It's best to get in touch with Joe to arrange an appointment in person or over the phone in order to assess your needs and move toward obtaining a MORTGAGE PRE-APPROVAL WHAT IS A PRE-APPROVAL ? A pre-approval is a document obtained from a financial institution or bank that will secure an interest rate for a period of time (usually 120 days) and indicates how much of a mortgage you will qualify for based on details provided in the application. SHOULD I GET A PRE-APPROVAL ? The pre-approval is not mandatory, but it does protect your buying power in case rates rise during the time you are looking for a home. It also serves to show that you are a serious & legitimate buyer, which can be important when it comes time to negotiating with the vendor (seller) of the home you wish to buy. Pre-approval is free and usually takes 24 hours to obtain. WILL YOU CHECK MY CREDIT ? Yes. This is an essential step in determining your qualifications. It is at no cost to you and will not affect your ability to obtain a mortgage. Call or email Joe to find out more about credit scoring. CAN I REALLY BUY WITH NO MONEY DOWN ? YES! However, when you make an offer to purchase, you will have to submit a deposit to show that your offer is serious. This deposit can be borrowed. On the day your purchase closes, the lender will provide 100% of the purchase price. Closing costs (the costs needed to finalize the transaction and make the house legally yours) may be borrowed as well, making your outlay of money virtually nothing. (AND the services of Rent2Mortgage are not paid for by you). WHAT ARE CLOSING COSTS ? Appraisal Fee (not applicable in all cases) An appraisal provides the lenders with a professional opinion of the market value of the property. This cost is normally the borrower's responsibility and it ranges as low as $100 for a drive-by appraisal to as much as $250 for a full appraisal. Occasionally, the costs could be slightly higher for larger, custom-built homes, or homes in remote parts. Home Inspection Fee: A professional inspection of the home, top to bottom, is for the benefit of the buyer, therefore, that's who absorbs the cost. A typical home inspection can cost anywhere from $250-$350, but our opinion is that they are well worth the investment. New home buyers may not worry about it, but a definite must for buyers purchasing properties older than 5 years. When hiring a home inspector, make sure the inspector has liability insurance, just in case a mistake is made. Fire Insurance: All mortgage lenders will require a certificate of fire insurance to be in place from the time you take possession of the home. The amount required is generally at least the amount of the mortgage or the replacement cost of the home. This cost can vary on the property size and extras being insured, as well as the insurance company and the municipality. The cost can vary anywhere from $250-$600 annually for most properties. Land Survey Fee Or Title Insurance Fee: A recent survey of the property is usually required by the lender, and if one is not available, it normally costs anywhere from $600-$900 for a new survey. Today, most lenders today will accept Title Insurance, at a much lower price of approximately $225. Legal Costs and Disbursements: A lawyer or notary will charge a fee for their professional services involved in drafting the title deed, preparing the mortgage, and conducting the various searches. The disbursements, on the other hand, are out-of-pocket expenses incurred, such as registrations, searches, supplies, etc., plus G.S.T. Land Transfer Tax: Most provinces charge a land transfer tax, payable by the purchaser, and the amount varies from province to province. This tax is based on the purchase price. We will calculate this for your home. New Home Warranty (for brand new homes) In many provinces, new homes are covered by a new home warranty program. The cost to the purchaser for this warranty is approximately $600 and should the builder default or fail to build to an agreed-upon standard, the fund will finish or repair the deficiencies. Closing Adjustments: An estimate should be made for closing adjustments for bills that the seller has prepaid such as property taxes, utility bills, and other charges. Any bills after the closing date are the purchaser's responsibility. Your lawyer/notary will let you know what they are exactly once the various searches have been completed. G.S.T.: On the purchase of a newly constructed home, GST is payable, but make sure you know who pays this, you or the builder. Therefore, on the offer, the purchase price will say "Plus GST" or "GST Included", and who gets the GST new home rebate. A lot of builders have included this cost into the purchase price so that the buyer does not have to come up with that at closing. (As well, this tax is also charged on all professional fees). NOTE: A safe estimate of closing costs is 1.5% to 2.0% of the purchase price of the home (e.g. up to $6,000 on a home of $300,000). As noted earlier, these costs may be borrowed in addition to receiving 100% purchase financing. USING RRSPs FOR DOWNPAYMENT ON A HOME
The federal government offers a tax-free withdrawal from a Registered Retirement Savings Plan (RRSP) as a down payment for first-home buyers (or someone who has not owned a home within the last 5 years). There are specific guidelines for the buyer(s) to follow to qualify for this program: 1. Meet Canada Mortgage and Housing Corporation (CMHC) First-Home Buyer Program Definitions 2. Each buyer may use up to $25,000 from their RRSP for down payment. That's $50,000 per couple 3. Revenue Canada defines this withdrawal as a loan to the buyer to be repaid in equal amounts within 15 years 4. The new property must be located in Canada and be the buyer's principal residence. 5. A T1036 application is required to be completed and taken to the institution that holds the buyer's RRSP. The RSP must be established for at least 90 days before the closing the housing transaction . To see the complete Home Buyer's Plan Guide click HERE. CALL OR EMAIL US FOR MORE INFO. |