Making Your Dream Home A Reality
You’ve made the decision. You’re ready to buy. Now what?
Buying a home can be a bit overwhelming. There’s so much to think about and do. So, it’s important that you have someone you can trust to make the process as smooth as possible and offer expert advice.
Since 1913, Royal LePage has been helping Canadians find their dream homes and guiding them every step of the way – from determining what you can afford and showing you homes that match your wants and needs to presenting an offer and closing the sale.
It’s all about helping you find the right home in the right neighbourhood at the best possible price. Below, you’ll find it all outlined in eight simple steps.
3 Major Reasons Why Owning A Home Makes Sense
If you’ve recently decided to make the transition from renter to homeowner, you are about to make an important investment in your long-term financial well being. Still on the fence? Consider the following benefits. Owning your own home can allow you to:
1. Profit from Appreciation
Housing historically increases in value over time – which is as good as money in the bank for the homeowner. At the same time as you build equity by making mortgage payments, what you can get when you sell your home will likely increase over the long term.
Ultimately, buying a home isn’t only about money. Home ownership makes it easier to put down roots in your community, and can give you a new sense of pride in your surroundings. You have full freedom to renovate your space to fit neatly with your family’s lifestyle.
2. Build Equity
When you purchase your own home and make mortgage payments, you accumulate equity in the property. Think of your home as a “three bedroom savings account.” You may borrow against this equity or convert it into cash when you eventually sell your property. Over the long term, building equity in your own assets is far more astute than paying rent and financing someone else’s property.
3. Stabilize Housing Costs
While rent typically increases from year to year, with fixed-rate and some variable-rate mortgages your payments remain unchanged throughout the term of the financing. The impact of inflation over the years means you pay the same amount, but in devalued dollars.
FAQ – Common Buyer Questions
Why would I bother to use a Realtor when I have access to realtor.ca?
Because, if you don’t, you will be seriously disappointed. In this fast-paced real estate market, Buyers who choose to use only realtor.ca or local newspaper ads are missing out on properties every single day! You need a dedicated and committed Realtor to work for you so that you are aware, every minute of the day, of new properties on the market. The TAN Team will ensure that you are notified within hours of a property being listed. By using The TAN Team, you will be among the first to view a property of interest – we guarantee it!
How is it that some people seem to know about a property before I even see it on mls.ca?
First a property is listed with the Real Estate Board (the system that Sales Representatives use to find properties for their clients). Then, the Sales Representatives will likely erect a sign. It can be as long as a week before that property shows up on realtor.ca. By then, it could be sold. To make matters worse, the sale of the property may not be reported to realtor.ca for as much as another week to a month. If you are depending on realtor.ca, lawn signs or newspaper ads to find a new home, you are most definitely going to be disappointed time and again.
What property information should I be looking for?
Let The TAN Team guide you through information such as comparable property values, taxes, utility costs, zoning, restrictions, public transportation, location of schools, shopping centers, recreation facilities and all amenities that you may need. We make it our business to know these communities!
Why should I have an agent representing my interests?
The TAN Team will help guide you to determine fair market value. We will show you comparable properties and provide you with the research that will help you make informed decisions. We will make sure you are aware of features and outside factors that may affect future marketability of your potential new home. It is important to The TAN Team that you are happy with your decision – that your wants and needs are satisfied but, we also keep you informed about the potential for this long term investment… in short, we make sure you buy right!
What about all of the paperwork and legal-eze. Do I really need a Realtor to help me with this?
The only alternative to using a Realtor for preparing and reviewing offers is to employ legal counsel. Realtors have been highly trained in this aspect of the process and will ensure that your offers are prepared in a way that protects you. When you consider that you are not paying for this service, the Seller is – why pay a lawyer? The TAN Team will take you through the entire process – we will prepare offers, negotiate, assist you with budgeting, help you find the best possible mortgage and steer you in the right direction for your home insurance and movers. We are a full service Team and we will not only do it all for you, we will do it the best!
How can I make sure I don’t miss the perfect property for me?
You need a responsive and aggressive sales representative working for you! Someone who is constantly watching the market and advising you of any properties that meet your criteria. The TAN Team will not let you miss any properties that meet your criteria – guaranteed!
Will I get a better price on a property if I go directly to the Listing Sales Representative?
Not necessarily. The Listing Sales Representative’s primary responsibility is to get the very best price possible for the Seller – not the Buyer.
How can I find out what properties are selling for in a particular area?
When you engage a Member of The TAN Team to represent you as a Buyer, you ensure that you are receiving all of the comparable information you need to establish the right price for any property that interests you. You cannot obtain this information accurately and efficiently if you don’t use a Realtor.
5 Home Buying Tips
Bi-Weekly and Weekly Payments
Most mortgages have the option to allow payments to be made on a weekly or bi-weekly basis. This option may be desirable for two reasons. The first is it can save you money as you can expect to pay off your mortgage about 4 years sooner. This can save you dramatically over the life of your mortgage. The other reason why these options are so popular is that if your employer pays you on a weekly or bi-weekly basis, you can simplify your budgeting by making the payment line up with the way you paid.
Making Extra Payments
Paying extra amounts on your mortgage can make a big interest saving over time. When we select a mortgage company, privilege payments options are something that we look for. A 20% privilege payment will allow you to pay off up to $20,000 per year on a $100 000 mortgage. It is important that the privilege payment also be flexible to allow you to pay smaller payments on the mortgage and as often as you wish. An extra $1000 periodically paid on a mortgage can help you become mortgage free faster.
Reducing The CMHC Fees On Your Purchase
When you require a mortgage for more than 80% of the purchase price of a property, that mortgage must be insured by Canada Mortgage and Housing (CMHC) or GE Mortgage insurance. The premium charged by these company`s decreases as the down payment increases. When you finance your property at 95%, a premium of 3.75% is added to the mortgage. By increasing the down payment to 10% of the purchase price the premium can be reduced to 2.5%. If you can put down 20%, you can avoid any additional insurance fee. Depending on your situation there are ways that you can structure this financing to avoid the CMHC or GE insurance premium.
Advantages of Bigger Down Payments
As mentioned above, when you put a 20% down payment on your purchase you can avoid the CMHC premium. More importantly the larger the down payment, the lower the amount of interest you will pay over the life of your mortgage. It is important to note that it may not be wise to stretch yourself to increase your down payment and end up borrowing on credit cards or a line of credit at a higher rate.
Short Term Rates vs. Long Term Rates
Options for mortgages available can be very confusing for most mortgage shoppers. Terms for mortgages vary between variable and fixed rate, 6-month terms to 10 year terms. Taking a variable or floating rate mortgage can have savings. Typically the shorter the term or guarantee of the rate, the lower the rate will be. This does not always happen, depending on the market place and the economy, but history has shown that short-term rates tend to be lower than long-term rates. The up side of variable rate is the strong potential for interest rate savings. The down side is the fact that you are accepting the interest rate risk without a guarantee. If you are considering a variable rate mortgage you need to look at your own risk tolerance, and your cash flow available to deal with potential increased payment. Considering projections of rates and where we see interest rates heading can also be important in this decision. Make sure you talk to an expert when you are making this decision.