Ready to Buy?

If you have made the big decision to buy a home read on for the next step!

The majority of home purchasers will select a knowledgeable Realtor to show them numerous homes and negotiate the best possible price for their dream home. When purchasing or selling a home with a Realtor, make sure you sign an Agency Agreement to determine if the Realtor is acting on the Purchaser's or Vendor's behalf.

Some Purchasers and Sellers will try to buy or sell privately. However, this process is not recommended for everyone. Without Real Estate and Legal knowledge problems may arise when determining the real market value and legal steps that must be followed.

When viewing Builder's Model Homes, remember that the sales person at the site is representing the builder. If you are working with a Realtor it is recommended that you let them represent you as the "Buyer Agent". This means that they are working on your behalf and looking out for your best interests not the builder's. Builder's Purchase Agreements are more complicated than a standard Agreement. Therefore, it is always advisable to have your Realtor or Lawyer review the document before signing.

We work regularly with trusted referral partners- please contact us directly if you need a trusted realtor, builder, or lawyer- we can help!

Home Financing Checklist

If you're thinking of purchasing a new home or refinancing or transferring your mortgage on your existing home, finalizing the paperwork is one of the last steps you take toward completing your home financing. Arriving prepared with all the documentation you need will make the process quick and easy!

What information to bring about your current property: Recent mortgage statement most recent property tax bill/statement Legal description of Property: You can find this on: Original Purchase Agreement Property Tax Statement Property Value - to help estimate your property value, refer to: Recent Property Tax Assessment and/or Neighbourhood sales comparables (MLS listings) Some of the common questions that you may asked to complete your mortgage application: What current assets or savings do you have? What current liabilities do you have? (Credit bureaus will ensure payments and balances are recorded but it's good for you to know to verify accuracy .) Specific questions about the property:   How much are the annual property taxes and heating costs? If the property is an condominium, what fees are associated with the corporation? What is the total square footage of your home? What is the total square footage of the land? Other Documents/Information Required Income Confirmation: If salaried or hourly employment (full time or regular part-time) - provide one of the following: A letter from your employer on Company Letterhead which includes your name, salary or hourly pay rate and name and title of person signing the letter. Current pay stub If self-employed or on contract, and/or you wish to include bonuses, overtime, gratuities or profit sharing, provide your last two years Notice of Assessments (NOA) from Canada Revenue Agency.   Let us be your guides!  If your income source is something other than mentioned above, please give us a call for more information on the type of income confirmation required.

Comparing and considering a secured LOC?

You may see some advertising from one of the big banks about LOC's at prime + .50%. This is an attractive offer however it isn't new. This bank is just jumping on the bandwagon now

Banks,through the broker channel, have offered prime +.50%  for well over a year now. Even better, prime +.25% can be found.

Comparing and considering a secured LOC?

 
Here are some common differences that separate competing lines of credit:

• Mortgage features and rates
  • This is obviously a factor if you’re getting a mortgage along with your credit line—i.e., a readvanceable mortgage.
• Interest offsetting
  • National Bank and Manulife have this feature, and it’s a helpful way to save interest.
• Number of sub-accounts
  • Multiple sub-accounts are useful if you need to track interest separately for investment or business-related borrowing.
• Online transfers directly from the LOC
  • This is a convenience feature that lets you pay bills or fund an investment account directly and automatically from your LOC.
• Credit line portability
  • Portability is nice if you move and want to bring your LOC (and its interest rate) with you.
• Ability to lock in
  • Some lenders let you convert individual portions of your prime + 0.50% LOC to a discounted fixed or variable-rate mortgage, any time and at no cost.
• Free banking
  • This can be worth $500+ over five years.
• Linked bank cards
  • Some lenders offer a credit or debit card that’s linked to your LOC.

If you need a hand sorting this all out, call me today. I will compare all the banks’ credit lines for you and suggest the cheapest option with the most flexibility.

Home Inspections

Buying a home is one of the most important and expensive purchases that an individual will likely ever make in their lifetime. When purchasing a home there is not a guarantee nor a money-back/return policy if you are not satisfied.

It is always a good idea to have a home inspection completed when purchasing a home. Please remember, an inspection is not a warranty or a guarantee. The inspection report is intended to educate you regarding the overall condition and functioning of the housing system. This enables you to make an informed decision about buying your home.

An inspector should provide a detailed written report. The report will detail any repairs that are required immediately or in the foreseeable future. The Purchasers usually accompany the inspector during the home inspection. This allows the Purchasers to walk through the house with the inspector to see any concerns he may locate plus the opportunity to ask questions while at the house.

Professional Inspectors can be located through Professional Associations (Canadian Association of Home and Property Inspectors, ) or your Real Estate Representative. In most Provinces, inspectors are unregulated so you should always ask questions regarding:

• The inspector's qualifications
• You may ask for 3 references
• How long has the inspector been in business
• Do they have "errors and omissions insurance"

"Errors and omissions insurance" is very important. If the home you are buying requires a costly repair that the inspector didn't report, then the inspector can be held financially responsible for the cost of the repair. The insurance can be required to pay the claims.

Though prices vary, a typical house inspection will set you back $500 and three hours. If that sounds like a lot, remember that your home may be the most expensive and most important purchase you will ever make. And there's no money-back guarantee.

If you have put a condition in your "Offer to Purchase" for a satisfactory home inspection, then you are responsible for paying for the cost of the report. The report is therefore yours to keep.

Credit Line vs Reverse Mortgage

I read the fine print: that's what I do to ensure you get a solution that fits your needs rather than the flavour of the week. In the fine print of a credit line agreement it says ( or a version of ) :

Your credit limit, interest rate, minimum payments required and other terms of your line of credit agreement may be changed at our sole discretion and without prior notice to you…

While a bit harsh, conditions such as the above are in fact part what allows the great rates offered on lines of credit.  However as it pertains to seniors, possibly your parents and grandparents, these hallmarks of a “demand loan” provide little in the way of piece of mind.

A reverse mortgage on the other hand, has a number of structural features that guarantee greater lending safety for the client:

1. No payments required – if rates do ever increase, this will at least guarantee that there will be no additional impact on their monthly cash flow and that’s on top of the zero impact it has all along.
2. No maturity date – as long as a client lives in their home they can enjoy their reverse mortgage.  There is no age limit, so if a 55 year old lives to 110 years of age, that’s 55 years they will have the loan.
3. No need to re-qualify – this is true even if property values decrease. 
4. No reduction of credit limits – you get to keep what we said you can have from the start.
5. Clients are never asked to move, sell or repay their loan – even if changing valuations cause the LTV to become higher.
6. Clients, or their estate will never owe more money that the value of their home – a reverse mortgage is fully secured by their home alone.  In the very unlikely event that their debt becomes larger then the value of their home  (it has happened less that a dozen times in the 26 years CHIP has been in business), we will take the loss, regardless of other client or estate assets.

However all this comes at a cost, that is a small cost.  Homequity Bank’s current variable rate for example is 4.75%

So if you are retired or know someone who is and they are considering financing, they may be a little on the risk averse side. Consider mentioning how a reverse mortgage might be able to uniquely help them and it may go a long way to improving their piece of mind.  Let me know if I can help- it's the cornerstone of customer satisfaction.

Difference Between "pre-approval" vs "pre-qualification"

Now that you know what you want in a home, you need to find out what you can afford. There are two ways to go about this: pre-qualification or pre-approval for a mortgage.

Pre-qualification is the simpler of the two processes. It can even be done online or over the phone. When you contact me, I will ask you for some basic information about your finances ? how much money you earn, your debt load, etc. I will take this information and give you a rough estimate of how much of a mortgage you might qualify for. Simple as that!

Pre-approval is more a more in-depth process. I will perform an extensive check of your finances including your credit rating, whether or not you're a first-time buyer, what your debt load is, how much money you have to put as a down payment, etc. This figure will be a much more reliable estimate of what you can afford.

In most markets, pre-approved buyers are preferred over those that are merely pre-qualified. Being pre-approved lets the seller know you have gone through an extensive financial background check and there should be no unexpected obstacles to you buying their home.

Still confused? Speak with me directly. Get the best mortgage suited to your needs and all your questions answered in plain talk.

Let Me Guide You!

 

What do banks look for in a mortgage application? Let us be your guide!

Once your mortgage application is filled out and sent to the lender for review, the first thing they will look for is your ability to pay back the loan you are requesting. Sarah and I have a streamlined the process to help you get your "ducks in a row" prior to this review. We ensure the loan package is in perfect order and answers all the important questions up front. We know what the lenders are looking for, based on long-term relationships with them and extensive knowledge of guidelines for all the programs that are available today.

What is the lender looking for when they review your application?
The lender wants to know about your personal financial picture, including savings and credit history and your employment stability. The co-borrower's history is also taken into consideration. The lender also considers the loan amount and appraised value of the home you are looking to purchase. Not every applicant is approved the first time through the process. If the underwriter has any questions or concerns, he or she will require certain conditions to be met before they approve the loan. Pre-approval prior to house hunting lets you know exactly how much you are qualified to borrow in advance.

What can you do to make it easier?

Before taking out a mortgage it helps to establish a consistent record of paying your bills on time. If you have utility bills that are overdue, bring these up to date. Make sure you are paying credit card installments in a consistent and timely manner.

We can help you evaluate your debt-to-income ratio to determine what mortgage payment will be comfortable and affordable for you on a monthly basis. You need to have enough savings to cover your down payment and closing costs, and this saving must be on file for at least 3 months.  

If I just started a new job, can I still apply for a mortgage?

A stable employment history is important, but the lender does take human factors into consideration. If you've recently completed college or university, you have good cause to have a lack of consistent work history. If your profession is seasonal, and gaps in employment are normal in your field, there are mortgage programs that can work with your situation. If you are a freelancer or do contract work, the lender will look for consistency in income over the last two years. If you have moved employers but stayed in the same field, lenders will still consider.

Consistency is the key word in the lender's mind. But know that lenders have developed many different mortgages to meet the needs of the general public. Times keep changing and so do mortgage rules. Sarah and I stay on top of current mortgage trends. We monitor rates daily and have a support network of Realtors, CPAs, Financial Planners and Credit Repair Consultants to lend you additional assistance.

Give us a call today to find your best options!