.
5% is required for most owner-occupied purchases (see chart
below). This is considered a high-ratio mortgage and will
require insurance. If your down payment is at least 20% then
there is no insurance required, in most cases.
Ÿ This shows your ability toYour household income.
make your mortgage payments.
Ÿ Your current debts and monthly payments
associated with those debts. By reviewing your
debts and your payment history a lender can determine
whether you can afford an extra mortgage payment and if
you are likely to make your mortgage payments.
YOU ALSO NEED TO CONSIDER THE FOLLOWING
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Ÿ Your estimated monthly housing-related
costs. This includes mortgage payment, property taxes,
property insurance, condo fees, taxes, utilities and
maintenance cost. Lenders add up these housing
expenses to determine your Total Debt Service Ratio.
Ÿ Your anticipated closing costs and other
one-time costs. These costs can include a home
inspection, an appraisal fee, if needed, land transfer tax, if
applicable, as well as legal fees and disbursements. A
mortgage professional can help you assess these costs.
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7. Is it the size of the home or the neighbourhood? A
condominium that is closer to your work may be preferable to a
larger home with a longer commute. How close are you to
schools, entertainment, daycare facilities? Do you want to be
next to a park or next to a power station? Walk the
neighbourhoods you are interested in and talk to the people in
the area.
The home inspection is a critical part of the process, so do your
research. Ask for referrals about home-inspection companies.
There are now additional special inspections that you can pay
for to check for mould, termites, video-camera inspections of
the drainage system and even infrared scanners that can check
whether there is sufficient insulation or moisture or perhaps
even electrical problems that may lie behind walls. It will cost
more for this but should result in fewer problems after closing.
Be prepared to ask your Realtor the hard questions like
basement flooding problems or mould or roof leaks, even if the
leaks have been repaired. Ask about any adverse
neighbourhood conditions.
What is most IMPORTANT to you
when buying your FIRST HOME?
8. Blake Wilson Mortgage Broker
Phone: 902.329.3835
Fax: 1.877.621.4913
Email: blake.wilson@mortgagegroup.com
www.blakewilson.ca
The Value of Working with BLAKE WILSON
