So, you've decided you want to own a home. It's a popular dream. For most people, with the
right planning, it can become reality. But there is a lot to know before you begin moving. We’ll
take you through the planning process step-by-step, to determine exactly the kind of home that's
perfect for you. We'll ask you some questions and we've provided worksheets that you can print
out and use with your Exit Realty on the Rock Agent.
What Does Your Future Lifestyle Hold?
You will want to give some thought to how long you intend to stay in your home. It may be
difficult to answer before you've even found your home, but if it's your first home give some
thought to the resale value when it is time to upgrade. On the other hand, if you're planning to
stay in your home for a long time, consider your future needs and purchase a home that will
Do You Live a Maintenance-Averse Lifestyle?
When you're looking at homes, take a look at the garden. If you don't enjoy cutting grass,
then an expansive lawn may not fit into your lifestyle. You can also evaluate the possibility of
future maintenance and repairs based on the age of the house. If you don't like the idea of major
renovations, a newer home may be your best option.
What is a Mortgage?
A mortgage is made up of two parts: principal and interest. Principal is the actual amount
borrowed. Interest is the lender's fee you are charged for borrowing.
You'll have to decide on an amortization period (the length of time it will take to completely
pay off the mortgage) and the term, or length of time each mortgage agreement guarantees the
As a mortgage broker we help guide you through this process and supply you with information.
Remember though, every time you go to a different lender and they do a credit check; it affects
your credit score – and your credit score is vital.
Amount of the Mortgage
With lower interest rates, you may qualify for a larger mortgage because your monthly payments
will be lower. But always keep in mind that the larger your mortgage, the more interest you'll
pay in the long run. That simply means your house will cost more. Also, what if interest rates
rise? Will you still be able to carry the payments comfortably?
Before considering any mortgage, consider your down payment. If you're a qualified home
buyer, you can purchase a house with a minimum 5% down payment. On a $250,000 home that
would be an $12,500 down payment, leaving you with a $238,000 mortgage. Now let's say you
decide to wait until you save another $10,000 before you buy because you think the bigger down
payment will lower your monthly payments. Your payments will change so little that you might
be better off saving $10,000 for a rainy day or a vacation or that hot tub you've been dreaming
about. With today's interest rates, it just doesn't make sense to tie up your cash, a very small
amount. You might be better off putting your extra money to work for you in another investment
with a higher rate of return.
Conventional and High Ratio Mortgages
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, or purchase price,
this way you do not have to pay a CMHC insurance fee on top of your mortgage. 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 0.5% to 3.75% of the mortgage amount.
Why go house hunting only to find that you don't qualify for a mortgage on the dream home
you've found? Having a pre-approved mortgage will give you the confidence of knowing exactly
what you can spend on a home before you start looking. You will also be protected against
interest-rate increases while you look for your new home. At our in house mortgage we can get
you preapproved the same day with the rate of interest.
At EXIT REALTY ON THE ROCK we have our own in house mortgage facility. There are no
fees and we are open daily.
Pre-Approved Mortgage Features to Look For
Competitive interest rates: You may be willing to pay a little more to get the flexible features
you desire. Example, wanting to know exactly what you will pay for 5 years, you can lock your
rate for that time.
A 90-day rate guarantee: This will protect you against rising interest rates while allowing you to
take advantage of falling rates.
Flexible payment options: These enable you to tailor the mortgage to your lifestyle. Discuss
payment frequency and lump-sum payment options.
“Time to make an offer”
For some, this is a stressful experience. After all, you and the seller may not be able to come to
an agreement and you won't get your dream home.
When you've found your home, you will make a formal, written offer to purchase. This is a
legally binding contract outlining what you will give (a combination of price and terms) in
exchange for the home. We will probably use a pre-printed form covering all of the legalities and
will modify it to cover what you want to offer.
Remember, everything is negotiable. You should ask for what you want, but keep in mind what
you're willing to give up. If you are competing in an offer, if you can live without it, don’t ask
for it. It could mean a rejected offer. Your Exit Realty on the Rock associate will put everything
in writing. Of course, the more contingencies in your offer, the less attractive it will be to the
The vendor may counter your offer with a change in conditions they wish to see.
The Offer Can be Firm or Conditional
A firm offer means that you are prepared to purchase the home without any conditions. If the
offer is accepted, the home is yours. Although a firm offer to purchase is usually preferable to
the seller, if you are unable to close you will lose your deposit and may get sued. Take time to
confirm your financing.
A conditional offer to purchase means that you have placed one or more conditions on the
purchase, such as subject to home inspection, financing or sale of your existing home. You have
not purchased the home until all conditions are met.
Acceptance of the Offer
Your offer to purchase will be presented within the time frame set out in the offer. After the
seller has reviewed the offer, it may be accepted as is, rejected, or returned with a counter offer.
The counter-offer may be in reference to the price, the closing date or any number of variables.
The offers can go back and forth until both parties have agreed or one ends the negotiations.
However, once a counter offer has expired a new offer has to be written and if another party is
interested you could then become a competing offer.
It is best to know your absolute upper limit before you begin negotiations, so that in the heat of
the moment you don't end up with a home you really can't afford or just get stubborn and lose
your dream home over a crazy condition, that in the full scheme means nothing. You should
never lose a home over an appliance, it’s a small price for your future comfort.
It's a day filled with nervous anticipation. This is the day on which all of the legal and financial
promises in the offer are met. It's the day when you get the keys and begin a new phase in your
life. Your Exit Realty on the Rock associate and your lawyer will give you all of the details on
steps and timings. All of the small details will be taken care of ahead of time, so in most cases it
will be just a day of waiting by the phone. We have a list of real estate lawyers ready to take your
call. It’s good to have an open line between realtor, lawyer and client.
Also, remember that this is a hectic day for the seller, too! Very often its moving day and they're
trying to gather all of their belongings to leave as the purchaser is trying to move in.
In brief, here's what takes place before the actual closing day:
1. A copy of the offer will have been forwarded to the office of your lawyer. Your lawyer will
have reviewed the conditions of the sale. You will have made your lawyer aware of how you,
and any co-buyers, will be registered on the title of the property, meaning whose name the home
is going in.
2. All of the conditions in the offer to purchase must be satisfied by the closing date. If one of
the conditions in your offer was a house inspection, it should have been completed by the date
shown in offer. You should be satisfied with the report, or create an amendment offer asking
various changes to be made.
3. All of your financing details will have been finalized and ready to fall into place on the closing
4. If the vendor did not have an up-to-date land survey, you'll have had one done. Your lender
will insist on it. Ideally, buyer and seller should split this cost 50/50.
5. Your lawyer will search the title of the property to ensure that you can purchase the home
without any legal problems. Your lawyer will also make sure that tax payments have all been
made and there are no liens on the home or the personal property the vendor has agreed to sell
6. You'll want to make sure that you've contacted all of the utility, cable, and phone companies to
ensure an easy transition of service and billing.
7. Your lawyer will prepare a statement of adjustment. This confirms the selling price,
adjustments, and the balance (less the deposit you provided with the offer). Your lending
institution will draw up a certified cheque for your lawyer to hold in trust.
8. Additional settlement charges will have to be paid:
Your lawyer's fee and disbursements
Tax and utility adjustments; if they have been pre-paid, you'll have to pay the vendor for the
portion of the service you assume.
You'll want to make sure your homeowner's insurance policy will be in place to cover your new
home and property once the deal is closed. Your lawyer will need a copy of the policy before
closing. Again we have an in-house insurance company to insure your home with a priority
What to Expect on Moving Day
Now there's another cost -- moving. Whether you hire professionals or strong-arm friends into
helping, be prepared for the cost of the move. Here are some suggestions on how to reduce the
cost of your move, but let's first look at how to prepare for the big day.
You will have noticed that your possessions expand to fill the space allotted. Guess what, if
you're moving into a larger home, you'll be gathering more stuff, so start out right.
Don't take it all. Before you pack it all into boxes and cart it to a new location, take a good look
at everything and find out what you can live without. This is a great time to have a garage sale
and what doesn't sell, you can give away to charity.
Have all of your change of address cards filled out well in advance. You'll want to notify friends,
family, businesses, organizations you're a member of, etc. Have the cards ready to mail once the
deal is closed. Renovate before the move. Sometimes it isn't possible, but if you have the chance
to work without the obstructions of furniture, you'll find that you can get twice the work done in
half the time.
Put the utilities in your name. Hydro, water, gas are the first companies to call. But don't forget
to coordinate your telephone and cable service. Of course, you'll want to let the companies
servicing your old home know when to disconnect service there, and never cancel insurance on
your existing home until you have cheque in hand.
You'll want to ensure that each item you own is well packed to minimize damage during travel.
Whether you're moving around the corner, across town or across the country, the moving process
is always the same.
“5 Important Costs Involved in Buying a Home”
You’ve sorted through your finances, created a monthly household budget, saved up your down
payment and made the important step of getting pre-approved for a mortgage. Good for you!
Already, you’ve done much of the financial homework needed to make your dream of owning
a home a reality. But, while you’re doing the math and adding up the amount of house you can
afford, don’t forget to factor in the additional cost involved in closing on your new home.
Here are 5 often overlooked extra costs that you’ll have to budget for while shopping for your
1. Lawyer fees. Aside from the actual legal contracts involved in the buying and selling
of a house, your lawyer will oversee other aspects of your home purchase, such as a title
search and background check of the property. Items such as ‘title search’ may show up
as a line-item cost in your lawyer fees, or may end up being an additional hidden cost.
2. Land survey. If the vendor did not have an up-to-date land survey, it’s advised to
have one done. Ideally, buyer and seller should split this cost 50/50. Your lawyer and
agent can help you with the details, but this may end up being another additional cost.
3. Home inspection. As a buyer making one of the biggest purchases of your life, it is
essential that you get an independent evaluation of a property done by a reputable
home inspector. Budget approximately $500 for this.
4. Moving costs. Remember to factor associated costs of moving into your purchase,
especially if you’re moving belongings from one part of the country to another.
5. Appliances and Repairs. Although you might be able to negotiate the sale of
appliances such as a fridge and stove into the sale of your home, you may also have to
be ready to purchases these for your home.
Ready to start looking for your new home? Call one of the Exit Realty on the Rock associates