DOWN PAYMENT:
The minimum down payment in Canada depends on the purchase price of the home:
• If the purchase price is less than $500,000, the minimum down payment is 5%.
• If the purchase price is between $500,000 and $999,999, the minimum down payment is 5% of the first $500,000, and 10% of any amount over $500,000.
• If the purchase price is $1,000,000 or more, the minimum down payment is 20%.
Mortgage default insurance, commonly referred to as CMHC insurance, protects the lender in the event the borrower defaults on the mortgage. It is required on all mortgages with down payments of less than 20%, which are known as high-ratio mortgages. A conventional mortgage, on the other hand, is one where the down payment is 20% or higher.
Apply for a mortgage pre-approval first
The first thing you should do is apply for a mortgage pre-approval. After all, if you find a home you like, you’ll want to move quickly. Being pre-approved for a mortgage removes an extra step in the process. Being pre-approved also helps you know how much you can afford to spend.
Deposit
A deposit is the money you submit during the offer process when trying to secure a property you want to buy. This shows the seller that you are serious about the deal and it’s considered a show of good faith. Providing a deposit also demonstrates that you have the financial means to make the purchase and you are comfortable taking on some degree of risk until the deal closes.
However, you should know that in most cases a deposit is non-refundable once conditions to an offer, if any, have been fulfilled or waived.
FILL OUT SHOPPING CHECKLIST
Gives me a sense of what you are looking for!
SHOP FOR YOUR HOME AND MAKE AN OFFER
Start touring homes in your price range. It might be helpful to take notes on all the homes you visit. You will see a lot of houses! It can be hard to remember everything about them, so you might want to take pictures or video to help you remember each home.
Make sure to check out the little details of each house. For example:
• Test the plumbing by running the shower to see how strong the water pressure is and how long it takes to get hot water
• Try the electrical system by turning switches on and off
• Open and close the windows and doors to see if they work properly
It’s also important to evaluate the neighborhood and make a note of things such as:
• Are the other homes on the block well maintained?
• How much traffic does the street get?
• Is there enough street parking for your family and visitors?
• Is it conveniently located near places of interest to you: schools, shopping centers, restaurants, parks, and public transportation?
Take as much time as you need to find the right home. Then work with your real estate agent to negotiate a fair offer based on the value of comparable homes in the same neighborhood. Once you and the seller have reached agreement on a price, the house will go conditional which is the period of time it takes to complete all of the remaining steps in the home buying process.
GET A HOME INSPECTION
Typically, purchase offers are contingent on a home inspection of the property to check for signs of structural damage or things that may need fixing. I will help you arrange to have this inspection conducted within a few days of your offer being accepted by the seller. This contingency protects you by giving you a chance to renegotiate your offer or withdraw it without penalty if the inspection reveals significant material damage.
WORK WITH YOUR MORTGAGE BROKER
Every home buyer has their own priorities when choosing a mortgage. Some are interested in keeping their monthly payments as low as possible. Others are interested in making sure that their monthly payments never increase. And still others pick a loan based on the knowledge they will be moving again in just a few years.
REMOVAL OF CONDITIONS
Our conditions must at some point be “fulfilled / satisfied” or “waived / removed” for the Agreement to be binding upon the parties and the transaction to proceed to closing.
MEET WITH LAWYER AND SIGN DOCUMENTS
A real estate attorney is equipped to prepare and review documents relating to purchase agreements, mortgage documents, title documents, and transfer documents.
PROCEED TO REMINDERS BEFORE POSSESSION