Process when purchasing a home:
- Contact me so that we can discuss what it is you are wanting to do and then we, together, will find out what you would qualify for so that you are more prepared when shopping with your realtor.
- Contact your Realtor
- After you have written up an Offer on a home, with your Realtor, have your Realtor email me a copy of the of the accepted Contract of Purchase and Sale and a copy of the MLS Listing so that I may submit to the Lender(s) for a full “Approval”
- When writing up your Contract with your Realtor you will be writing in a “Subject to Financing” clause. This “Subject” clause should not be removed/waived until such time as all the conditions with the lender have been met and also that you have contacted your Insurance Company to be sure that the home that you are wishing to purchase can be insured against fire..etc… and that you are also aware of the cost of your insurance policy for the year.
- Take a little time and call a couple of Notarys and/or Lawyers to find out which office you would like to hire to attend on the conveyance of your purchase/mortgage. The Realtor and myself, your Broker, will need to know so that all the appropriate mortgage and conveyance instructions are sent out to your Notary or Lawyer in sufficient time to have all the paperwork prepared in a timely manner.
Down Payment:- There are 4 ways to obtain a down payment:
- You can save up your down payment prior to making the decision to purchase a home
- You can use your RRSP’s or TFSA’s – if you are a “First Time Home Buyer” there is a payback program with the Government so that you can still defer the taxes on your RRSP’s. In most case you have 15 years to replace your RRSP’s to their original amount prior to purchasing your home
- A ‘Family member’ is able to GIFT you the down payment. If a Gifted down payment is being used then you would still have to have sufficient funds in your savings for the “closing costs”. The ‘Family member’ is also allowed to “Gift” the closing costs if necessary.
- If you have a Line of Credit and can debt service the payments increased by the amount borrowed then you could use your LOC for your down payment also.
Just to clarify also….when you have an accepted Contract on a home and you are about to remove all of your “Subjects” the Realtor will request a down payment be paid into their trust. This amount has been written in the Contract of Purchase and Sale and when paid forms part of your full down payment. The balance of the down payment and closing costs is to be deposited to your Notary/lawyer prior to the completion/closing date.
ADDITIONAL COSTS when Purchasing a home:
- Appraisal, when necessary. ESTIMATED Cost – between $250.00 – $400.00 depending where the property is located.
- Home Inspection – ESTIMATED Cost – between $400.00 and $500.00
- Home Insurance – ESTIMATED Cost – you will need to consult an insurance agent but I would at least plan on a minimum cost of $1,000.00
- Property Transfer Tax – if you do not qualify for the “First Time Home Buyers” exemption – 1% of the first $200,000.00 of the “Purchase Price” and 2% of the balance of the Purchase Price (ie – Purchase of $450,000.00 home – 1% on$200,000.00 = $2,000.00 + 2% on $250,000.00 = $5,000.00 for a total of $7,000.00 over and above the “Purchase Price” which cannot be rolled into the mortgage
- Moving costs – depends on if you hire accompany to move your belongings or not but even if you do it yourself you should set aside at least $500.00 for the cost of gas, food, boxes etc.
- Utility hook up costs