Determining Your Needs
Determining Your Needs Your Lifestyle So, you've decided you want to own a home. It's a popular dream. For most people, with the right planning, it can become reality. But there is a lot to know before you begin moving. I will take you through the planning process step-by-step, to determine exactly the kind of home that's perfect for you. I will ask you some questions and we've provided worksheets that you can print out and use with your Royal Lepage agent. What Does Your Future Lifestyle Hold? How many bedrooms will you one day require? Your preschoolers will be teens some day. Are you planning to stay in your home that long? Perhaps your teens are ready to move out on their own. What will you do with all the extra space? When you're thinking about accommodating your family's needs, think of things like parking. How many cars will require space? You'll also want to consider proximity to -- and the reputation of -- schools in the area. How is your work situation? These days people tend to change jobs frequently, and sometimes the best way to get a promotion is to move to another company. If you might be transferred, will you be able to sell quickly? Keeping work in mind, how long do you want to spend commuting? Do you drive or rely on public transportation? As you can see, you will want to give some thought to how long you intend to stay in your home. It may be difficult to answer before you've even found your home, but if it's your first home give some thought to the resale value when it is time to upgrade. On the other hand, if you're planning to stay in your home for a long time, consider your future needs and purchase a home that will accommodate them. Do You Live a Maintenance-Averse Lifestyle? When you're looking at homes, consider the advantages of brick over a wood frame house when it comes to painting. Take a look at the garden. If you don't enjoy cutting grass, then an expansive lawn may not fit into your lifestyle. You can also evaluate the possibility of future maintenance and repairs based on the age of the house. If you don't like the idea of major renovations, a newer home may be your best option. Is Your Lifestyle More Geared to a Fixer-Upper Fantasy? Many first time buyers have them. It goes something like this: You find a big home in a great neighbourhood that's well below what you'd expect to pay for that house in that neighbourhood. You see a couple of coats of paint, new broadloom, a few repairs and voilà, a dream home without the nightmare price. Before you jump headlong into this 'once-in-a-lifetime opportunity' consider how you'll do all of the work. Will it be weeknights after a long day at the office, or will you hire someone? Are you ready to live in a dusty mess as you renovate? Do a realistic assessment of the job at hand and be sure to have the house inspected. The last thing you want is a bargain home that turns into a money pit. You're far better to find a house that costs a little more each month but doesn't need much work than to buy a fixer-upper that eats up hundreds of dollars each month. For example, lets say you could buy a really nice house with minimal work required for $10,000 more than a fixer upper. At today's mortgage rates, assuming you could stay within your monthly budget, that really nice home would cost you only about $65 per month more than the fixer-upper. If you buy the fixer-upper, you'll be spending a lot more than $65 each month to whip it into shape, as well as the strain your family will go through living in an unfinished home.
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Arranging A Mortgage And Types Of Mortgages
Conventional and High Ratio Mortgages To qualify for a conventional mortgage, you simply have to have a 25% down payment of the purchase price, with the mortgage not exceeding 75% of the appraised value. If your down payment is less than 25%, then you qualify for a high-ratio mortgage. This type of mortgage requires loan insurance, which can cost an additional 0.5% to 3.75% of the mortgage amount. With this type of mortgage you could also be limited to a maximum house price. Second Mortgage Of course, if you cannot add on to your mortgage, you may consider a second mortgage. Each mortgage uses your home as security and gives the mortgagee the right to take your home if you default on your loan. The first mortgagee gets paid first in cases of default and has the best chance of recovering all of its money. So it only goes to figure that subsequent mortgages usually come with a higher interest rate. Mortgage Features Here are some mortgage options you should know about: Every lending institution is different, and each will have their own customizable mortgage options. When you're hunting for a lender and a home, see how the following features could be beneficial to you. Prepayment This is a wonderful option if you receive regular bonuses or if your income fluctuates throughout the year. With a pre-payment privilege, you have the right to make payments toward the principal portion of your mortgage over and above the monthly payments. A mortgage with a pre-payment option is closed. An open mortgage means you can pay the entire principal sum without notice of bonus. Portability If you still have time remaining on that fantastic loan you negotiated, portability is one option you'll want to discuss with your lender. Quite simply, it means transferring the balance of your current mortgage at the existing rates and with the existing terms and conditions, to your new home. Assumability Let's say that the vendor has negotiated a dynamite mortgage. With an assumable mortgage you, the purchaser, simply assume the obligations of the mortgage. This is a wonderful feature especially if the terms are more favourable than the existing market conditions would allow. Remember, when it is time for you to sell, you may still be liable for any mortgage you allow the buyer to assume. This means if the buyer stops making payments, you could be accountable for the payments. Be sure to have the subsequent buyer approved for the assumption of the payments, thereby avoiding this potential land mine. Expandability If you need additional funds down the road, will your mortgage terms allow you to increase the principal amount? Usually, your new rate will be a blended amount of the initial mortgage rate and the prevailing rates. It's a great option to discuss with your lender if you foresee large expenses in your future like renovation or education costs.
 What To Know About An Offer
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When An Offer Is Made
1. Presenting The Offer: Presuming that the offer to purchase your home is generated by an agent other than ourselves, I will contact you immediately to arrange a meeting. The timing may be inopportune but it’s usually best to meet as soon as possible to consider the contract. Please note that when I call you to arrange for the presentation, I will not be aware of the terms of the offer. However, it will be me who presents the offer to you and will review all of the terms and conditions at that time.
2. Your Three Options Will Be: A. accept the offer exactly as presented.. and your home is SOLD! B. Make a counter proposal---propose changes to the offer, i.e. price, personal property, closing or possession dates, etc. so that it is acceptable to you. C. Reject the offer.
3. Delivery Of The Contract: A copy of the finalized contract will be delivered to both buyer and seller by their respective real estate agents. All pertinent legal documents can be delivered to your attorney, if you desire.
4. Finalizing All Conditions: If the contract states that financing will be provided by a lender, it is the buyer’s responsibility to make an application for the mortgage loan as soon as possible. The buyer will have a set number of days to procure the loan, as stated in the contract. The lending institution will verify the buyer’s credit and work records, determine his ability to meet the monthly obligations, and appraise your home for purposes of loan value. When all the information is received, the mortgage loan underwriter will either approve or disapprove the loan.
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After the loan is approved, the formal closing process will be handled by your attorney. He is responsible for bringing the title up to date, ordering a new survey, preparing a closing statement, and coordinating the time and place of closing with all parties involved. We will assist your attorney to insure a smooth and timely closing.
At closing, all documents finalizing the sale will be signed by all parties and all funds will be disbursed.
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CLOSING DAY-WHAT YOU NEED TO KNOW
Closing You And Your Lawyer
Closing Overview It's a day filled with nervous anticipation. This is the day on which all of the legal and financial promises in the offer are met. It's the day when you get the keys and begin a new phase in your life. Your Royal Lepage agent and your lawyer will give you all of the details on steps and timings. All of the small details will be taken care of ahead of time, so in most cases it will be just a day of waiting by the phone. Also, remember that this is a hectic day for the seller, too! Very often it's moving day and they're trying to gather all of their belongings to leave as the purchaser is trying to move in. In brief, here's what takes place before the actual closing day: 1. A copy of the offer will have been forwarded to the office of your lawyer. Your lawyer will have reviewed the conditions of the sale. You will have made your lawyer aware of how you, and any co-buyers, will be registered on the title of the property. 2. All of the conditions in the offer to purchase must be satisfied by the closing date. If one of the conditions in your offer was a house inspection, it should have been completed by the closing date, and you should be satisfied with the report. 3. All of your financing details will have been finalized and ready to fall into place on the closing date. 4. If the vendor did not have an up-to-date land survey, you'll have had one done. Your lender will insist on it. 5. Your lawyer will search the title of the property to ensure that you can purchase the home without any legal problems. Your lawyer will also make sure that tax payments have all been made and there are no liens on the home or the personal property the vendor has agreed to sell you as part of the deal. 6. You'll want to make sure that you've contacted all of the utility, cable, and phone companies to ensure an easy transition of service and billing. 7. Your lawyer will prepare a statement of adjustment. This confirms the selling price, adjustments, and the balance (less the deposit you provided with the offer). Your lending institution will draw up a certified cheque for your lawyer to hold in trust. 8. Additional settlement charges will have to be paid: Your lawyer's fee and disbursements Condo and co-op fees (Remember to ensure there is an adequate Reserve fund in place and that the condominium has a proper Technical Audit and Reserve Fund Study completed by competent professionals.) Tax and utility adjustments; if they have been pre-paid, you'll have to pay the vendor for the portion of the service you assume Land transfer tax; based on the price of the home, this fee ranges from 0.5% to 4% of the selling price 9. You'll want to make sure your homeowner's insurance policy will be in place to cover your new home and property once the deal is closed. Your lawyer will need a copy of the policy before closing.
MOVING DAY - BE PREPARED
What To Expect On Moving Day
The move What to Expect on Moving Day Saying good-bye to one neighbourhood and discovering a new one is an exciting adventure. But let's face it, at the end of your home-buying process you may find yourself exhausted. After all, the other obligations in your life have not paused. What's more, now there's another cost -- moving. Whether you hire professionals or strong-arm friends into helping, be prepared for the cost of the move. Here are some suggestions on how to reduce the cost of your move, but let's first look at how to prepare for the big day. You will have noticed that your possessions expand to fill the space allotted. Guess what, if you're moving into a larger home, you'll be gathering more stuff, so start out right. Don't take it all. Before you pack it all into boxes and cart it to a new location, take a good look at everything and find out what you can live without. This is a great time to have a garage sale and what doesn't sell, you can give away to charity. Have all of your change of address cards filled out months in advance. You'll want to notify friends, family, businesses, organizations you're a member of, etc. Have the cards ready to mail once the deal is closed. Redecorate before the move. Sometimes it isn't possible, but if you have the chance to work without the obstructions of furniture, you'll find that you can get twice the work done in half the time. Put the utilities in your name. Hydro, water, gas are the first companies to call. But don't forget to coordinate your telephone and cable service. Of course, you'll want to let the companies servicing your old home know when to disconnect service there. Get Packing You'll want to ensure that each item you own is well packed to minimize damage during travel. Whether you're moving around the corner, across town or across the country, the moving process is always the same. To Hire Movers or Not to Hire Movers? If you hire movers to pack for you, they'll descend on your home with a crew of experienced packers who will seal, pad and itemize everything you own in a day or two. During the move, you'll want to make sure you're insured while your belongings are in transition. Many moving companies also offer additional insurance. On moving day, go through the house with the crew supervisor and have him take note of any special instructions. If there are items you will need first in your new home (like a crib) make sure they put it in the moving van last. The movers will also make note of the condition of your goods on a master list. It is your responsibility to make sure it's accurate. After the van is unloaded and your goods are unpacked, inspect everything and make note of any damage. While movers do unpack, they don't put dishes or linens away. If you are undertaking the packing process by yourself, it will take time. Pack well in advance, and take note of what you can really live without. You'll have items that need special attention and other items that need to be disassembled. Label each box in detail and, if you know where it will go in your new home, put the destination on the box. Pack what you need most last! Label each box carefully! Designate a destination! You'll also want to pack a box of essentials. These are items you're likely to use once you arrive in your new home. Include items like: toilet paper soap toothbrushes and toothpaste paper towels garbage bags (a lot of them!) paper plates, cups and plastic utensils can opener hammer, screwdrivers, pliers a flashlight some light bulbs snacks and drinks a radio BACK TO TOP |