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What should first-time home buyers know?
What are my closing costs when buying a home? What documents or items might I need to buy a home? What are my mortgage options? What are the rules for a 5% down payment?
What can we do to ensure we get Top Dollar when selling our Home?
Q: What are my closing costs when buying a home?
A: SURVEY (if required) the approximate cost of an in town survey will range from $ 700 to $ 800 plus GST
LEGAL FEES: Legal fees range between $ 400 to $ 500 plus any disbursements such as searches, photocopies, couriers, and mortgage arranging costs. The average fee is about $ 850 plus GST.
MORTGAGE FEES: Most mortgage companies charge an administrative fee to register a mortgage document.
HOME INSPECTION: Many purchasers require a home inspection prior to buying their new home. In most cases the purchaser will pay for the inspection, the fee is in the $250 to $300 range.
LAND TRANSFER TAX: This is a fee paid to the Provincial Government and forms part of your closing costs. As a guide, you can anticipate the fee to be about 1% of the purchase price.
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Q: What documents or items might I need to buy a home?
A: To provide the buyer with accurate information, your CENTURY 21 Sales Professional will obtain several documents.
SURVEY (freehold only)
The survey of your property, or a copy thereof, will show the legal dimensions of the property, any easements or restrictions, any fences and buildings on the property. If you can not find a copy consult the vendor's lawyer who handled the purchase of the property, the lender who gave the mortgage or possibly a neighbour.
TAX BILL
The most recent tax bill is required to provide the most up to date information to the buyer.
UTILITY SUMMARY (not applicable to condo's)
Buyers often want to know what is the cost to run the home. This can vary from family to family however the information is useful as a guide. Obtaining the cost of heat, hydro, water and cable for the previous few months to get a guide to the costs.
KEYS TO THE PROPERTY
Once your lawyer has registered your property, done the necessary paperwork and transferred the funds, then and only then, will the lawyer receive the keys to your new home. When you go to the lawyer's office, before the closing, to sign the closing documents arrange for a time and place to pick up the keys from the lawyer.
CONDOMINIUM (if applicable)
For condominium buyers you should obtain the phone number to the applicable Condominium Corporation so that you may request the most recent financial statements and budget information and be sure the balance in the reserve fund is included in the report.
INCOME PROPERTIES
The buyer will require a list of your tenants, a copy of their leases, tenant phone numbers, monthly income and expenses for the building.
For a hassle-free real estate experience, contact a CENTURY 21 Millennium Inc. Sales and Marketing Professional today.
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Q: What are my mortgage options?
A: PORTABLE: In some cases, your bank will allow you to arrange a mortgage for your new home that can be taken from one house to another should the need arise.
You may take advantage of this option to:
1) later avoiding a mortgage discharge penalty 2) keep an existing mortgage rate that is beneficial to you.
BLENDED: When you take an existing mortgage rate and average it with another rate.
CONVENTIONAL: When the amount of your mortgage is less than 75% of the value of the property you are purchasing.
HIGH RATIO: When you borrow more than 75% of the value of the property it must be insured by the borrower, through Canada Mortgage and Housing (CMHC) or Genworth Financial Canada. Usually the insurance fee (paid by the borrower) is up to 2.90% of the value of the mortgage paid to the lender to guarantee their loan. This fee is added to the value of the mortgage and does not form part of your closing costs.
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Q: What are the rules for a 5% down payment?
A: Effective May 11,1998 home buyers using the Federal Government's (CMHC) five percent down payment program will have to qualify for a mortgage at the 5 year rate instead of the current rule of qualifying at the 3 year rate. Further, buyers will have to select a mortgage term of at least 3 years. And did you know- You can buy a home with as little as a 2 percent down payment!
Additional rules are...
1) A buyers total debt service ratio (TDS) can not exceed 40%
.... your total monthly expenses cannot consume more than 40% of your income
2) A buyers gross debt service ratio (GDS) can not exceed 32%
.... your total home costs including principal, interest, taxes and heating can not consume more than 32% of your monthly income
3) Financial gifts should be in the buyer's bank account prior to making application to Canada Mortgage and Housing Corporation.
4) The maximum amortization period is 25 years
5) At the time of a mortgage application the buyer must demonstrate their ability to cover closing costs equal to at least 1.5% of the purchase price.
6) Mortgages have portability subject to CMHC rules.
7) The maximum house price to qualify for this program is not restricted in the Greater Toronto area.
8) CMHC FEES
- 75 .0% TO 80% = 1.00%
- 80.1% TO 85% = 1.75%
- 85.1% TO 90% = 2.00%
- 90.1% TO 95% = 2.75%
As a rule, Mortgage Brokers will guide you through this process. For a hassle-free real estate experience,
contact CENTURY 21 Millennium Inc.’s in-house mortgage broker. We’ll save you time and money.
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Still have questions? Get professional advice tailored to your needs at CENTURY 21 Millennium Inc.
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