Buyers
Home purchasing can be a scary and difficult practice. But with eXp Realty at you side, it will e an easy and calm process. Remember, we will work for you and always look for your best interest.
Before dreaming for a home, you must know how big you can dream and knowing your budget is the first and most important step while purchasing a home.
Purchasing a home is a big matter
It's most likely the most luxurious thing you'll ever purchase and there are countless expenses you might not even know about. Some of them contain:
(i) Cost of buying a home:
(ii) Onetime costs:
• Down payment
• Legal fees
• Title insurance
• Inspection fees
• Property transfer
• Taxes
(iii) Monthly costs:
• Mortgage
• Utilities
• Maintenance
• Insurance
• Property taxes
Everyone's total costs vary, but it's almost certain that you won't have that much money saved up. Expecting you might have sufficient for a good down payment, but for the rest...
Yes, you require a credit. So establish how much a bank will lend you
In the next step you'll find useful instructions to arrange for your mortgage. But the first step to establish how much a bank will lend you is directly proportioned to the amount which can afford each month. This is resolved using two loan principals.
• Gross Debt Service Ratio (GDSR) calculation:
This loan principle simply says that your monthly accommodation cost should not go above 32% of your gross monthly family earnings.
• Total Debt Service Ratio (TDSR) calculation:
This lending principle says that your monthly accommodation cost and payments on all of your other debts (including loans, credit card and lease payments) should not exceed 40% of your gross monthly earnings.
We can help you easily estimate your maximum reasonable mortgage payment of principal and interest with the help of our "What You Can Afford calculator". You have to just enter your monthly income and expense amounts, and the calculator will do the rest.
Once you have estimated your maximum monthly total, you can compare this number to the mortgage payments for specific loan amounts. Simply enter the loan amount in our mortgage calculator and the monthly principal and interest will be figured out for you.
Money makes the world go round and a mortgage gives you the power to buy a home. This isn't the most amusing step in buying a home, but it's very important.
With whom do you talk?
There are lots of banks, credit unions and other lenders who can pay your monthly mortgage payments. So talk to everybody and don't be introverted. Talk to your banker, other banks and people you know. eXp Realty is well informed about credits and have lots of good recommendations.
Call a credit agent
Credit agents are another great source. They find low rates for a living, and they usually don't get paid unless you sign a credit through them, so they're highly motivated to get you the best deal.
Your best credit might be the seller's credit
Often, you can take over or 'imagine' the seller's mortgage. This is a great idea if the seller is locked into a lower interest rate than you can get right now. eXp Realty has additional information for you.
Mortgage terminology
• Credit term:
Refers to how long the bank has agreed to provide you the money – normally from six months to five years. At the end of the term, you usually renegotiate a new term.
• Paying back:
The length of time it will take to pay off the whole credit, often as long as 25 years. The longer your paying back, the lower your monthly expenses, but the more you pay in interest over time.
• Interest rates:
Interest is the cost of borrowing money, and the interest rate tells you exactly what the cost is. Using this mortgage calculator, check the difference between borrowing $100 000 at 6% and at 9% at the same paying back. Surprising, no?
That interest rate not only affects how much you pay, it also affects how much you can borrow. So keep searching for the best rate!
How big a down payment?
If you want small mortgage, you have to pay big down payment. Just remember to set money aside for all the fees linked with purchasing a home. This Includes moving, repairing, reconstructions, new furniture and lot more.
The Home Buyers' Plan – A little sweet relief
If you're a first-time homebuyer with money in an RRSP, you can withdraw up to $25,000 without paying any income tax. If your spouse is also eligible, that's $50,000. Ask eXp Realty how to best take advantage of this plan.
Lock into an interest rate? For how much time?
It's a dangerous question. What if you 'lock in' for five years and the rate goes into a period of decline? That could mean you're stuck paying more than you had to for a long time. But if rates steadily climb, over the next five years, locking in for five years now would be a great move.eXp Realty has a lot of good advice.
What are the requirements to apply for a credit?
• Letter of employment confirmation
(Including your position, your pay and how many years you've been with the company)
• List your assets
(Your car, stocks, bonds, GICs, etc)
• List your liabilities
(Car payments, student loans, credit card debt, etc)
• Social Insurance Number
• Your chequing account number
• Your lawyer's contact information
• Information about the house you want to buy
Don't forget these additional costs
• Application fee:
Some credit lenders charge a fee to process your request. But ask to see if you can get it surrendered.
• Evaluation fee:
Your credit lender may need to have your new home evaluated by a specialized, and they often pass the bill on to you. Sometimes your lender will also waive this fee.
• Credit broker's fee:
Your credit broker may charge a fee that's payable on your closing date. Ask your broker to avoid surprises.
• Land survey fee:
Lenders may require an investigation of your property, even if it's an existing survey. Get your lawyer on the case.
• Home inspection fee:
A home assessment is so vital, we dedicated an entire step to it. Evade surprises and shield yourself... this is money well spent.
• Home Insurance:
Credit lenders require you to carry fire and extended-coverage insurance because your home is the security deposit on the credit. Often you can have these payments added to your monthly credit payments.
• Title insurance:
It's not compulsory, but protects you from all sorts of scam and possible mistakes surrounding the title to your land. Ask your lawyer for details.
• Legal fees:
You'll pay your lawyer for their precious time and "expenditures" which are the costs involved in title searches, drawing up the title deed, and preparing your credit.
• Adjustments:
The earlier proprietor may have paid property tax or utilities earlier, and they want to be credited for those payments. Ask Royal Lepage Flower City Realty Inc and lawyer what might come up on the closing date?
• Preservation and Convenience costs:
Remember, you'll now have more regular monthly payments in the form of property tax and utilities.
• Property Transfer Tax:
The amount of this tax varies from province to province.
• The GST/HST and new homes:
Resale homes don't involve GST/HST, but new homes do. If you intend to live in your new home (instead of renting it out) there is some relief. Consult eXp Realty and/or lawyer for more information.
• eXp Realty Commissions or fees?
eXp Realty commissions or fees are subject to GST/HST.
