The first question you’re bound to ask is, “How much home can I afford?” That depends on a number of factors: Your selected location. Are you set on a specific area? Downtown? The suburbs? A rural setting?
Your preferred type of home: Detached? Semi? Duplex? High-rise? Link? Townhouse? New or Resale? There are a variety of home styles you will want to explore. Your income. After all, it’s not just the mortgage you have to take into account. There are property taxes, utilities, and in some cases condo or strata fees. As a general rule of thumb, your monthly home-carrying cost should not exceed 30-35% of your income.
Market conditions: Is it a buyers’, sellers’ or balanced market? There are also additional costs to keep in mind. It’s a good idea to work out exactly what you want and what you can afford before you begin the search. Be specific! After all, you don’t want to suddenly come to the realization that your dream house has come with a nightmare of bills and expenses.
Stick to looking at houses in your price range: The more you’ve thought it out, the better your sales representative can meet your needs. A part of deciding just what you can afford can be accomplished by meeting with your bank or a mortgage broker and negotiating a pre-approved mortgage. There are many types of mortgages and many different terms.
Research all of your options: This ensures that there are no surprises once you’re ready to make an offer. Once you’ve figured out your monthly expenses and what you can afford, you can start your search. It could happen that the first home you see is the one you want; or you might look at home after home with none of them catching your interest. Rest assured, the home you’re looking for is out there, and when you find it, you’re ready to make an offer. If your offer is accepted, the next steps are closing and moving into your new home. Purchasing a home is easy once you put your plans into action.
A real estate sales representative is a professional who can save you time and trouble. And possibly even a lot of money. You see, real estate sales representatives have the home buying experience most people lack. They know all of the steps and they are good negotiators who will work on your behalf.
A sales representative will:
- Fine-tune your wants/needs list
- Get special computer access to listing information
- Screen houses so as not to waste your time
- Arrange appointments
- Offer helpful advice about the neighbourhood
- Introduce you to trusted contacts who should be on your team, such as mortgage brokers, lawyers, and home inspectors.
- Above all, find a real estate sales representative who is a professional in the type of home you’re looking for. A country home professional may not be the urban market specialist you need. And when speaking with your sales representative, be as clear as possible about your needs
To qualify for a conventional mortgage, you simply have to have a 20% down payment of the purchase price, with the mortgage not exceeding 80% of the appraised value. If your down payment is less than 20%, then you qualify for a high-ratio mortgage. This type of mortgage requires loan insurance, which can cost an additional 0.6% to 4.50% of the mortgage amount. With this type of mortgage, you could also be limited to a maximum house price.
Over the course of your amortization period, you may have many different mortgages. The term is simply the length of time that interest rates, payment schedules and obligations to the lender exist. When the term comes to a close, you will have the option to renew your mortgage at your current or new lending institution. You can also put a lump sum toward the principal without restriction, or pay off your entire mortgage without penalty. If you wish to change the structure of your agreement during the term you may have to pay a substantial fee to the lender.
When it comes time to make an offer, your Real Estate Sales Representative can provide current market information which will aid you in presenting your offer. Your Sales Representative will communicate the offer, sometimes known as an Offer to Purchase, to the seller, or the seller’s representative, on your behalf. Sometimes there may be more than one offer on a property. Your Sales Representative will guide you through this process as smoothly and effortlessly as possible.