To make your home buying experience stress free and enjoyable, I will discuss the home buying process with you. I’ll shop some of Canada’s leading lenders to help get you a competitive rate with the features and benefits suited to your needs.
✦ Organize your finances well in advance. It’s important to make sure you are pre-approved for a mortgage before you start house hunting. It’s frustrating to find the home you want, only to find you can’t get the loan you need. You need at least 5% of the purchase price for a down payment. The down payment has to be in your account for 90 days unless it is a gifted down payment. Ensure that you have at least 1.5% of the purchase price left over to cover closing costs.
Closing costs are the additional expenses incurred to complete your home purchase. This includes Lawyer fees & Land Transfer Taxes. You will need a real estate lawyer to ensure all the documentation is completed accurately. Land Transfer taxes are the province’s fee for documenting a change in ownership of the property.
✦ Use a Real Estate Agent. A realtor will help you find the right home along with any conditions to consider while writing your offer to purchase. It’s ideal to get a referral from friends/family (or your mortgage broker) for a real estate agent who is familiar with the area. You’ll likely spend lot of time with your realtor searching for homes, so make sure they’re someone you feel comfortable working with.
✦ Once you find the perfect home, you and your real estate agent make a purchase offer to the home owner. The offer to purchase is a legal document that typically includes your legal name, property address, purchase price offer, deposit cheque, possession date and conditions. Conditions can include things like the lenders’ final approval of mortgage financing, property appraisal, home inspection, etc.
✦ What’s next after you make an offer to purchase? First, the owner accepts the offer. The deal is done and you move to the next step of satisfying the conditions of the offer (final mortgage approval from lender, property appraisal, home inspection,etc). The owner may counter-offer, asking a higher price or alternate conditions. You have a choice of accepting the counter-offer or making a new offer. If you reject the offer because the price is too high or you don’t agree with the conditions, the sale doesn’t go through and you get your deposit back.
✦ If the offer is accepted and all the conditions are satisfied, you send the offer to your lawyer and provide their information to the mortgage lender. This way the lender’s lawyer can send the financing documents to your lawyer. Your lawyer will prepare the documents for the closing date. The closing date is the day you legally take possession of your house and are able to move in. The final signing generally happens at your lawyer’s office.
There are few things that take place upon closing:
✦ Your mortgage lender will give the mortgage money to your lawyer.
✦ You must provide your down payment (minus the deposit) to your lawyer along with the remaining closing costs.
✦ Your lawyer will pay the vendor, register the home in your name, and give you the keys to your new home.
When you want to buy your first home, keep these steps in mind to make it an enjoyable experience!