I am writing to give you a run down on the steps and stages to purchasing your new home:
What can you afford
So the very first thing you should do is figure out what you can afford to buy, what your payments will look like and how much your down payment will afford you and what your legal costs will look like. Therefore your first appointment should be with your lender who will work through this with you. There are many different mortgage options available now so your lender will go through what will work the very best for you.
I have listed a brief note on the two options for down payment depending on what you have available:
CMHC…..Less than 20% down payment. There will be a premium which is added to the total mortgage and also PST. (please note the PST will be paid by you and cannot be added to the mortgage.)
Conventional….20% down payment. You will need an appraisal which I will request but you will be responsible to pay.
Once you are armed with your house purchase budget you can confidently move on to the next step.
I have put together a brief guide of what happens next, the order it happens and anything you now need to do to help you on this home buying journey.
Now you need to talk to your REALTOR®……ensure you pick a reputable local agent and stick with them as he/she will be an invaluable source throughout the whole home buying experience.
Start your home search….As you start looking, don’t just think about the type of home you want…think about your lifestyle and how close you want to live near amenities such as schools, highways, medical services, shopping, restaurants and recreation.
Find your home…so once you have found your home your agent and yourselves will discuss an asking price which they will then present to the homeowner. This is where your agent will negotiate for you. Once this is accepted both parties will sign the offer to purchase NB if a mortgage is involved ALWAYS ensure the offer is subject to financing.
The Agent will then send the offer to me with date of which financing is to be approved. I will put the application together with all of the information I have collected from you at the start of this process and, either order an appraisal or submit to CMHC.
The Appraisal/Approval….if you have 20% down payment I will order an appraisal of the home to confirm the value matches the price. This is something you will have to pay for once the appraisal is completed.
If you have less than 20% down I will submit the application to CMHC for approval. There is no appraisal cost (on occasion CMHC will request this but not often).
Once the appraisal is completed and value is confirmed I will send the approval letter to the REALTOR®. The sale is now agreed with no mortgage conditions .
Paperwork with me……I will now invite you back to meet and sign the documents. Once this is done I will send mortgage instructions to your lawyer.
Closing paperwork with the Lawyer….. your lawyer will firstly send you an email with closing costs. This will include the down payment, the land transfer tax and any legal fees. Once you receive this let me know and we will prepare a bank cheque which you will need to take with you to the lawyer’s appointment to sign the mortgage documents.
The documents….you will need to review and sign legal/financial documents for example:
The agreement between you and the seller transferring ownership and Title of the property.
The agreement between you and your lender regarding the terms and conditions of the mortgage.
Review all documents thoroughly and make sure your personal information is correct on all forms.
Make sure you understand all fees, if you are unsure now is the time to confirm.
Ask questions – it’s your right to fully understand any document before you sign it.
Once you have reviewed and signed all of your closing documents and you receive your house keys you are a new home owner.
Closing Day…..Your lawyer or notary will handle the following:
Arranging for delivery of closing funds to the sellers lawyer
Registering the transfer and mortgage
Releasing keys to you for your new property.
(What is “Title”…..”Title”is a word lawyers use to describe the right of ownership to land. When you purchase a home title is transferred to you, the new home owner.)
Notes about Fees and costs….
Legal/notarial fees and disbursements…….you will require a lawyer to act for you in the purchase and mortgaging of the property and you will be responsible for payment of all related fees and disbursements. Fees for these services vary so it is well worth shopping around.
Title insurance …….This is an insurance that protects against challenges to the ownership of your home or from problems related to the title to your home.
Land transfer tax…..Most provinces levy a one-time tax based on a percentage of the purchase price of the property.
Property tax/utility Bill adjustments….The purchase price of a resale home is always payable ‘subject to the usual adjustments’ at closing. This means that any amount that the seller has already prepaid will be adjusted so that you paythe excess amount back to the seller and vice versa. Most common are the adjustments on property taxes and utility bills that have been paid ahead of time.
Keep other costs in mind…….Will your new home need furniture? Carpets? Lighting? window coverings? Appliances ? are you hiring movers or renting a truck? What will you need for the move ?
Whilst these and other out of pocket costs aren’t part of the real estate transaction, you still need to budget for them. Plan your expenses as much as possible. If necessary decide what you can put off buying until later, after you move in and get settled.
On a side note remember your lender can often recommend a REALTOR® and likewise your REALTOR® can recommend lenders. If you don’t already have a lawyer we can both give you recommendations. So if you are unsure of who to talk to always ask as we all work together.
I wish you all of the very best on this exciting journey and remember I am only a phone call or email away to answer questions and help the process run as smoothly as possible.
If you are looking for a lender, you can contact us at 204-444-4646 or by email at firstname.lastname@example.org and we can put you in touch!
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