Tuesday, October 30, 2012

Home Buying Step by Step - Step 3

Step 3: Which Home is Right for You?

Step 3: Which Home is Right for You?


Once you have a good idea about your finances, you’ll need to think clearly about the home you’d like to buy.

Your Needs — Now and in the Future

Try to buy a home that meets most of your needs for the next 5 to 10 years, or find a home that can grow and change with your needs.
Here are some things to consider.
Size
How many bedrooms do you need?
How many bathrooms do you need?
Do you need space for a home office?
What kind of parking facilities do you need? For how many cars?
Special features
Do you want air conditioning? If so, what type?
Do you want storage or hobby space?
Is a fireplace or a swimming pool high on your list?
Do you have family members with special needs?
Do you want special features to save energy, enhance indoor air quality, and reduce environmental impact?
Lifestyles and stages
No matter what type of housing you choose, you must have a clear idea of your needs today, as well as your possible future needs. These are some examples of questions homebuyers might ask:
Do I plan to have children?
Do I have teenagers who will be moving away soon?
Am I close to retirement?
Will I need a home that can accommodate different stages of life?
Do I have an older relative who might come to live with me?
The CMHC worksheet Home Features Checklist can help you think about what you need today, and what you may need in the future. Complete the worksheet and print it.
FlexHousing™ is a housing concept that incorporates, at the design and construction stage, the ability to make future changes easily and with minimum expense, to meet the evolving needs of its occupants.

 

What Location Should You Choose?

Location is a critical factor. A home with everything you need, in the wrong location, is probably not the right home for you. Here are some things to consider about location.
  • Do you want to live in a city, a town or in the countryside?
  • How easy will it be to get to where you work? How much will the commuting cost?
  • Where will your children go to school? How will they get there?
  • Do you need a safe walking area, or recreational facility, such as a park, nearby?
  • How close would you like to be to family and friends?
Download a copy of the Your Next Move: Choosing a Neighbourhood with Sustainable Features fact sheet.

What is a Sustainable Neighbourhood?

A sustainable neighbourhood meets your needs, while protecting the environment. Homes in a sustainable neighbourhood are located near shops, schools, recreation, work and other daily destinations. This helps reduce driving costs and lets residents enjoy the health benefits of walking and cycling. Land and services, like roads, are used efficiently. Sustainable neighbourhoods also feature a choice of homes that are affordable.
In your search for a sustainable neighbourhood, here are some questions to ask:
  • Easy transportation
    • Are stores, schools, recreation facilities, restaurants, and health services within walking or cycling distance? Will your children need to take a bus to school? Can they walk to the park? Can you do most of your shopping without a car?
    • Are there nearby bus stops and cycling lanes? How long is the bus ride to work, or school? Can you safely bike?
  • House size and features
    • Are the homes compact with shared walls to reduce heating costs?
    • Are homes reasonably sized with lots requiring less upkeep?
    • Are there different dwelling types (such as single-detached, semi-detached, townhouse and apartments) in the neighbourhood?
    • Are the lots modestly sized? Roadways narrow? Driveways/parking areas small? Do natural drain ways lead to streams and storm water ponds or park lands? Is there native vegetation and streams with woodland edges?
  • “Look and feel”
    • Do the buildings have a friendly face to the street? Are the community centres, shops and meeting places welcoming?
    • Are there trees lining the street? Do you find the homes interesting to look at? Do the building sizes feel comfortable to you? Are the roads easy to walk along or cross?
  • Safety
    • Do the homes have “eyes on the street”? (In other words, are there people around who might watch out for you? Is there somewhere to go in an emergency?)
    • Is there adequate street lighting?
    • Are there safe places for children to play?
    • Are the streets safe for cyclists and pedestrians?
    • Is traffic slow moving and light?
Use the CMHC worksheet What’s Important to You to figure out the things that are important in your neighbourhood.

Do You Want a New Home or a Previously-Owned Home?

A new home is one that has just been built – no one else has lived in it yet. You might buy a new home from a contractor who has built it, or you might hire a contractor to build it for you. A previously-owned home (often called a resale) has already been lived in. Here are some characteristics of each type of home.

New Home

  • Up-to-date
    • A new home has up-to-date design that might reflect the latest trends, materials and features.
  • Choices
    • You may be able to choose certain features such as style of siding, flooring, cabinets, plumbing and electrical fixtures.
    • You may have to pay extra if you want to add certain features, such as a fireplace, trees and sod, or a paved driveway. Make sure you know exactly what's included in the price of your home.
  • Costs
    • Taxes such as the Goods and Services Tax (GST) (or, in certain provinces, the Harmonized Sales Tax (HST)) apply to a new home. However, you may qualify for a rebate of part of the GST or HST on homes that cost less than $450,000. For more information about the GST New Housing Rebate program, visit the Canada Revenue Agency website at www.cra-arc.gc.ca.
    • A new home will have lower maintenance costs because everything is new, and many items are covered by a warranty. You should set aside money every year for future maintenance costs.
  • Warranties
    • A warranty may be provided by the builder of the home. Be sure to check all the conditions of the warranty. It can be very important if a major system such as plumbing, or heating, breaks down.
    • New Home Warranty programs are generally provided by provincial and territorial governments. There are also private new home warranty programs. In some provinces a warranty may be provided by the builder of the home. Check with your realtor or lawyer/notary to find out what the new home warranty program in your province or territory covers.
  • Neighbourhood amenities
    • schools, shopping malls and other services, may not be completed for years.

Building Your Own Home

Some people prefer the challenge and flexibility of building their own home. On one hand, you make all the decisions about size, design, location, quality of material, level of energy-efficiency and so on. On the other hand, expect to invest lots of time and energy.

Resale Home

  • When the home already exists, you can see what you are buying. Since the neighbourhood is established, you can see how easy it is to access services such as schools, shopping malls, libraries, etc.
  • Landscaping is usually done and fencing installed. Previously owned homes may have extras like fireplaces or finished basements or swimming pools.
  • You don't have to pay the GST/HST unless the house has been renovated substantially, and then the taxes are applied as if it were a new house.
  • You may need to redecorate, renovate or do major repairs such as replacing the roof, windows and doors.

What Type of Home Should You Buy?

What types of homes will you be visiting with the idea of buying? Do you see yourself living in a detached single-family home? Or, perhaps a townhouse? Maybe, a duplex?

Single-family Detached

A single-family detached home is one dwelling unit. It stands alone, and sits on its own lot. This often gives the family a greater degree of privacy.

Single-family Semi-detached

A semi-detached home is a single-family home that is joined on one side to another home. It can offer many of the advantages of a single-family detached home. It is often less expensive to buy and maintain.

Duplex

A duplex is a building containing two single-family homes, located one above the other. Sometimes, the owner lives in one unit and rents the other.

Row House (Townhouse)

Row houses (also called townhouses) are several similar single-family homes, side-by-side, joined by common walls. They can be freehold or condominiums. They offer less privacy than a single-family detached home, although each has a separate outdoor space. These homes can cost less to buy and maintain, even though some are large, luxury units.

Stacked Townhouse

Stacked townhouses are usually two-storey homes. Two two-story homes are stacked one on top of the other. The buildings are usually attached in groups of four or more. Each unit has direct access from the outside.

Link or Carriage Home

A link, or carriage home, is joined by a garage or carport. The garage or carport gives access to the front and back yards. Builders sometimes join basement walls so that link houses appear to be single-family homes on small lots. These houses can be less expensive than single-family detached homes.

Manufactured Home

A manufactured home is a factory-built, single-family home. It is transported to a chosen location, and placed onto a foundation.

Modular Home

A modular home is also a factory-built, single-family home. The home is typically shipped to a location in two, or more, sections (or modules).

Mobile Home

Mobile homes, like manufactured or modular homes, are built in factories, and then taken to the place where they will be occupied. While these homes are usually placed in one location and left there permanently, they do retain the ability to be moved.

Apartment

A self-contained unit in part of a building consisting of a room or set of rooms including kitchen and bathroom facilities.

Forms of Ownership

People who do not rent their home, own it. There are two forms of ownership.

Freehold
Freehold means that one person (or two, such as joint ownership by spouses) owns the land and house outright. There is no space co-owned or co-managed with owners of other units.
Freehold owners can do what they want with their property — up to a point. They must obey municipal bylaws, subdivision agreements, building codes and federal and provincial laws, such as those protecting the environment.
Detached and semi-detached homes, duplexes and townhouses are usually owned freehold.
Condominium
Condominium ownership means you own the unit you live in and share ownership rights for the common space of the building. Common space includes areas such as corridors, the grounds around the building, and facilities such as a swimming pool and recreation rooms. Condominium owners together control the common areas through an owners’ association. The association makes decisions about using and maintaining the common space.
Condominium ownership is ownership of a unit, usually in a highrise but can also be a townhouse or in a lowrise.

Contact Amy Wilson 780-919-0475, yourmortgagegirl@gmail.com

to see more of this article at http://www.cmhc-schl.gc.ca/en/co/buho/hostst/hostst_003.cfm
 

Monday, October 29, 2012

Home Buying Step by Step

Step 2: Are You Financially Ready?

Step 2: Are You Financially Ready?


How can you know if you are financially ready to become a homeowner?
This step guides you through some simple calculations to figure out your current financial situation, and the maximum home price that you should consider.  You can lso go rght ot CMHC website to use many of their online tools or contact Amy Wilson and I can show ou how to use these tool to ensure you are ready for your home purchase. 780-919-0475 or yourmortgagegirl@gmail.com.

How Much are You Spending Now?

Calculate Your Household Expenses

Start figuring out your financial readiness by evaluating your present household budget. How much are you spending each month? Knowing exactly how much, will give you a better idea about whether you can afford to become a homeowner.
The Current Household Budget worksheet helps you take a realistic look at your current monthly expenses.
Or, you may also use the CMHC Household Budget Calculator to complete your current household budget now.

Calculate Your Monthly Debt Payments

Do you know how much debt you are carrying? You need this information to figure out whether you are financially ready for homeownership. If you decide to buy a home, mortgage lenders will ask for this information.  See below for ideas of monthly debt, If you go to CMHC's website you can fill the chart in that you see below:

Monthly Debt PaymentsAverage Monthly Amount

Calculate Your Total Monthly Expenses

Your total monthly expenses are your household expenses plus your debt payments. To calculate your monthly expenses, add the total from the Current Household Budget as Homeowner to the total from Monthly Debt Payments form, using the form below.
Household expenses
(Total from Current Household Budget)
Debt Payments
(Total from Monthly Debt Payments form)
TOTAL

How Much Can You Afford?

Before you begin shopping for a home, it’s important to know how much you can afford to spend on homeownership. You will want to plan ahead for the various expenses related to homeownership. In addition to purchasing the home, other significant expenses will include heating, property taxes, home maintenance and renovation as required. Two simple rules can help you figure out how much you can realistically pay for a home. You must understand these rules to understand if you will be able to get a mortgage.

Affordability Rule 1 - THis is a great place to get me involved - these rules are important to understand but can get a bit complicated and I am here to navigate you through them - AMY WILSON 780-919-0475 or yourmortgagegirl@gmail.com.

The first rule is that your monthly housing costs shouldn't be more than 32% of your gross monthly income.   This is your income before you pay your personnal taxes. Housing costs include your monthly mortgage payments (principal and interest), property taxes and heating expenses. This is known as PITH for short — Principal, Interest, Taxes and Heating.

If you are thinking of buying a condominium or leasehold tenure

For a condominium, PITH also includes half of the monthly condominium fees.
For leasehold tenure, PITH also includes the entire annual site lease.
Lenders add up your housing costs and figure out what percentage they are of your gross monthly income. This figure is called your Gross Debt Service (GDS) ratio. To be considered for a mortgage, your GDS must be 32% or less of your gross household monthly income.

Affordability Rule 2

The second rule is that your entire monthly debt load should not be more than 40% of your gross monthly income. Your entire monthly debt load includes your housing costs (PITH) plus all your other debt payments (car loans or leases, credit card payments, lines of credit payments, etc.). You have calculated these on the Monthly Debt Payments form. This figure is called your Total Debt Service (TDS) ratio.
Fill in the tables below to determine your GDS and TDS ratios.
GDS Ratio

(before deductions)
* Gross salary is income before taxes.


TDS Ratio
Add up your monthly payments for loans, credit cards and other debts

Your Maximum House Price

The maximum home price that you can realistically afford depends on a number of factors. The most important factors are your household gross monthly income, your down payment and the mortgage interest rate. For many people, the hardest part of buying a home — especially their first one — is saving the necessary down payment.
Note: For CMHC-insured mortgage loans, the maximum purchase price or as-improved property value must be below $1,000,000, when the loan-to-value ratio is greater than 80%.

Calculate Your Maximum House Price

Use the Mortgage Affordability Calculator below to figure out the maximum home price you can afford, the maximum mortgage amount you can borrow, and your monthly mortgage payments (including principal and interest).
  1. Interest is compounded semi-annually not in advance. The interest rate is fixed for the term of the mortgage. The interest rate is usually renegotiated at the end of the term of the mortgage.
  2. Minimum down payment may vary.
  3. These calculations are approximate. They do not account for the payment of CMHC Insurance Premiums, applicable sales taxes, closing costs, or other fees that may be required.
CMHC Mortgage Calculator is for general illustrative purposes only. The amounts it projects are based upon assumptions and estimates made according to generally accepted principles for mortgages in Canada. CMHC cannot guarantee the projections. Actual payment amount must be obtained from your lender. Neither CMHC nor any of its advisors shall have any liability for the accuracy of this information.

Mortgage Loan Insurance

Mortgage loan insurance helps protect lenders against mortgage default, and enables consumers to purchase homes with a minimum down payment of 5% — with interest rates comparable to those with a 20% down payment.
The CMHC Mortgage Loan Insurance premium is calculated as a percentage of the loan and is based on the size of your down payment. The higher the percentage of the total house price/value that you borrow, the higher percentage you will pay in insurance premiums. The cost for Mortgage Loan Insurance premiums is usually offset by the savings you get from lower interest rates.
Financing Required
Premium % of Loan
Up to and including 65%
0.50
Up to and including 75%
0.65
Up to and including 80%
1.00
Up to and including 85%
1.75
Up to and including 90%
2.00
Up to and including 95%
Traditional Down Payment
Non-traditional Down Payment
2.75
2.90
Extended Amortization Surcharges
Add 0.20% for every 5 years of amortization beyond the 25 year mortgage amortization period.
Note: The amortization cannot exceed 25 years for mortgage loan-to-value ratios > 80%.
* Premiums in Manitoba (effective July 15, 2012), Ontario and Quebec are subject to provincial sales tax. The provincial sales tax cannot be added to the loan amount.

Do Your Calculations Look Encouraging? I can help!  If you are ready, I can get you working with an excellent realtor or if you are looking for a new home I have all the connections to get you started there as well.  First Step - contact me ( Amy Wilson at 780-919-0475 or yourmortgagegirl@gmail.com to be pre qualified!)

What is your current financial situation? After doing the calculations, do you feel fairly confident about beginning the homebuying process? You’re ready to proceed with homeownership.

Do Your Calculations Look Discouraging?  I can help!  Contact me ( Amy Wilson) and we can work out a plan together with a set time frame and goals so we can get you into a home!

You may need to step back and make some improvements. Did your calculations show that you might have trouble meeting monthly debt payment? If that’s the case, you may find it difficult to get approved for a mortgage. Here are some things you can do to improve your situation:
  • Pay off some loans first.
  • Save for a larger down payment.
  • Take another look at your current household budget to see where you can spend less. The money you save can go towards a larger down payment.
  • Lower your home price — remember that your first home is not necessarily your dream home.
Here are some more helpful strategies:
  • Meet with a credit counsellor. He (or she) can help you figure out how to minimize your debts.
  • Buy your home through a rent-to-own program. These are sometimes provided by the builder or a non-profit sponsor.
  • Find out about programs through which you can help build your own home.
  • Ask the housing department of your municipality if any special programs exist.

What are Your Next Steps?

Get a Copy of Your Credit Report

Before approving a mortgage, lenders will want to see how well you have paid your debts and bills in the past. To do this, they consider your credit history (credit report) from a credit bureau. This tells them about your financial past and how you have used credit.
Before looking for a mortgage lender, get a copy of your own credit history. There are two main credit-reporting agencies: Equifax Canada Inc. and TransUnion of Canada. You can contact either one of them to get a copy of your credit report. There is often a fee for this service.
Once you receive your credit report, examine it to make sure the information is complete and accurate.

If you have no credit history

If you have no credit history, it is important to start building one by, for example, applying for a standard credit card with good interest rates and terms, making small purchases and paying them as soon as the bill comes in.

If you have a poor credit history

If you have poor credit, lenders might not be able to give you a mortgage loan. You will need to re-establish a good credit history by making debt payments regularly and on time. Most unfavourable credit information (including bankruptcy) drops off your credit file after seven years.
Consider getting some credit counselling if you have a history of poor credit or talk to your lender to discuss options.

Get a Mortgage Pre-Approval

It’s a very good idea to get a pre-approved mortgage before you start shopping. Many realtors will ask if you’ve been approved. A lender will look at your finances and figure the amount of mortgage you can afford. Then the lender will give you a written confirmation, or certificate, for a fixed interest rate. This confirmation will be good for a specific period of time. A pre-approved mortgage is not a guarantee of being approved for the mortgage loan.
Even if you haven’t found the home you want to buy, having a pre-approved mortgage amount will help keep a good price range in mind.
Bring these with you the first time you meet with a lender:
  • Your personal information, including identification such as your driver's license
  • Details on your job, including confirmation of salary in the form of a letter from your employer
  • All your sources of income
  • Information and details on all bank accounts, loans and other debts
  • Proof of financial assets
  • Source and amount of down payment and deposit
  • Proof of source of funds to cover the closing costs (these are usually between 1.5% and 4% of the purchase price)

Make Your Mortgage Work for You

Your lender or broker will offer you several choices to help find you the mortgage that best matches your needs. Here are some of the most common. Amy Wilson - yourmortgagegirl@gmail.com

Amortization Period

Amortization refers to the length of time you choose to pay off your mortgage. Mortgages typically come in 25 amortization periods. However, they can be as short as 15 years. Usually, the longer the amortization, the smaller the monthly payments. However, the longer the amortization, the higher the interest costs. Total interest costs can be reduced by making additional (lump sum) payments when possible.

Payment Schedule

You have the option of repaying your mortgage every month, twice a month, every two weeks or every week. You can also choose to accelerate your payments. This usually means one extra monthly payment per year.

Interest Rate Type

You will have to choose between “fixed”, “variable” or “protected (or capped) variable”. A fixed rate will not change for the term of the mortgage. This type carries a slightly higher rate but provides the peace of mind associated with knowing that interest costs will remain the same.
With a variable rate, the interest rate you pay will fluctuate with the rate of the market. Usually, this will not modify the overall amount of your mortgage payment, but rather change the portion of your monthly payment that goes towards interest costs or paying your mortgage (principal repayment). If interest rates go down, you end up repaying your mortgage faster. If they go up, more of the payment will go towards the interest and less towards repaying the mortgage. This option means you may have to be prepared to accept some risk and uncertainty.
A protected (or capped) variable rate is a mortgage with a variable interest rate that has a maximum rate determined in advance. Even if the market rate goes above the determined maximum rate, you will only have to pay up to that maximum.
Use the Mortgage Payment Calculator to find how much and how often your payment will be. Compare options and find one that's right for you.
CMHC Mortgage Calculator is for general illustrative purposes only. The amounts it projects are based upon assumptions and estimates made according to generally accepted principles for mortgages in Canada. CMHC cannot guarantee the projections. Actual payment amount must be obtained from your lender. Neither CMHC nor any of its advisors shall have any liability for the accuracy of this information.

Mortgage Term

The term of a mortgage is the length of time for which options are chosen and agreed upon, such as the interest rate. It can be as little as six months or as long as five years or more. When the term is up, you have the ability to renegotiate your mortgage at the interest rate of that time and choose the same or different options.

“Open” or “Closed” Mortgage

An open mortgage allows you to pay off your mortgage in part or in full at any time without any penalties. You may also choose, at any time, to renegotiate the mortgage. This option provides more flexibility but comes with a higher interest rate. An open mortgage can be a good choice if you plan to sell your home in the near future or to make large additional payments.
A closed mortgage usually carries a lower interest rate but doesn’t offer the flexibility of an open mortgage. However, most lenders allow homeowners to make additional payments of a determined maximum amount without penalty. Typically, most people will select a closed mortgage.

Up-front Costs

TED AND SHAYLA

Ted and Shayla have found a newly built home. The asking price is $200,000 including the GST.
After adding together wedding gifts, a small inheritance and other savings Ted and Shayla found that they have $28,900.

Figure Out the Up-front Costs

There are many up-front costs when you buy a home. Early planning will help make sure things go smoothly.

Down Payment

A down payment is the part of the home price that does not come from the mortgage loan. The down payment comes from your own money. You can buy your home with a minimum down payment of 5%, if you have mortgage loan insurance from CMHC. You need a down payment of at least 20% for a conventional mortgage.

Deposit

The deposit is paid when you make an Offer to Purchase to show that you are a serious buyer. The deposit will form part of your down payment with the remainder owing at time of closing. If for some reason you back out of the deal without having covered yourself with purchase conditions, such as financing, home inspection, etc., your deposit may not be refundable and you may be sued for damages. The size of the deposit varies. Your realtor or lawyer / notary can help you decide on the amount.

Appraisal Fee

Your mortgage lender may ask you to pay for a recognized appraisal in order to complete a mortgage loan. An appraisal is an estimate of the value of the home. The cost is usually between $250 and $350 and must be paid when you contract for those services.
Having an independent appraisal done on a property before you make an offer is a good idea. It will tell you what the property is worth and help ensure that you are not paying too much.
The appraisal should include:
  • Assessment of the property's physical and functional characteristics
  • Analysis of recent comparable sales
  • Assessment of current market conditions affecting the property
Ask your realtor or other member of your team to help you find an appraiser.

Mortgage Loan Insurance Premium

If you make less than a 20% down payment, you have a high-ratio mortgage. With a high-ratio mortgage your lender will need mortgage loan insurance. Mortgage loan insurance lets you buy a home with a minimum down payment of 5%.
Most Canadian lending institutions require mortgage loan insurance because it protects the lender. If the borrower defaults (fails to pay) on the mortgage, the lender is paid back by the insurer. You pay a premium for mortgage loan insurance. Your lender will add the mortgage loan insurance premium to your monthly payments, or ask you to pay it in full upon closing.

Mortgage Broker’s Fee

You may have decided to use a mortgage broker. The job of the mortgage broker is to find you a lender with the terms and rates that will best suit you.

Home Inspection Fee

CMHC recommends that you make a home inspection a condition of your Offer to Purchase. A home inspection is done by a qualified home inspector to provide you with information on the condition of the home. It generally costs about $500, depending on the age, size and complexity of the house and the condition that it is in. For example, it may be more costly to inspect a large, older, home, or one in relatively poor condition or that has many pre-existing problems or concerns.

Survey or Certificate of Location Cost

The mortgage lender may ask for an up-to-date survey or certificate of location. If the seller has a survey, but it is more than five years old, it will probably need to be updated. You should ask the seller to provide an updated survey, especially if there has been a new addition, deck or fence built close to the property line. If the seller does not have one, or does not agree to get one, you may have to pay for it yourself.
Remember, you must have permission from the property owner before hiring a surveyor to go onto the property. Ask your realtor to help co-ordinate this with the owner. A survey or certificate of location can cost $1,000 to $2,000.

Title Insurance

Your lender, lawyer, or notary may suggest that you get title insurance. This will cover loss caused by defects of title to the property.

Land Registration Fees

Land Registration fees are sometimes called Land Transfer Tax, Deed Registration Fee, Tariff or Property Purchases Tax. In some provinces and territories, you may have to pay this provincial or municipal charge when you close the sale. The cost is a percentage of the property’s purchase price. Check on the internet or with your lawyer (or notary) or other team member to find out about the current rates. These fees can cost a few thousand dollars.

Water Tests

If the home has a well, you will want to have the quality of the water tested to ensure that the water supply is adequate and the water is drinkable. You can negotiate these costs with the vendor and list them in your Offer to Purchase.

Septic Tank

If the house has a septic tank, it should be professionally checked to make sure it is in good working order. You may negotiate the cost with the vendor and list it in your Offer to Purchase.

Estoppel Certificate Fee (does not apply in Quebec)

This applies if you are buying a condominium, or strata unit, and could cost up to $100. Also called a Status Certificate it outlines a condominium corporation’s financial and legal state.

Prepaid Property Taxes and/or Utility Bills

Property taxes are charged by the municipality where the home is located. They are based on the value of the home. The seller may have already paid property tax or other expenses that apply to the time after the house passes into your hands. You need to pay back the seller for taxes and other costs (including items like filling the oil tank).

Property Insurance

The mortgage lender requires you to have property insurance because your home is security for the mortgage. Property insurance covers the cost of replacing your home and its contents in case of loss. Property insurance must be in place on closing day.

Legal Fees

Legal fees and related costs must be paid on closing day. The minimum cost is $500 (plus GST/HST). In addition, your lawyer or notary will charge you direct costs to check on the legal status of the property.

Other Costs

Depending on your situation, you may have some other initial expenses to consider:
  • Moving expenses
    Whether you’ll be hiring a moving company, or renting a truck and asking friends for help, there are likely to be moving expenses.
  • Renovations or repairs
    Can renovations, or repairs, be delayed, or are some necessary to do immediately?
  • Condominium Fees
    Do you have to make the initial payment for these monthly fees?
  • Service connection fees
    Telephone, gas, electricity, cable TV, satellite TV, Internet, and so on, may charge service connection fees. Some utilities may ask you to pay a deposit.
  • Appliances
    Does your new home come with appliances? Do you already have your own?
  • Gardening equipment
    Will you need to buy gardening equipment, the first summer in your new home?
  • Snow-clearing equipment
    Will you need to buy snow-clearing equipment, the first winter in your new home?
  • Window treatments
    Do blinds, or curtains come with the house?
  • Decorating materials
    Do you want to re-paint or apply wallpaper? Do the floors need to be refinished or re-carpeted? Do you have all the tools you need for redecorating?
  • Hand tools
    Do you have the basic hand tools you’ll need for your new home?
  • Dehumidifier
    Will you need a dehumidifier to control moisture levels?

Friday, October 26, 2012

Home Buying Step by Step



Is Homeownership Right for You?

Step 1: Is Homeownership Right for You?

So, you’ve finally decided to fulfill a lifelong dream and buy your own home… how exciting! You are ready to fulfill your dream of having a place to call your own.
Buying a home is one of the biggest emotional and financial decisions you'll ever make. Prepare by learning about the process of homebuying and the responsibilities of homeownership. The differences between renting and buying a home are vast, and there's a long list of pros and cons for both options. And, remember — there is no one best decision for everyone. Before moving forward, though, here are some questions to consider.
  • Do you have the necessary financial management skills?
  • How financially stable are you?
  • Are you ready to take on the responsibility of all the costs involved in homeownership, including mortgage payments, repairs, and maintenance?
  • Are you able to devote the time required for home maintenance?
There are pros and cons for both renting and buying. Everyone must make his or her own best decision. Buying a home is not for everyone.  Are the advantages of owning your home really bigger than the advantages of renting? Are the disadvantages of owning your own home really smaller than the disadvantages of renting? If homeownership is for you, you must be both financially and emotionally ready. Buying a home isn't only about money. You should listen to your heart… and take an honest look at your lifestyle.

I am here to help you with the finanical side once you know you are ready to look at your home buying options.

http://www.cmhc-schl.gc.ca/en/co/buho/hostst/hostst_001.cfm
Go to the link above if you wish to work on a worksheet provided by CMHC - all the infromation above can also be found on the CMHC website.

Amy Wilson
Verico Brokers For Life
780-919-0475
yourmortgagegirl@gmail.com
www.yourmortgagegirl.ca
 

Wednesday, October 24, 2012

Canadian Debt


 

A gift that could last a lifetime

Financial literacy is important, and teaching young people about it is a crucial step in changing how Canadians manage their debt.  The average Canadian spends more than they earn and this has to change.  We can still live a great life but we have to learn to live within our means and the difference between good debt and bad debt.
Buying a home you can afford and creating a plan to pay it off before you retire, is good debt.  Paying for your trip to the Caribbean on your credit card without the ability to pay it off when you return may be fun, but it's definitely bad debt.  
There is a huge difference, and we as Canadians need to get back to basics and be more responsible so that the next generation can enjoy a country that is in better shape than it is today. 
That is a much better gift for our youth than buying them a $200 pair of jeans just because they must have them, or buying them a car because riding the bus is somehow below them!  Remember your kids are too busy watching what you do to listen to what you say.
If you need help to teach your children or if you want to learn more on how to control your own debt and save for your home please give me a call at 780-919-0475 or email Amy Wilson at yourmortgagegirl@gmail.com.

Wednesday, October 17, 2012

Canadians confident in housing, but most not ready to buy


Survey results suggest most Canadians feel now is a great time to buy a home, but not for them personally.

 
Survey results suggest most Canadians feel now is a great time to buy a home, but not for them personally.

 
A poll done for Royal Bank of Canada found 59 per cent of those asked said now is the time to get into the housing market, as opposed to waiting until next year. That was up four percentage points from when the same question was asked in a survey a year earlier.

 

However, 73 per cent said they are unlikely to buy a home within the next two years, up two points from the previous year.

 

"There's a mix of opinions on the housing market as Canadians still feel confident about real estate but are a little uncertain about where the market is heading and when it makes sense to buy," Marcia Moffat, RBC's head of home equity financing, said in a statement.

 

**When it came to property values, Quebecers were the most confident homeowners in the country, with 78 per saying they could withstand a potential downturn in house prices, compared to 74 per cent nationally. Yet 57 per cent of Quebecers - slightly below the national average - said now is a good time to get into the housing marking.

 

Not surprisingly, 69 per cent of Albertans said now was a good time to buy a home, with commodities-fueled growth driving a housing boom in that province.

 

Nationally, 88 per cent considered housing a good investment - including nine out of 10 Ontarians, despite concerns of a condo bubble in Toronto - while 68 per cent said the value of their homes had increased over the last two years. Just 47 per cent of Canadians said housing prices would be higher a year from now.**

 

The survey was done with 2,006 adult Canadians in an online panel by Ipsos Reid between Jan. 24 and 30. A random sample this size would have accurately represented the population within two percentage points, 19 times out of 20, RBC said.

 

Meanwhile, real estate firm Royal LePage released a report Thursday saying housing prices in Canada were up in the early part of this year after an "unusually high" number of sales resulted in tight inventories. Record-low mortgage rates at less than thee per cent, on five-year fixed plans, were part of reason why activity was so high, Royal LePage said.

 

It said the average price of a standard two-storey home in the first quarter was $398,282, up five per cent from a year earlier. The average bungalow price was up 4.4 per cent to $356,306, while the going rate for a condominium rose 2.2 per cent to $243,153.

 

 

 

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