Opening the Door to Fraser Valley Real Estate
FIRST TIME HOME BUYERS,
Buying a home for the first time is stressful and sometimes confusing. Your realtor and mortgage broker should make this a stress free process. You should feel educated, secure and well informed. Buying your first home is a big undertaking so make sure you've for the right by people by your side!
1. FIND THE RIGHT REALTOR & MORTGAGE BROKER
Ensure that you have a trusted and experienced realtor representing you. Your realtor must have knowledge about the current market. Review the Disclosure of Representations in Trading Services form with your realtor so you know exactly what services your realtor will provide for you. Ensure that your realtor has intimate knowledge of the location you are buying in.
Your mortgage broker should advise you with the best information regarding your specific needs and finances. They should keep you updated and well informed throughout the duration.
Interview 2-3 professionals in each field and determine who works best for you. Make sure they educate you throughout the process!
2. PREPARE YOUR FINANCES
- Purchase price
- + GST (newly built homes only)
- Property transfer tax
- Home inspection fee
- Property insurance
- Appraisal fee
- Mortgage broker's fee (if applicable)
- Title insurance (if applicable)
- Legal fees and disbursements (lawyer/notary fees)
- Deposit / Down Payment
- Mortgage loan insurance premium (can be included in your mortgage)
- Adjustment for prepaid property taxes and/or utility bills
- Other up-front costs: new appliances, moving expenses, renovations or repairs, fees to set up utilities and other services, condominium fees, etc.
3. GET PRE-APPROVED
The lender will look at your assets, income and level of debt.
- Find out if you qualify for any special loans (such as first time home buyer incentive or RRSP home buyers' plan).
- Compile any necessary documents including pay stubs, bank statements and tax returns.
- Study your credit report, make note of any errors and talk to your lender.
- Get a mortgage pre-approval letter, this can make you a more competitive buyer.
- Establish a price range for purchasing a property according to the loan amount.
Note: Pre-qualification, unlike pre-approval, only provides an estimate of what loan amount you may be eligible for but this amount is not final.
AFTER GETTING APPROVED DO NOT
-
- Have your credit pulled by another broker or lender
- Apply for a new credit card
- Close old credit card accounts
- Move money around without a papertrail
- Increase your debt
- Miss or be late on payments
- Buy a car
- Change jobs
- Spend your savings
4. PREVIEW HOMES & MAKE AN OFFER
- Complete a buyer’s questionnaire that your realtor will provide to find out exactly what you’re looking for.
- Look for properties with your realtor and get frequent updates from your realtor about active listings.
- Schedule open house appointments with your realtor.
- Submit an offer with your realtor.
- Negotiate terms such as price, move-in dates, repairs & included items, etc.
GET YOUR OFFER ACCEPTED
- Make a competitive offer
- Have a strong deposit
- Be flexible with your timeline
- Build a connection with the seller
- Limit contingencies
5. COMPLETE THE CLOSING PROCESS
REVIEW DOCUMENTS
Reviewing the property's title with a lawyer is recommended in order to have a thorough grasp on any easements, right of ways etc. that belong to the land. As for strata properties, it's essential to know any bylaws & rules applicable to the complex you're buying into, as well as it's financial standing & insurance coverage. The property disclosure statement is a document completed by the Seller that provides any disclosures relating to the state of the home to the best of the Seller's knowledge, although it is not to be relied upon.
ORDER AN INSPECTION
A home inspection can help identify deficiencies in a home you're considering to purchase. If the inspection reveals problems or repairs, you may be able to negotiate with the seller and alter your contract.
APPRAISAL BY LENDER
Once the Lender has approved you for a mortgage, the next step is to approve the home & that is done by an appraiser. This ensures that the purchase price is a reasonable amount for the property.
REVIEW HOME INSURANCE
When purchasing a home it is very important to make sure the home is insurable. Some factors that may impact insurance are the age of the home, materials used in construction, location, etc. All of these factors will determine if the home is insurance & how much your insurance policy could cost.
COMMITMENT LETTER FROM LENDER
Once the lender has reviewed & approved the appraisal report & received all final documentation from you, the lender can now issue a Commitment Letter - you are now officially approved.
FINAL REVIEW OF DOCUMENTS
Take one final opportunity to review all documents including the settlement statement & ask your realtor any questions you may have.
PREPARE BANK DRAFT
When the Offer to Purchase was originally negotiated you agreed to a deposit, payable once you remove all of your conditions (or upon other terms agreed to). Once you have fulfilled your due dilligence obligations you may obtain your bank draft from your financial institution.
REMOVE CONDITIONS
You have fulfilled your due diligence obligations according to the Offer to Purchase - you have obtained finance approval, obtained inspection reports, reviewed all documentation, & your bank draft is ready - time to remove those conditions & buy a house!
FINAL SIGNATURES
Sign transfer documents & statement of adjustments with conveyancer (bring valid ID, bank draft or void cheque and any other documents requested).
HOME BUYER'S GLOSSARY
AMORTIZATION PERIOD
The number of years it takes to repay the entire amount of the financing based on a set of fixed payments.
APPRASIAL
The process of determining the market value of a property.
CLOSED MortgageS
A mortgage that can not be prepaid or negotiated for a set period of time without penalties.
Closing date
The date on which the new owner takes possession of the property and the sale becomes final.
Collateral
An asset, such as term deposit, Canada Savings Bond, or automobile, that you offer as security for a loan.
Deposit
A sum of money deposited in trust by the purchaser on making an offer to purchase. When the offer is accepted by the vendor (Seller), the deposit is held in trust by the listing real estate broker, lawyer, or notary, until the closing date of sale, at which point it is given to the vendor.
Equity
The difference between the market value of the property and any outstanding mortgages registered against the property. This difference belongs to the owner of that property.
MORTGAGE
A mortgage is a loan that uses a piece of real estate as a security. Once the loan is paid-off, the lender provides a discharge for that mortgage.
Term
The period of time the financing agreement covers. The terms available are; 6 month, 1,2,3,4,5,6,7,10 year terms, and the interest rate will be fixed for whatever term one chooses.
