Complete Home Buyer's Guide For Canada , livre ebook

Self-Counsel Press - Frank Dodich , Alma Pasic , Geraldine Santiago , Hilde Deprez

Découvre YouScribe en t'inscrivant gratuitement

Je m'inscris

Obtenez un accès à la bibliothèque pour le consulter en ligne
En savoir plus

86 pages

English

Vous pourrez modifier la taille du texte de cet ouvrage

Obtenez un accès à la bibliothèque pour le consulter en ligne
En savoir plus

A propos
Informations
Extrait

Description

Learn what you need to know to purchase your home (be it a house or a condominium) with confidence! Whether a veteran or a novice, buying a home can be intimidating and worrisome. The Complete Home-Buyer's Guide for Canadians is written by an experienced real estate agent who specializes in working with first-time home buyers.
NOTICE TO READERS ix
ACKNOWLEDGEMENTS xi
FOREWORD xiii
1 GETTING FINANCING 1
What Is a Mortgage? 1
What are the types of mortgage loans? 3
Amortization Period 5
Term 6
A Pre-Approved Mortgage and Its Advantages 6
What documents do I need to provide to a lender? 7
Understanding Where You Stand with the Lender 8
Criteria for the self-employed or those earning commissions 8
Changing jobs 8
History of bankruptcy 8
Credit Report 8
Acquiring a co-signer or guarantor 9
Minimum age to purchase a home 9
Calculating affordable mortgage payments 9
iii
k
Correlation between interest rates and borrowing capacity 9
Lenders might not look at your income and other financial obligations 10
Where Do I Get a Mortgage? 10
The Difference between a Bank’s Mortgage Specialist
and an Independent Mortgage Broker 10
Letter of commitment 11
Down Payment 12
How much of a down payment do I need to buy a home? 12
Can I use the money in my RRSP to make a down payment? 13
Can I take out a loan to cover the down payment? 13
Purchasing property with only a small down payment 13
What Do I Need to Know about the Housing Market? 14
2 SEARCHING FOR A HOME 17
What Types of Housing Structures Are Available? 18
Factors to Consider When Looking for a New Home 19
Community 19
Neighbourhood 19
Transportation 20
Dwelling 21
Schools 21
New Home Warranties 21
Resale homes and new home warranties 22
Pros and Cons of Resale or Older Homes 23
The Difference between Freehold and Leasehold Interests in Land 23
Co-ownership 24
What Is the Best Time of Year to Buy a Home? 24
How long does it take to find a house? 25
Real Estate Agents 25
Responsibilities of the realtor 25
What is my relationship with a real estate agent? 26
The exclusive buyer’s agent contract 28
What time-saving technological services are available from a realtor? 28
Can I “switch” real estate agents? 30
iv Complete home-buyer’s guide for Canadians
Contents v
Homes for Sale by Owner 30
Landlord and Tenants 31
Purchasing a home with a tenant in an unauthorized accommodation 31
Your landlord offered to sell you the property you are renting 32
Choosing Your Team of Professionals 33
Do realtors provide referrals to other professionals? 34
A Realtor’s Commission and Allowable Bonuses 34
Who pays for the realtor’s commission? 34
What do realtors do to earn their commission? 35
Are realtors allowed to receive bonuses or other gifts from
financial institutions? 35
Where Do I Start Looking for Properties? 37
What is a hot sheet? 37
Pricing the Property 38
What is a fair price when I’m placing an offer? 38
Pricing properties per square foot 39
How sellers price their homes 39
What to Look for When Viewing Properties 39
Seller’s motivation 40
Prior offers 40
Property condition 40
Moving dates 40
Restrictions 41
Health, safety, and environmental concerns 42
Zoning 45
Land title search 46
City assessment 46
Fixtures and chattels 46
Area 46
Documentation to Review before Purchasing a Condominium 47
Protecting Your Legal Interests 48
3 MAKING AN OFFER 51
What Should the Offer to Purchase Include? 51
After the Offer Has Been Presented, What Are the Seller’s Options? 56
Competing or Multiple Offers 57
What Is an “All Cash Offer”? 59
What Happens When Identical Offers Are Made? 60
What Is a Back-Up Offer? 60
Can I Place Offers on Two Different Properties? 61
Contract 61
Can I back out of a signed contract at any time? 61
In what circumstance should I not go ahead with the contract? 61
What do I do once the contract has been signed by both parties? 62
4 REMOVING SUBJECTS 67
Subject Clauses 68
Why do I include subject clauses in the contract? 68
The most common subject clauses 68
Removing Subjects 68
What does it mean to remove subjects? 68
How long do I have to remove subjects? 70
Building Inspection 70
What should a building inspection include? 70
Condominium unit inspection 73
What areas of a condominium may need repair? 74
Single-detached home inspection 74
What should I look for when purchasing a single-detached home? 75
What if I don’t want to have a building inspection done? 76
Can I get a relative to inspect the building? 76
Building inspection for a remodelled property 76
Cost of building inspection 76
Can the realtor pay for the property building inspection? 77
Building inspection failure 77
Protect Yourself from a “Leaky Condo” 78
What is a special assessment? 78
Buying a Former “Grow House” 79
Oil Tanks Can Cause a Potential Problem 80
vi Complete home-buyer’s guide for Canadians
Contents vii
How can I know whether a home’s underground oil tank is leaking? 80
Provincial standards for oil tanks 80
Items to Watch out for in a Land Title Search 81
Removal of All Subjects before the Subject Removal Date 82
The Deposit 82
Can I make the down payment in two equal payments at different dates? 82
What if the deposit cheque is an NSF? 82
Where does my deposit go? 83
5 CLOSING AND COMPLETION DATE 85
What Happens at Completion? 86
Lawyers or Notaries Public at the Closing Stage 89
The role of the lawyer or notary public 89
Choosing a lawyer or notary public 90
The difference between a lawyer and a notary public 90
Adjustment Date 91
Additional Costs You May Incur on Closing 91
Property transfer tax or land transfer tax 91
Transaction levy 93
Property taxes 93
Utilities 94
Maintenance fees 94
Condominium surcharges 94
Forms 94
Confirmation 94
Appraisal fee 95
Survey certificate 95
Mortgage application fee 95
Mortgage default insurance 95
Fire and liability insurance 96
New home fees 96
Legal fees 96
Title insurance 97
Interest adjustment 98
Are any of these fees negotiable? 98
Tax Exemptions and Financial Grants Available to Home Buyers 99
GST on new housing rebates 99
Home Owner Grant 99
Tax deferral 100
Home ownership assistance programs 100
Mobile Home Ownership Program 101
Mobile Home Upgrade Program 102
What Is the Possession Date, and When Does It Occur? 102
The Previous Tenants or Owners Left the Property in a Mess 102
What If There Is a Flood in the Apartment or the Appliances Do Not Work
on Possession Date? 103
Summary 103
APPENDIX 1 105
APPENDIX 2 115
APPENDIX 3 119
GLOSSARY 123
SAMPLES
1 Mortgage Application Form 2
2 Commission Agreement 29
3 Buyer-Agent Fee Agreement 36
4 Property Condition Disclosure Form 43
5 Agreement Of Purchase and sale 52
6 Addendum 55
7 Summary Appraisal Report 63
8 Abbreviated Building Inspection Report 71
9 Buyer’s Statement Of adjustments 87
CHECKLISTS
1 The Contract 65
2 Subject Removal 84
3 Service Arrangements 88

Sujets

LAW

Real estate

Informations

Publié par	Self-Counsel Press
Date de parution	15 avril 2012
Nombre de lectures	1
EAN13	9781770407787
Langue	English

Informations légales : prix de location à la page 0,0025€. Cette information est donnée uniquement à titre indicatif conformément à la législation en vigueur.

Extrait

COMPLETE HOME-BUYER’S GUIDE FOR CANADIANS
Geraldine Santiago
Self-Counsel Press
(a division of)
International Self-Counsel Press Ltd.
USA Canada

Copyright © 2012

International Self-Counsel Press
All rights reserved.
Foreword

When I bought my first home, I was not a realtor. I found the entire buying process difficult because I didn’t know what questions to ask, where I should look, or what documents I had to review and sign. I felt intimidated and frustrated. I depended solely on my realtor to give me advice and show me the way, but I wished I knew a little more about the buying process to give me the confidence in my own choices and decisions.
Buying a home is probably the largest investment you will ever make, financially and perhaps emotionally. Gaining knowledge about home buying is not only empowering, but it can also save you money. Visit real estate Web sites, read books about home buying, and attend seminars; get as much information as you can about the processes and costs of home buying before you get caught up in searching for a home. Becoming familiar with these procedures can make your home buying experience exciting and stress-free.
This book is intended to help home buyers become familiar with the many processes involved in buying a home, including obtaining a mortgage, searching for a home, drawing up a contract, closing, and possession. I hope this book will give you confidence in your own choices and decisions and make your buying experience a pleasant one!

What are Canadian home buyers paying for their homes?
Housing prices vary widely across Canada and change over time. They may even have a wide range within a single community, so don’t assume that a particular community might be out of your range. The following examples will give you some idea of the range of prices available in some of the nation’s larger communities.
In British Columbia, single-detached homes in a “blue chip” neighbourhood such as Vancouver’s West Side currently start at $400 000, while entry-level condominium units can be purchased for as little as $150 000 — although “leaky condominium syndrome” has put a damper on condominium sales along the British Columbia coast.
In West Edmonton, townhomes in Callingwood start at $115 000. In Calgary’s Mount Royal and Elbow Park neighbourhoods, prices for a single-detached home start at $300 000, while condominiums in the Beltline area can be purchased for as little as $110 000. Single-detached homes in the Greystone and Dundonald areas of Saskatoon start at $115 000, although new condominium lofts in the downtown core sell for less.
In Toronto’s Kingsway and Lawrence Park areas, prices start at $350 000 for a single-detached home; condominium apartments in the downtown core start at $100 000.
In Atlantic Canada, semi-detached homes in Moncton’s North End are available for $95 000, and single-detached homes in the same area start at $120 000. Single-detached homes in Halifax’s Hammonds Plains start at $140 000, and condominiums in the centre of the city can be purchased for $95 000.
1
Getting Financing

Getting financing to pay for the purchase of a new home is on the mind of every home buyer. Before searching for properties, you should see how much you can afford to spend. Going through a financial institution’s pre-approval process is a good way to determine your buying power. You will need to gather financial information about yourself, which will be detailed in an application. The financial institution will assess your income (employment income and earnings from assets, stocks, bonds, and so on) and assess your debts and expenses (car loans, credit card loans, student loans, rent, living expenses for yourself and your family). It will also assess your credit history and verify the amount of the down payment you can make. After making all these assessments, it will determine the amount of the loan for which you qualify.

What Is a Mortgage?
Obtaining a loan to finance the purchase of your new home will probably mean that you must fill out a document called a mortgage application. Your mortgage will set out the terms and conditions for the loan and its repayment. Mortgage payments consist of a principal sum (the amount borrowed) and interest (the cost to you of borrowing money). The best plan for any type of mortgage is to minimize the amount of interest you pay, and lenders offer several ways to help you do this. A larger down payment means that your home ultimately costs less because a smaller mortgage means less interest paid in the long term. Also, a mortgage with a shorter term means that although there are higher monthly payments, less interest will be paid.

What are the types of mortgage loans?

Conventional mortgage loan
A conventional mortgage loan allows you to borrow up to 75 percent of the purchase price or the appraised value of the property, whichever is less.

High-ratio mortgage loan
A high-ratio mortgage loan allows you to borrow more than 75 percent of the purchase price or the appraised value of the property, whichever is less. But you must pay a mortgage default insurance premium to protect the lender if payments are not made. This premium can be as much as 3.75 percent of the loan amount.

Insured mortgage
An insured mortgage allows you to put down as little as 5 percent of the property’s value and obtain a high-ratio mortgage equivalent to the remaining 95 percent. You must meet certain qualifications regarding your income and monthly debts.

Vendor take-back (VTB) mortgage
A vendor take-back (VTB) mortgage allows you a chance to purchase a property with the help of vendors who lend you a portion of the purchase price. Such a loan often comes with favourable or flexible terms, depending on the inclinations of the individual vendor. The loan may be open, which means that you can repay it any time without penalty. The vendor may charge an interest rate lower than the prevailing market rate, or the vendor may negotiate the term of the loan with you.
You can avoid a lot of red tape and administrative charges by obtaining a VTB mortgage. In a slow market, a VTB mortgage attracts potential buyers. On the other hand, if the market is hot, you won’t find many vendors who’ll offer to lend you money at favourable rates, unless their property is poorly located, in bad condition, or otherwise hard to sell. In general, vendors sometimes prefer the steady and consistent return of a mortgage secured by a familiar property to a riskier investment. They also prefer borrowers such as you, whom they know and trust, to faceless and nameless managers who manage many other types of investments.

Assumable mortgage

An assumable mortgage can benefit both the buyer and the seller.
An assumable mortgage allows buyers to assume the mortgage on the property they would like to purchase. Typically, a vendor will already have a mortgage on the home that you want to buy. Instead of going through the process of obtaining another mortgage, you can sometimes assume the existing mortgage from the vendor.
When you assume the vendor’s mortgage, you continue making the monthly payments at the same interest rate as the vendor has, for the remaining term of the mortgage. You will still need the lender’s approval, and you will have to pass a credit check, just as you would if you applied for a new mortgage.
When interest rates are high, you may assume a mortgage that the vendor had obtained several years earlier, when interest rates were lower. By assuming the mortgage, you may also be helping the vendor, because he or she can pass the mortgage along to you instead of repaying the lender. Most lenders charge a penalty if a borrower repays a mortgage before its term expires. Some of the money that the vendor saves by avoiding this penalty can be deducted from the price of the home.

Condominium mortgage
In a condominium mortgage, the buyer of a condominium unit receives legal title to the unit he or she is purchasing as well as an undivided interest in the common area. This means that you can sell your unit and your share of the common area without having to ask permission from everyone else who owns a unit in the building.

Blanket mortgage
The first mortgage registered against the entire condominium project is a blanket mortgage. That means that the mortgage is registered over the entire property. The blanket mortgage is placed on the project by the developer, who uses the funds from the mortgage to build it. As the developer sells individual units, the lender removes the mortgage from each individual unit. Meanwhile, the buyer can obtain a condominium mortgage to pay for the individual unit, if necessary.

Open mortgage
An open mortgage means that you can repay the loan, in part or in full, at any time without penalty. Interest rates are usually higher on this type of loan. An open mortgage can be a good choice if you plan to sell your home in the near future. Most lenders will allow you to convert to a closed mortgage at any time. Many experts suggest taking an open mortgage for a short term in times of high rates and converting to a closed mortgage when rates fall.

Closed mortgage
A closed mortgage usually offers the lowest interest rate available at any given time. It’s a good choice if you’d like to have a fixed rate to work your budget around for a few years. However, closed mortgages are not flexible, and there are often penalties or restrictive conditions attached to prepayments or additional lump sum payments. It may not be the best choice if you might move before the end of the term.

Portable mortgage
A portable mortgage means that the lender will arrange a mortg