Where do I start my search?• Word of mouth o tell everyone you know that youre looking! You may be the first in line for that dream home not yet even on the market!
Where to start:• Newspapers and real estate magazines o these publications are free and provide a good summary of the properties best assets and photos• The internet o realtor websites like realtor.ca can help you narrow your searching perameters with a wide range of properties. o many sites let you search by location, price, number of bedrooms, acreage size etc
Some Useful Tips to Help Your Search!• Keep records o of everything!• Things to compare in the homes you see o energy rating of the home o utility costs o properly taxes and major reparis o ask to see copies of the utility and other bills
Financing and a Closer Look..• Check out the current financing on the house o if the mortgage is favorable, you may be able to take it back from the vendor or get a vendor take back mortgage to help close the deal o when the title of the property is transferred to the buyer who makes mortgage payment directly to the seller (not a banking institution)• Think twice about the house o Make sure to go back and inspect the home at different times of the day on different days. Look deeper then the attractive surface details
Making an Offer to Purchase• After you find the home you want to buy, an Agreement of Purchase and Sale is signed o it is helpful to work with a realtor to prepare your offer as the Agreement is a legal document and should be prepared carefully• Things included in the Agreement are o Your legal name o The price you are offering to pay o any items you would like included in the purchase price o amount of deposit o closing date (day you take possession) o expiry date of the offer
Other Conditions• Other conditions that you might want to include o satisfactory home inspection report o property appraisal o lender approval of mortgage financing• This means that the contract will become firm when the conditions are met
What Happens Next?• The realtor then presents the offer to the vendor. There are 3 possible responses you could receive on your end o 1. the vendor accepts your offer! The deal concludes and you move onto the next step of the process o 2. The vendor makes a counter offer, one with a higher price or different terms. This can go back and forth until price and terms are both agreed upon by both buyer and vendor o 3. You cannot pay the price of the counter offer so you walk away from the sale. Your deposit is returned to you.
Getting a Mortgage• Once your offer is accepted, go see your lender. Your lender will – verify and update your financial inforamtion – put together what is needed for the mortgage application. – ask you to get a property appraisal and/or a land appraisal, title insurance – tell you about various types of mortgages, terms, interest rates, amortization periods and payment schedules. – Depending on your down payment, you may have a conventional or high ratio
Mortgage Basics• Conventional Mortgage o when the mortgage loan is equal to or less than 80% the lending value of the property o The lending value is the propertys purchase price. The down payment for a conventional mortgage is at least 20% of the purchase price• Mortgage term o the length of time that the mortgage contract conditions (including interest rate) is fixed. o can be from 6 months to 10 years o Know your options, ask how different terms will affect you in the long term.
Mortgage Basics Contd• Mortgage interest rates o these rates are either fixed, variable or adjustable o fixed rates are locked in and will not increase for the term o variable rates fluctuate based on market conditions o adjustable rates involve both the interest rate and mortgage payments to vary based on the market conditions
Open vs. Closed Mortgage• A closed mortgage cannot be paid off before the end of its term o must make only your monthly payments, no more. o not flexible o often involve penalties and restrictive conditions• An open mortgage o is flexible. o you can pay as much as you want without penalty o a good option if you want to sell your home in the future
Amortization• The length of time the entire mortgage debt will be repaid. o The longer the amortization period, the lower your monthly payments o BUT the more interest you pay in the long run o If a mortgage term is 5 years, and the amortization period is 20 years, you will need to renegotiate your mortgage 4 times.
Payment Schedule• How a mortgage loan is repaid o done in regular payments o monthly, biweekly or weekly• A frequent payment schedule will save you for accruing large amounts of interest on your principal.
Closing Day• When you take legal possession of the home• The final signing usually takes place at the lawyers office o Your lender will give the mortgage money to your lawyer o You must give the down payment and remaining closing costs (minus the deposit) to your lawyer• Your lawyer then: o Pays the vendor, registers the home in your name and gives you the deed and keys to your home!
Moving Day• Dont forget to ask your mover for referances• Ask the mover to estimate and outline their fees o Do they charge hourly or a flat rate?• Ask your property insurance company about goods in transit for big ticket items that need to be moved• Move important papers, money and jewelry yourself
Post Closing Costs • Changing the exterior locks • Cleaning expenses • Decorating and furnishing • Appliances • Tools and Equipment