Frequently Asked Questions (FAQ)
I'm ready to buy my first home - where do I start?
Your first step is to get pre-approved for a mortgage. Knowing what you're pre-approved for will allow you to know how much you can spend, allowing you to shop with confidence. Focus on saving for a down payment and closing costs, as well as, paying off or down and existing debts you may have. Your next step is to reach out to a local Realtor (like me) to start your house hunt.
What's the best time of year to purchase a home?
There is no one specific time that is best - we are always at the mercy of the market, and it will depend on factors like supply, demand and any other housing market conditions. Historically, we often see the Spring Market as the busiest time of year for transactions.
How much money should I have ready for closing costs?
Typically, closing costs will range from 1.5-4% of the home's purchase price. These costs often include legal fees, administrative fees, land transfer tax, property tax adjustments, etc. that are due payable on closing.
What does the new mortgage stress test mean?
The new mortgage rules require that all mortgage applicants quality at rate that is 2% higher than your contracted rate, or the Bank of Canada's five-year benchmark rate, to ensure that you as a borrower will be able to successfully make your monthly mortgage payments should interest rates increase.
What is mortgage loan insurance and how does it work?
Mortgage loan insurance is put in place by a lender when a buyer has a down payment that is less than 20%. This insurance protects the lender against any default in payments by the homebuyer. The cost of the mortgage loan insurance is placed on the homebuyer, it can be paid up front or added to mortgage payments. Mortgage loan insurance is offered by companies like Canada Mortgage and Housing Corp., Canada Guaranty, Genworth Financial Canada, or another approved private insurer.
Should I consult a lawyer prior to signing an Agreement of Purchase Sale?
In the Agreement of Purchase and Sale (offer), you have the option to add a clause which makes your offer conditional upon your lawyer's review and satisfaction of the contents of the Agreement of Purchase and Sale. This allows you the opportunity to obtain legal advise on the terms therein and make any necessary changes based on the legal advise receive
When do I qualify for the Land Transfer Tax rebate?
In the province of Ontario, a first-time home buyer can qualify for the Land Transfer Tax rebate of up to a maximum of $4000 of the total land transfer tax. There are different factors that will determine whether you are a first-time home buyer of not. Some of these factors include: being 18 years of age or older, being a permanent resident of Canada, you must intend to occupy the home within 9 months of purchase, you cannot have previously owned a home locally, or elsewhere in the world. A series of questions need to be answered in order to be properly assessed for your eligibility for the rebate; your lawyer can assist you with this.
Is a condominium purchase or sale different from the purchase or sale of a home?
There are several differences between a regular home purchase and sale and that of a condo. Many of these differences relate to rules, budgets, reserve funds, regulations and statutory requirements that are required to be complied with in a condominium.
What is Title Insurance?
Title Insurance is something that allows purchasers to secure an insurance policy insuring against potential risks such as: encroachments, the absence of an updated survey, zoning violations, property tax arrears, municipal work orders, etc. Your lawyer will conduct various searches to confirm compliance with these matters, however, Title Insurance can complement, or replace the need, to conduct these searches. It is best to have your lawyer explain the advantages of having Title Insurance to you.
Can I sell my house before paying off my mortgage?
It is very common to sell your home while still owing money to the lender via a mortgage, many people will have a balance owning left on their mortgage when they are ready to sell their home. It's important to check ahead of listing if you will face any penalties on paying out your mortgage - be sure to check with your bank or mortgage broker. If you proceed to list and sell, your lawyer will take care of ordering the discharge statement required to pay off the mortgage with your lender, they will then direct some of the proceeds of the sale to the lender to ensure the mortgage is paid off. After this has taken place, your lawyer will ensure that the bank discharges the mortgage from title.