Buying a home is a process not an event. Often it takes time and research to find out what the options are and what you like before you settle in on a particular type of home or location. We have a few short videos to help give an overview of how to look at your options, please check them out.
Be clear with not only what you can afford, but also what you want to spend. Banks will happily let you be in a good amount of debt.
Get pre-qualified, if you have a good relationship with your bank speak with them. I recommend talking to a mortgage broker. The advantage is that they know what banks are lending with different qualifications; such as if you are self employed, loan to value ratio, and more importantly they will offer better rates than the what the banks offer to the public. Check what the mortgage brokers rates are and take that rate to your own bank to see if they will match it.
One of the considerations in getting pre-qualified is the down payment amount you will require. You will need to have that accessible when you are ready to start seriously shopping. The down payment will come in two cheques; the first is the cheque you write when you write an offer on a house, anywhere in-between $5,000 and $20,000 (there are always exceptions).
That is the amount that is held in a trust account by the real estate company. The money to close is the rest you are using as a down payment. For example, you buy a house for $300,000, you write an offer and put down $10,000, you’re getting a mortgage for $270,000. You need to take the remaining $20,000 to your lawyer when you go to sign the mortgage and transfer documents.
There will be other expenses that you need to be prepared for. Legal fees will range from $750 to $1500 depending on additional fees such as land title, insurance, tax adjustments, photocopying (most firms charge you for that) couriers, and other costs. In addition, you will likely want a home inspection; count on a fee in the $400 range.Sometimes utility companies want a deposit, there may be an appraisal fee, but often the bank covers that.
Lastly, there are moving costs. That is dependent on who has a truck, pizza, or perhaps a moving company. It is important to keep in mind the need for an insurance policy on the home; a bank will not allow the funds until a mortgage policy is in place. There is no need for this if you’re buying a condo, except for a contents policy. If you’re buying an older home start sooner, they can be more difficult to get a policy for.