Many homebuyers choose to have a home inspection done prior to finalizing their offer to purchase. Some lenders require a professional home inspection as well.
Right at Home Realty Inc. REALTOR
895 Don Mills Rd., Suite 202 Toronto, Ontario M3C 1W3
Agnes Buss Real estate agent sales representative
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Agnes Buss, B.Com
Sales Representative
free first time home buyers information, friendly agent
The mortgage industry has undergone dramatic changes in the last decade.
Long gone are the days when a mortgage broker was only considered a “lender of last resort.” Now a mortgage specialist has the ability not only to offer the choice of a great number of prime mortgages for clients who fit into the criteria of various lending institutions, but they can also service a client requiring a so-called “sub-prime” mortgage for individuals with less-than-perfect credit.
Mortgage agents working for Banks have also become more flexible and even mobile, allowing them to meet you anytime, anywhere.
If the payments are about the same, you will be further ahead financially by making payments on a mortgaged home rather than paying rent on a house or apartment. Paying down your mortgage is like earning the interest that you are paying on it, tax free.
Making no attempt to repay a mortgage is the worst thing that a borrower can do.
The size of mortgage that you qualify for will be greatly affected by the level of your debt at the time of your mortgage application.
A mortgage broker is an independent real estate financing professional who specializes in the origination of residential and/or commercial mortgages.
Mortgage brokers have the ability to obtain the best possible mortgage for your situation by shopping all approved lenders. Since the broker works with many different national lenders they are not forced to recommend one set of loan programs to you but can seek out many different options that are offered. Brokers do the shopping for you. When you apply for a loan with a mortgage broker you are effectively applying for a loan with all the lenders the mortgage broker is dealing with.
Mortgage brokers obtain rates at wholesale. It costs no more to do business with a mortgage broker. Mortgage brokers work on a contingency basis. They are not compensated until the loan closes. ( In some cases where a client does not qualify for a “prime” mortgage, such as a client with credit issues, a fee may be charged which is paid on closing)
When working with a mortgage broker only one credit report is used. If you were to apply to multiple lending institutions for a mortgage, each lender would do a credit check. This may lower your credit score. A lower credit score could mean you may not qualify for the best interest rate possible with any lender.
A mortgage broker deals exclusively with mortgages. By combining professional expertise with access to many different lenders and hundreds of loan products, a broker provides consumers the most efficient and cost-effective method of offering home financing options while still providing individualized attention tailored to the consumer`s needs and wants.
A mortgage broker represents you in obtaining financing that best fits your specific financial goals.
WHY USE A MORTGAGE BROKER?
Mortgage Tip #1
When renewing your loan or selling your house, look for options and features that afford you with the maximum amount of flexibility. The faster you pay down your mortgage, the sooner you will have extra capital for investments. Look for a mortgage that offers the best prepayment privileges. Increasing the frequency of mortgage payments will reduce overall interest costs.
As a general rule, you should not spend more than 30% of you gross combined family income on mortgage payments. When purchasing a home, always remember that the price is negotiable and that you can make a counter offer. Remember that flexibility allows a homeowner to exploit their cash flow and pay down the principal faster. The flexibility is negotiated before you sign on the dotted line, not after. Shop around for the lowest possible interest rate when purchasing a mortgage or any other loan.
Mortgage Tip #2
Mortgage Tip #3
Beware of the mortgage pre-approval trap as it might have you paying too much for your dream home if you accept the mortgage before you sign the offer. Just because you can borrow a large sum of money doesn't mean that you should necessarily spend that much. Remember that if you are changing mortgage lenders, the same qualifying factors may apply. You may be facing both legal and appraisal fees so investigate all associated costs before you act.
Shop around for the best deal on a mortgage before getting the pre-approval in writing. You can reduce the amount of interest paid over the life of your mortgage by opting for a shorter amortization period. If you are guaranteed an appreciation rate that is a few points above inflation and the monthly costs of renting are the same as buying, it is a good time to purchase a home.
Typically, lenders are looking for you to invest 20% of the appraised value as a down payment towards a home. They will normally advance the balance of 80%. If interest rates have fallen when the time comes to refinance your mortgage, continue the same monthly payment schedule to pay off the principal sooner than anticipated.
If your monthly mortgage payment is an odd amount, ask the lender to round it up. For example, paying an additional $21.92 per month on an $800 monthly mortgage payment may not seem like a lot but it amounts to several thousand dollars over the life of the loan.
Making weekly payments on your mortgage is an effective way of paying off the debt quickly.
When the interest rates of most lenders are at the same level, the only way for them to compete is through the terms and conditions of the mortgage.
Mortgage Tip #4
Free Mortgage Related Reports
Buying your first home is an exciting process. You determined how much home you can afford, you saved your down payment, you and your REALTOR found the perfect home and your offer was accepted. While the purchase price of your home is the largest cost you will encounter, there are other costs to prepare for when buying a home. A good estimate to assume closing costs is approximately 5% of the purchase price.
It’s a good idea to budget some extra cash to cover the cost of obtaining a mortgage and “closing” your real estate transaction. Here are some of the extra cost items you should consider:
Mortgage lenders will usually loan a percentage of the home’s purchase price or the market appraisal of the property, whichever is lower. The appraisal is either done by someone on the lender’s staff or by an outside professional approved by the lender. The cost of the appraisal is most often the responsibility of the home buyer.
Appraisal Fee
Application Fee
Land Survey Fee
Home Inspection Fee
Legal Fees
Land Transfer Tax
GST (New Homes Only)
Insurance
Find out whether or not your lending institution charges to process your mortgage application. In many cases, if you are dealing with a bank that you have other accounts with, they will waive the application fee.
Appraisal Fee
Application Fee
Land Survey Fee
Home Inspection Fee
Legal Fees
Land Transfer Tax
GST (New Homes Only)
Insurance
Lenders require a plot plan or survey of the property you intend to buy. On properties located in subdivisions in urban areas, lenders will often accept an existing survey, depending on when it was done. However, if there is no existing survey, be prepared to pay a substantial fee for a new survey.
You will need to pay your lawyer to arrange your mortgage as well as for “disbursements” such as title search, drawing up the title deed and preparing and registering the mortgage.
This tax is payable by anyone who purchases property in Ontario. A REALTOR or lawyer can help you calculate how much tax you will pay on your purchase.
If you are buying a new home, you will be required to pay Goods and Services Tax of seven percent on the price of your home. GST does not apply to most resale homes.
There are several types of insurance that may be required when buying your home. If you are arranging a “high-ratio” mortgage (less than 20% down payment) you will need to purchase mortgage insurance. Mortgage lenders require you to carry fire and extended coverage insurance that exceeds the amount of the outstanding balance of the buildings. Other insurance you may want to consider include title insurance and life insurance.
You will likely have to make property tax adjustments and interest adjustments on utility bills, heating oil etc. Ask your REALTOR to explain these additional costs so you have no surprises on closing day.
Other Costs
Finally, be sure to budget for heating, electricity, water and any immediate renovations you may have planned. It’s a good idea to put aside any spare cash and contribute regularly to a maintenance fund so you will be prepared for any repairs or upgrades you need to make along the way.
Maintenance & Utility Costs
