Navigating the Rocky Shores of Mortgages

Few events cause such a variety of contradictory feelings as purchasing a new home. While the pride you take in home ownership can make you want to dance and sing, getting the financing you need for that mortgage —and the dreaded signature on that dotted line — can make you want to hide under the bed.

We are here to help you deal with this most difficult part of home ownership – the mortgage approval process. Feel free to get in touch with us at any time with questions and concerns.

Money Down

Initially, you will almost always need to put down some money up front. There are options available with zero down payments, options, and we are glad to talk about these with potential customers. However, you should probably expect, as a baseline, the need to put at least 5% of the total purchase price down up-front.

 

If you can afford putting down 20% of the price, it may be worth it, as you will not have to have the mortgage insured via the Canadian Mortgage and Housing Corporation (CMHC). Insuring the mortgage through the CMHC costs you an additional 2.5% (give or take) of the purchase. It is possible to include this additional fee in the mortgage itself, but there’s no reason to pay this enormous sum if you don’t have to.

Other Options

There are other options, as well, that most people never recognize when entering into a mortgage. How quickly most people will sign the contract, too frequently without even reading it, never ceases to surprise us! Given the amount of money you are spending, and how much you are committing to, we recommend that you explore as many options as possible.

 

Depending on what you are comfortable with, you can also access a number of different terms for your mortgage. Do you want a variable interest rate, or would a fixed rate, with its increased security, be better for your family? This is an important factor with long-lasting repercussions; fortunately, we can use our expertise and experience to help you make the correct decision for yourself and your family.

The First Rule of Starting a Mortgage…

One basic rule of thumb that we can offer is to should always put down as much as you can. While it may mean short-term sacrifice, it always benefits you in the long-term by ensuring that you save money and pay off your mortgage as quickly as possible.

 

The second simple piece of advice we can give you when looking for a mortgage is to consider the timing. Shopping around at different places is a good idea. Brokers and banks can both find you good rates, and most will give you a time period where the rate is guaranteed. If you’re time-conscious, this lets shop around with knowledge of how much you can afford to spend.

 

Depreciation of the value of a property’s is another important factor. While its value will not depreciate anywhere near as much as a car’s, a home’s value will depreciate nonetheless. This is doubly true when purchasing a new house. Most people combat this depreciation by performing various home improvement projects over the period of their occupancy – not only does this increase the home’s value, it also improves your quality of life!

 

When looking to get a new mortgage, make sure to keep these tips in mind. As your REALTOR®, we are here to help you navigate the rocks and shoals that are modern mortgages.

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You’re in good financial shape, tired of renting and starting to think about buying your own home. To make that dream into a successful reality there are some basic steps that you shouldn’t overlook.

Don’t Skimp on the Research

Did you think your research days ended when you had that college diploma in hand? Not so. To find your perfect home you need to figure out your wants, needs, where you want to live, what kind of home you want and most importantly, how much you can realistically afford to spend.

Pull out that sheet of paper and do the trusted want list vs. need list. As an example, you have a family of four and realistically want at least three bedrooms preferably four. That’s a need. You also want a pool. That’s a want. If you can’t get both in your price range in a desirable location, you may have to sacrifice that pool. Getting these sorts of things down on paper makes these types of decisions easier. Check out the neighbourhoods and find out what kind of homes appeal to you. Ranchers, vintage Victorians, Colonials, perhaps even a condo? Look at your list and see what works best.

Determining your budget is probably the easiest bit of research. Get preapproved for a mortgage. That will automatically give you the maximum amount you can spend on a property. Avoid the heartache of finding a property you love and then finding out it’s priced way outside your ball park.

Find an Agent

If you haven’t already found a REALTOR®, this is the time to do so. Now you’re ready to advise the agent about those wants and needs, your home and neighbourhood preference and that all important budget.

The House Hunting Experience

Your agent will use all the research information you provided to find properties for you to view. You can also use my MLS® search to do a bit of looking on your own. Yes, more research. If you find anything you like let your agent know.

 

Next is the actual visit to a property. The tendency for some new home buyers is to focus too much on the visual appeal and not pay enough attention to what’s beneath the surface. Curb appeal is important and often an indication of how a home has been maintained. But, you’re considering spending a large amount of money and you want to be reasonable sure you’ll have no “surprises” after you move in.

 

Some of the items you should consider in a potential home include the condition of the wiring, the number and type of power outlets, maintenance and age of the  heating system, condition of roof and foundation, window condition and if the plumbing is in good shape. Granite counter tops and decadent bathrooms are lovely, but you want the bones of the house to be up to snuff. If you are serious about a property get a home inspection for peace of mind.

Time to Offer

You’ve decided on your dream home and now it’s time to make an offer. Your REALTOR® can help you come up with a reasonable price. If your offer is below asking price you may have a bit of negotiating in your future. Set an expiration date for the offer and a closing date for the sale. Add any applicable conditions, such as surveys, title checks and inspections. You might also put in that the sale is contingent upon your getting a mortgage with a favourable interest rate. If you have to sell your current home you might have that on your condition list.

Closing the Sale

Once all parties have agreed on price and the conditions are met the sale is now binding. Be sure of your choice before signing the bottom line to avoid loss of deposit or possible legal action should you change your mind. You’ll need to get insurance on the property to satisfy the lender. Your agent and lawyers will be filing documents, transferring titles and distributing money. After all the legalities are complete the house is yours.

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