Buyers Guide

The Importance Of A Pre-approved Mortgage

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. In the Toronto market it is very hard to purchase with a financing condition in your offer.

Your Mortgage Specialist will answer your questions and help you determine which financing terms and options are right for you. Many people use their bank for their mortgage pre-approval and subsequent mortgage since they have an existing relationship with their financial institution. A mortgage broker shops your mortgage qualifications out to other banks/credit unions to find you the best rate, which can sometimes be better than the rate you receive from your bank. Generally it’s best to look into both options before making a decision.

What Are Your Closting Costs?

Here are some common closing costs we recommend preparing for in advance.
Legal Fees & Disbursements

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. In the Toronto market it is very hard to purchase with a financing condition in your offer.

Your Mortgage Specialist will answer your questions and help you determine which financing terms and options are right for you. Many people use their bank for their mortgage pre-approval and subsequent mortgage since they have an existing relationship with their financial institution. A mortgage broker shops your mortgage qualifications out to other banks/credit unions to find you the best rate, which can sometimes be better than the rate you receive from your bank. Generally it’s best to look into both options before making a decision.

Title Insurance

The cost of title insurance is based on a sliding scale depending on the value of your purchase and the location of your property. Accordingly, insurance can cost several thousand dollars or as little as $450. A note of caution: title insurance does not correct title problems. It merely compensates the Buyer as a result of negative impact resulting from a title defect.

Land Transfer Tax

For the current land transfer tax on your potential purchase please consult our Land Transfer Tax Calculator. Land Transfer tax is paid on closing through your lawyer and is dependent on the purchase price. First time Buyers may be eligible for rebates under both the provincial or municipal schemes. Legal advice should be sought as to eligibility as there are certain qualifications and timelines applicable.

Property Tax, Utility and Condo Maintenance Fee Adjustments

Before closing, Buyers must reimburse the Sellers for any prepaid property taxes, utilities and condo fees as of the closing date. This is done by your lawyer on closing and will appear on the Statement of ADjustments.

CHMC Insurance Premium

For the current CMHC insurance premiums on your potential purchase please consult our CMHC Insurance Calculator. If you put less than 20% down, you will have to pay an insurance premium. For more information on premiums, visit the CMHC website.

Home Inspections Are A Must

Buying a home is one of the most important investment decisions you will make in your lifetime. As such, it makes sound financial sense to enlist the services of a qualified home inspection company to ensure your home is as solid and secure on the inside as it is on the outside.

A home inspection will determine the structural and mechanical soundness of your home. Your home inspector will identify existing and potential problem areas, suggest practical low-cost solutions, and provide estimates regarding costs for any work required. Shortly after the inspection has taken place, a report summarizing the findings is generally provided to the potential purchaser.

By commissioning a home inspection prior to purchase, you’re protecting both yourself and your investment, as well as buying a little peace-of-mind. Home inspection costs often range according to size, age, and location of the home. Most agents will have a list of respected Home Inspectors.

Choosing A Home

Once you have decided on your ideal area you need to get advice on what are the best streets, are there underground rivers in the area and if so where, is the property low lying etc. All neighbourhoods have A, B, and C streets. Lot sizes, development, water problems, school districts and location are some of the factors that contribute to the quality of a street. In the excitement of the moment common sense can fall by the wayside, never forget about the big picture.

If you are buying land to build a home we recommend buying on the best streets – always remember bricks and mortar cost the same in bad locations as they do in good locations. This will ensure your return on investment.

Making An Offer & Negotiations

When it comes time to make an offer, we will provide current market information and will assist you in drafting your offer. As real estate professionals we have several clauses we include in offers to purchase that provide our buyers with added protection. Key components of the offer are: price, deposit, terms, conditions, inclusions, exclusions, and closing date.

Once you have reviewed and signed the offer we will present the Offer to Purchase on your behalf. The Seller may accept the offer, reject it, or submit 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 of you ends the negotiations. It is imperative to hire a strong agent that is able to negotiate on your behalf as this is one of the most important parts of purchasing a home.

Deposit

In the Toronto real estate market, a 5% deposit is now considered the norm on a successful purchase. That deposit is either provided to the listing brokerage immediately upon offer acceptance or within 24 hours of acceptance by bank draft or wire transfer. If you are in competition on a property, a deposit greater than 5% can carry significant weight with the Sellers. All else being equal Sellers are likely to accept the offer with a larger deposit as it provides the sellers with additional security that the deal will close. Keep in mind when you are offering on a property with a long closing Sellers will usually expect a minimum 10% deposit.

Multiple Offers

If there is more than one offer on a property it is important you know the value you are willing to go to. We will provide you with listings so you know what comparable homes have sold for but this is only part of the equation. If you love the home and are going to be upset if you don’t get it you may have to pay too much. Ask yourself how long are you going to live in this house? If your answer is 10 - 20 years the extra money won’t matter long term if you love the home, area and schools. It is important that your agent has a good relationship with the listing agents. Deposit is also important, the larger the better, a bank draft talks. Get pre-approved for your financing. Sellers are reluctant to take offers conditional on financing. Home Inspections should be done ahead of time otherwise the norm is only three business days for a home inspection condition.

Home Owner's Insurance

Most mortgage lenders insist on fire insurance coverage at least equal to the loan amount or the building value, whichever is less. You should also consider a homeowner’s policy that combines fire insurance on the building and its contents with personal liability coverage. Consult your general insurance agent or broker for professional advice on home insurance.

Mortgage life insurance

Mortgage life insurance (MLI) is inexpensive coverage on your life which protects your family or beneficiaries by paying off your outstanding mortgage in the event of your death. MLI premiums are based on two factors: your age and mortgage amount. Your premium is added to your mortgage payment so there’s no extra paperwork, and it remains the same until your mortgage is paid off. Joint coverage for spouses is also available. This coverage is particularly important if you have a young family.

Disability insurance

Disability Insurance is important if your mortgage payments depend entirely or in part on your income. Disability insurance provides replacement income if an accident or illness prevents you from working.

Job loss mortgage insurance

This insurance covers the mortgage payments in the event that you involuntarily lose your job. In recent years this insurance has become very popular.

Connect with us today!
Award Winning Service

Let's Work Together!

No matter your needs we are happy to help. Book your confidential and no-obligation consultation today, where we can discuss everything from budgets and mortgages to your ideal home and favourite neighbourhoods.