Buyers Information:

Why buy a home?

There are many reasons. The main being pride of ownership, and building financial stability for the future. If you are renting, you are merely paying off your landlords mtge and providing equity for him. In todays market a 2 bedroom apt may rent for $750/monthly. That equates to servicing a $100,000 mtge including property taxes. ( see example below )

What are buyers agreements?

Buyers agreements have now become a necessity in the real estate business. Buyers agreements spell out what is expected of you and expected of your salesperson. You do not have to sign one, but understand that a salesperson can only provide you information and not advice should that be your choice. The Real Estate Council of Ontario makes it mandatory that your options are explained to you at the earliest opportunity and written acknowledgment is necessary.

How long do I need to sign up for?

There is no set time period. Normally, such an agreement will be in the 60-120 day range. Should things not work out, there is a termination agreement that can be signed by both parties to cancel the contract.

Why use an agent?

Why shouldn’t you? It does not cost you a single cent. In a extremely small percentage of cases the buyer may be responsible for paying fees, but the real estate person will make that clear prior to signing any agreements. If you are looking for that special property, you need someone searching for you on a daily basis. In most publications locally, there is a lag time between the listing date and the time the property appears in some sort of publication. You will be too late to contact an agent after the “sold” sign goes up. (see “have you got an agent to help you find a home”

How much money do I need?

In regards to a single family residence, 5% down is adequate plus closing costs.

Can I buy with no downpayment?

No problem. If you have excellent credit and been on the job for a couple of years, it is now possible to finance 100%, however the rate of interest will be higher than normal.

What about multi family dwellings?

Downpayments can vary. How many units is it, is any component commercial, is it going to be owner occupied. Contact your financial institution for details in regards to your particular situation

Can I borrow my 5% downpayment?

No, but if you have family members that actually have the cash, it can be gifted to you

What do I need for closing costs?

Every transaction if different. Generally you can call several lawyers and get estimates on their fees. Disbursements (cash that needs to be paid out for fixed costs) can also vary. Some of the big ticket items are surveys and land transfer tax. Closing costs, however, can be borrowed unlike downpayments. Typically, closing costs will be in the $2000-3000 range.

How much can I spend?

Again an individual choice. Some people choose to extend their available financing to its absolute limits, others have the means to spend more but choose not to. Before you start looking, visit your financial institution and get pre-approved.

What are cash back programs?

Certain institutions have programs available to provide cash back on closing. For example, you purchase a home for 100,000 with 5 % down leaving a mortgage of approximately 95,000. You apply for a 5% cash back and will receive on closing a cheque for about $4,800 that can be used in whatever way you wish. Whats the catch? You will be paying a higher interest rate than if you had selected a non cash back mtge. Rates and amounts will vary

Do I require a home inspection?

No, but we recommend it. A home inspection is a form of insurance. If the inspector points out defects, you may have the option of walking away from the deal or have the seller rectify the problem for you. Even though the inspection may not show any present major defects, the inspector may be able to show you some future problems that may be averted. Inspection costs may vary but expect to pay somewhere in the $300 range.

Why do I need mortgage insurance?

It is a government regulation that if the property has a loan to value ratio of less than 25% than mtge insurance is necessary. Do not confuse this with life insurance. The purpose of this type of insurance is to cover the financial institution should you default on your mortgage payment. The fee is based on a sliding scale and is added on to your mortgage.