Home Buyer consultation (2 hours) Michèle Rowe Sales Representative
all the important points <ul><li>Why? </li></ul><ul><ul><li>Buying a home builds EQUITY and financial security </li></ul><...
Who is a mortgage broker? <ul><li>Person who arranges a mortgage by contacting different lenders on your behalf </li></ul>...
What will a mortgage broker do for you? <ul><li>Provide lowest rates – no haggle </li></ul><ul><li>One stop shopping   </l...
4.50 5.25 Variable Rate 5.95 8.30 10 Year Closed 5.80 7.65 7 Year Closed 4.99 7.20 5 Year Closed 4.85 7.04 4 Year Closed 4...
What are the mortgage options? <ul><li>Conventional Mortgage </li></ul><ul><ul><li>Minimum 20% down payment required </li>...
What you need to qualify for a mortgage? <ul><li>Income verification </li></ul><ul><li>Down payment </li></ul><ul><li>Cred...
Down  payment  options <ul><li>Gift (Immediate Family) </li></ul><ul><li>Savings/RRSP ($20,000 RRSP withdrawal max.) </li>...
Canada-Ontario  Affordable Housing Program  (COAHP) <ul><li>federal, provincial and municipal governments committed $36 mi...
Land Transfer Tax Refunds for First-Time Homebuyers <ul><li>The maximum amount refundable is $2,000 </li></ul><ul><li>Redu...
What will the  Home inspector do for you? <ul><li>Building Interior: walls, floors, ceilings, doorways, etc </li></ul><ul>...
What Will Your Buyer Agent Do For You ?
What does it cost? house sold buyer and seller agents share the  commission buyer does not have an agent, seller  agents g...
PROVIDE EXPOSURE TO LISTED AND UNLISTED PROPERTIES PROVIDE A COMPARABLE MARKET ANALYSIS   GIVE ADVICE AND COUNSEL WRITE TH...
B uyer  r epresentation  a greement RELATIONSHIP AGREEMENT ALLOWS US TO REPRESENT YOU NEGOTIATE ON YOUR BEHALF FULLY DISCL...
THREE TYPES OF  HOME PURCHASE NEW HOME FOR SALE BY OWNER RESALE
New Home? do you need a buyer’s agent? buyers This sales rep seems really nice and honest, why do we need a Realtor?? buil...
For sale by owner? do you need a buyer’s agent? buyers They will give us a better price since they don’t have to pay a com...
Resale Listing? do you need a buyer’s agent? buyers sellers seller’s agent These guys don’t have a Realtor, this should be...
Time to Make an Offer <ul><li>Negotiation process </li></ul><ul><li>Facing Multiple offers </li></ul><ul><li>Dealing with ...
All About Closing… <ul><li>Closing costs   </li></ul><ul><li>Title insurance </li></ul><ul><li>Land transfer </li></ul><ul...
Closing Costs <ul><li>Deposit:  Part of your down payment, a deposit is due upon acceptance of your offer.  </li></ul><ul>...
<ul><li>Interest Adjustment:  Monthly: Monthly mortgage payments are usually due on the first of the month. Unless the clo...
<ul><li>Other Fees : Occasionally, a lender or the broker will charge a fee for providing the mortgage. If so, these costs...
Determine Your Wants and Needs Buyer questionnaire  10 minutes
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Home Buyer Consultation

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Home Buyer Consultation

  1. 1. Home Buyer consultation (2 hours) Michèle Rowe Sales Representative
  2. 2. all the important points <ul><li>Why? </li></ul><ul><ul><li>Buying a home builds EQUITY and financial security </li></ul></ul><ul><ul><li>Provides a WARM and enduring home for you and your FAMILY </li></ul></ul><ul><li>Who do you need? </li></ul><ul><ul><li>A mortgage broker gets you pre-qualified and locks-in the BEST RATES and programs from banks OR other lending institutions </li></ul></ul><ul><ul><li>A buyer’s agent works in YOUR BEST INTERESTS to find you the right home, and is paid by the seller’s agent </li></ul></ul><ul><ul><li>A Home Inspector ensures the integrity of your home and performs a visible inspection of the home’s internal and external systems. </li></ul></ul><ul><ul><li>A real estate lawyer offers his experience to ensure a flawless STRESS-FREE transaction </li></ul></ul>
  3. 3. Who is a mortgage broker? <ul><li>Person who arranges a mortgage by contacting different lenders on your behalf </li></ul><ul><li>Works with a real estate agent, real estate </li></ul><ul><li>lawyer and appraiser to coordinate the </li></ul><ul><li>financing </li></ul>
  4. 4. What will a mortgage broker do for you? <ul><li>Provide lowest rates – no haggle </li></ul><ul><li>One stop shopping </li></ul><ul><ul><li>One credit report, one application </li></ul></ul><ul><li>Provide 90 – 120 day rate holds* </li></ul><ul><li>Protect your credit score </li></ul><ul><ul><li>Unnecessary credit inquiries </li></ul></ul>Free Unbiased Professional Advice
  5. 5. 4.50 5.25 Variable Rate 5.95 8.30 10 Year Closed 5.80 7.65 7 Year Closed 4.99 7.20 5 Year Closed 4.85 7.04 4 Year Closed 4.99 7.04 3 Year Closed 4.99 6.55 2 Year Closed 4.35 5.30 1 Year Closed 5.90 6.35 6 Month LENDER’S RATE POSTED RATE TERMS
  6. 6. What are the mortgage options? <ul><li>Conventional Mortgage </li></ul><ul><ul><li>Minimum 20% down payment required </li></ul></ul><ul><li>Insured Mortgage (High Ratio) </li></ul><ul><ul><li>Insured through CMHC or Genworth </li></ul></ul><ul><ul><li>5% minimum down payment (i.e. $10,000 on a $200,000 purchase) </li></ul></ul><ul><ul><li>Premium 2.75% for 5% down payment ($30,000 x .0275 = $825.00) </li></ul></ul><ul><ul><li>Premium added to mortgage amount (i.e. $190,000 + $825,00) </li></ul></ul><ul><ul><li>$165.00 application fee paid at closing </li></ul></ul><ul><ul><li>PST on Premium (i.e. $825.00 x .08 = $66.00) </li></ul></ul>
  7. 7. What you need to qualify for a mortgage? <ul><li>Income verification </li></ul><ul><li>Down payment </li></ul><ul><li>Credit Score - Minimum 600 for most lenders </li></ul>
  8. 8. Down payment options <ul><li>Gift (Immediate Family) </li></ul><ul><li>Savings/RRSP ($20,000 RRSP withdrawal max.) </li></ul><ul><li>RRSP Loan = Tax Refund for Down payment </li></ul><ul><ul><li>30-45% Tax Refund based on income </li></ul></ul><ul><ul><li>Low interest on loan </li></ul></ul><ul><li>Borrowed from third party </li></ul><ul><ul><li>Bank Loan / Credit Line </li></ul></ul><ul><li>5% Cash Back from Lender </li></ul><ul><ul><li>Higher interest rate & CMHC Premium </li></ul></ul>
  9. 9. Canada-Ontario Affordable Housing Program (COAHP) <ul><li>federal, provincial and municipal governments committed $36 million for 4,500 low and moderate-income renter households. </li></ul><ul><li>The COAHP provides up to 5 percent down payment assistance for eligible consumers when purchasing a home. </li></ul><ul><li>Applicants must: be 18 years and older , be renting, have combined household income at or below the maximum level qualify for mortgage financing (ie. Approx $56,000) </li></ul><ul><li>The price of the purchase must not exceed the COAHP's eligible value, and must be modest in size relative to community standards. (i.e. $196,000) </li></ul><ul><li>Must not sale or rent home for 20 years. Otherwise pay 5% of the capital. </li></ul>
  10. 10. Land Transfer Tax Refunds for First-Time Homebuyers <ul><li>The maximum amount refundable is $2,000 </li></ul><ul><li>Reduced if one or more of the purchasers are not a first-time home purchaser (parent/child) </li></ul><ul><li>The purchaser must occupy the home as his or her principal residence no later than nine months after the date of the conveyance or disposition. </li></ul><ul><li>The purchaser cannot have previously owned a home, or had any ownership interest in a home, anywhere in the world, at any time. </li></ul><ul><li>If the purchaser has a spouse, the spouse cannot have owned a home, or had any ownership interest in a home, anywhere in the world, while he or she was the purchaser's spouse. If this is the case, no refund is available to either spouse. </li></ul><ul><li>The purchaser cannot have previously received an Ontario Home Ownership Savings Plan (OHOSP)-based refund of land transfer tax. </li></ul>$975 $2,000 $2,975 $300,000 $0 $1,725 $1,725 $200,000 $0 $ 725 $725 $100,000 Net Tax Payable Tax Refund Tax Payable Cost of Home
  11. 11. What will the Home inspector do for you? <ul><li>Building Interior: walls, floors, ceilings, doorways, etc </li></ul><ul><li>Kitchen & Laundry Areas and Fixtures </li></ul><ul><li>Bathroom Interiors and Fixtures </li></ul><ul><li>Fireplaces & Chimneys </li></ul><ul><li>Garages & Carports </li></ul><ul><li>Building Exterior: walls, foundation, windows, etc. </li></ul><ul><li>Roof, Attic and Gutters </li></ul><ul><li>General Foundation </li></ul><ul><li>General Drainage </li></ul><ul><li>Fences & Gates, Driveway, Patios and Covers, Decks & Balconies, Exterior Stairs </li></ul><ul><li>Plumbing </li></ul><ul><li>Electrical </li></ul><ul><li>Heating and Air Conditioning Systems </li></ul><ul><li>After the inspection, the home inspector creates a report listing all defects found in the home and presents it to the home owner. </li></ul>
  12. 12. What Will Your Buyer Agent Do For You ?
  13. 13. What does it cost? house sold buyer and seller agents share the commission buyer does not have an agent, seller agents gets the entire commission commission paid by seller Buyer and seller agents share the commision paid by the seller FREE
  14. 14. PROVIDE EXPOSURE TO LISTED AND UNLISTED PROPERTIES PROVIDE A COMPARABLE MARKET ANALYSIS GIVE ADVICE AND COUNSEL WRITE THE OFFER WITH YOUR BEST INTERESTS IN MIND KEEP YOUR BARGAINING AND FINANCIAL POSITIONS CONFIDENTIAL PROMOTE AND PROTECT YOUR BEST INTERESTS AT ALL TIMES BRING ANY PROBLEMS TO YOUR ATTENTION NEGOTIATE THE BEST PRICE AND TERMS FOR YOU Buyer agent duties
  15. 15. B uyer r epresentation a greement RELATIONSHIP AGREEMENT ALLOWS US TO REPRESENT YOU NEGOTIATE ON YOUR BEHALF FULLY DISCLOSE INFORMATION
  16. 16. THREE TYPES OF HOME PURCHASE NEW HOME FOR SALE BY OWNER RESALE
  17. 17. New Home? do you need a buyer’s agent? buyers This sales rep seems really nice and honest, why do we need a Realtor?? builder sales rep Homer Builder What?? No Realtor?? Woohooo ! ! our secret is safe again!
  18. 18. For sale by owner? do you need a buyer’s agent? buyers They will give us a better price since they don’t have to pay a commission, why do we need a Realtor?? sellers We’ll get all the money in the world!
  19. 19. Resale Listing? do you need a buyer’s agent? buyers sellers seller’s agent These guys don’t have a Realtor, this should be easy! We love this house, now what ???
  20. 20. Time to Make an Offer <ul><li>Negotiation process </li></ul><ul><li>Facing Multiple offers </li></ul><ul><li>Dealing with counter offers </li></ul>
  21. 21. All About Closing… <ul><li>Closing costs </li></ul><ul><li>Title insurance </li></ul><ul><li>Land transfer </li></ul><ul><li>Moving day: keys on time </li></ul>
  22. 22. Closing Costs <ul><li>Deposit: Part of your down payment, a deposit is due upon acceptance of your offer. </li></ul><ul><li>Home Inspection : $350.00 to $450.00 + GST </li></ul><ul><li>( Appraisal : Prepared by an appraiser chosen by the lender, CMHC or Genworth (if applicable). </li></ul><ul><li>Legal Fee/Disbursements : From $1,000 to $1,200 </li></ul><ul><li>Title Insurance : $250.00 (your lawyer will specify whether a survey is necessary or if title insurance will be acceptable in lieu of a survey. </li></ul><ul><li>Home (Fire) Insurance : You will have to arrange and maintain fire and extended coverage insurance for the outstanding balance of the mortgage or the replacement value of the building. </li></ul><ul><li>Ontario Land Transfer Tax : 0.5% on the first $55,000 of the purchase price plus 1% on the balance of the purchase price up to $250,000; plus, 1,5% on any amount over $250,000 up to $400,000; and then 2.0% on the balance of the purchase price over $400,000. The land transfer tax is due on closing and reflected in the “Statement of Adjustments” which your lawyer prepares prior to closing day. (I.e., from $1,425 to $1,575 based on a purchase price between $170,000 and $185,000) </li></ul>
  23. 23. <ul><li>Interest Adjustment: Monthly: Monthly mortgage payments are usually due on the first of the month. Unless the closing date is the first of the month, you must prepay the amount of the interest accruing up to the 1st of the following month known as the “interest adjustment date” (IAD). If however, you choose bi-weekly or weekly payments your interest adjustment period may be much shorter. </li></ul><ul><li>CMHC or GE (High ratio insurance (less than 20% of the purchase price)) & PST: If your mortgage is insured by CMHC or GE the insurance premium will usually be added to the mortgage so it is not a cash requirement on closing. In Ontario the premium is subject to 8% PST, and this tax must be paid on closing. </li></ul><ul><li>Prepaid Expenses: If the vendor has prepaid any other expenses such as utilities, water and sewage taxes, condominium fees, oil in tank or property taxes, they must be compensated. This will be reflected in the Statement of adjustments. </li></ul>Closing Costs… continued
  24. 24. <ul><li>Other Fees : Occasionally, a lender or the broker will charge a fee for providing the mortgage. If so, these costs should be disclosed to you at the time the Statement of Mortgage is issued to you. </li></ul><ul><li>GST : is payable on all new homes, commercial properties and land. GST is NOT payable on un-renovated residential re-sales. </li></ul><ul><li>Moving Expenses : You may have to allow for the expense of professional mover or the rental of a moving van. </li></ul><ul><li>Decorating : Carpets, drapes, furniture and painting may be necessary. </li></ul><ul><li>Repairs : You may have some immediate renovations to do especially if the financial institution withholds some of the mortgage money on the condition specific repairs be made. </li></ul><ul><li>Tools : You may need lawn tools, garbage cans and snow removal equipment. </li></ul><ul><li>Utility Hookup : You may have to pay to have the telephone, gas and electricity connected and in some cases, pay a deposit. Contact the local utility companies directly. </li></ul>Closing Costs… continued
  25. 25. Determine Your Wants and Needs Buyer questionnaire 10 minutes

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