BUYING A HOME
Click
on one of the articles below to view the tips and articles
My
Personal Pledge to Buyers
Buying
Your First Home
Buying Your Home: What Can You Afford?
Closing a Real Estate Deal – What to Expect
A Snapshot
of Vancouver Neighbourhoods & Communities (Soon to be uploaded -
please visit me soon!)
MY
PERSONAL PLEDGE TO THE BUYER
- Careful
attention to your buying needs and specifications
- Previewing
potential properties to save you time
- Researching
market & local conditions that affect the value of your potential
purchase
- Honest
and thorough assessment of subject property to safeguard your best
interests
- Skilful
negotiation & convincing presentation of your offer
- Personable
and yet professional services to guide you from offer to acceptance
to completion
BUYING
YOUR FIRST HOME
With today’s low interest rates, many people are finding
the prospect of buying their first home attractively affordable. If
you are considering homeownership in the near future, you’ll want to
have a Realtor on your side to guide you.
Buying a home, especially for the first time, can be a daunting
experience. Yes, it is likely one of the most exciting events in your
life, but it can also be the most confusing. A Realtor is a highly-trained
and experienced individual who will skillfully direct you through the
home-buying process. A Realtor is a licensed real estate professional
who is a member of a local real estate board, as well as the Canadian
Real Estate Association and the British Columbia Real Estate Association.
When you work with a Realtor, you can expect the highest level of service,
honesty and integrity.
Your first home buying experience will be full of questions
such as, Where should we buy? How much home can we afford? Should we
buy new or resale? Your Realtor will begin by helping you determine
your needs and wants. He or she will also help you figure out what price
range you should be looking at for your first home.
One of the most valuable services a Realtor has to offer
you is knowledge. Your Realtor can answer questions about the neighborhood
or market you are interested in and help you to compare homes from different
neighborhoods.
Your Realtor has direct access to the Multiple Listing Service
(MLS) which provides details on a wide variety of properties in the
markets you are exploring. He or she will constantly review the MLS
and stay on top of new listings as they occur.
Your Realtor will save you time and legwork by previewing
properties to ensure you are only looking at homes that fit your budget
and match your needs and wants. He or she can also give you information
on the various financing alternatives available and provide you with
current interest rates and mortgage options.
Once you’ve found the home of your dreams, your Realtor
will work on your behalf to negotiate the best purchase price possible
and act as a mediator between you and the seller to head off any conflicts.
Finally, your Realtor will ensure that your best interests are taken
care of in the purchase and sale agreement and assist with all the details
needed to complete the transaction.
If you’re thinking of buying your first home, go for it!
Becoming a homeowner is very satisfying. And, with the help of a Realtor,
buying your first home will be a smooth, hassle-free and rewarding experience.
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BUYING
A HOME: WHAT CAN YOU AFFORD?
If you're thinking about buying a home, a question
that will undoubtedly weigh heavily on your mind is: "How much can I
afford?"
Obviously, affordability will play a major part in your
decision making process. You want to be able to buy something you like,
but you don't want to feel stretched to the limit when it comes to meeting
your financial obligations. Once you discover exactly what you can afford,
you can be more realistic in your expectations.
If you're like most people, you lack the funds to make a
purchase without seeking substantial help from a lending institution.
In addition to coming up with a down payment, you'll have to arrange
a mortgage.
Basically, there are two types of costs involved in buying
a home:
The amount of money you'll need for the initial purchase
-- consisting of the down payment plus additional costs such as legal
fees, inspection fees and taxes; and
The ongoing costs of paying back your mortgage, along with monthly operating
costs for utilities, maintenance, insurance and annual property taxes.
Lenders use several factors in judging your ability to handle a mortgage,
including your income, employment record and credit worthiness. However,
one way you can estimate the price range you can afford is to look at
the amount of money you have available for a down payment.
The most common type of mortgage is a "conventional mortgage."
Under this type of mortgage, lenders will loan up to 75 percent of the
appraised value of the property or purchase price, whichever is lower.
The remaining 25 percent or more is the amount you will
contribute as a down payment. So, if you plan to buy a home that has
an appraised value of $100,000, a lender may loan you 75 per cent or
$75,000 on a conventional mortgage when you contribute a down payment
of $25,000.
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Multiply By Four
If you plan to borrow funds through
a conventional mortgage, simply multiply your down payment funds by
four, to get an idea of the highest priced home you could buy. Then
you will have to determine whether you have sufficient income to make
the payments on your mortgage. Most lenders won't let you take on debt
that you can't service. That's why they'll "qualify" you first, before
agreeing to give you a mortgage.
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High-ratio Mortgage
If you don't have a 25 per cent down payment, you
may want to investigate a high-ratio mortgage.
This type of mortgage is available for up to 95 per cent
of a home's appraised value or purchase price, whichever is lower, up
to a maximum amount set by the government.
Since you are borrowing more than 75 per cent, the government
insists that the mortgage be insured against default and that you pay
the cost of the insurance. That cost can range from one to three per
cent of the mortgage amount, and is added to the mortgage principal.
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Lenders' Considerations
To determine your eligibility, lenders will look at
your monthly housing expenses. These include such items as mortgage
payments, property taxes, and utility costs. These shouldn't exceed
approximately 30 percent of your monthly gross family income. This is
called your "Gross Debt Service" ratio or GDS. (Some lenders will, in
fact, go as high as 35 per cent, depending on a number of variables.)
Lenders also use a second calculation in qualifying you
for a mortgage. It's called the "Total Debt Service" ratio or TDS. Generally
speaking, no more than 40 percent of your gross family income may be
used to cover mortgage payments, property taxes, utility costs, plus
other fixed monthly payments. These other fixed costs are your ongoing
commitments and can include auto, student or personal loans as well
as charge accounts.
Lenders will look at both your GDS and TDS amounts in calculating
the size of the loan they will grant you for the home you wish to purchase.
Once they've determined the amount of your monthly income
available for mortgage payments, they'll calculate the mortgage amount
you can have. This is based on current interest rates charged by lenders.
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Try Living On Your New Budget First
Once you've calculated these factors, it's a good
idea to try living for a couple of months as if you were paying a mortgage,
along with your other living expenses, to see just how well you manage.
After all, it may be feasible on paper, but you may not be comfortable
with this amount of your income being allocated towards a mortgage.
Better to find out now, before you actually make a purchase.
You may readjust your spending habits in other areas for
a while. However, if you're comfortable with this test run, then it's
time to start looking for your new home.
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CLOSING
A REAL ESTATE DEAL - WHAT TO EXPECT
Buying a home is a very exciting event. You and your Realtor
will probably have compared many homes before putting an offer on the
one that is "just right" for you.
Having your offer accepted does not mean the end of your
real estate transaction, however. There is still plenty of work that
needs to be done in order to "close the deal."
Your Realtor and your lawyer will take care of many of the
requirements and will guide you through the process of closing. "Closing"
is when the ownership of the property is transferred from the seller
to you and most times it's also when you take possession of your home.
Closing takes place once all the parties in the transaction are satisfied
that all the legal and financial obligations have been fulfilled.
You will be busy taking care of things like arranging financing,
home inspections, insurance, change of address and moving arrangements,
but the first item on your list will be to get a signed copy of the
Agreement of Purchase and Sale to your lawyer. Your lawyer will want
to see the date you and the seller agreed upon to close as well as any
conditions in the offer.
Conditions in the offer need to be met on specific dates
so it's important that you begin satisfying them right away. Most lawyers
won't start the closing process until all of the conditions have been
satisfied and waived from the offer. As each condition is met, your
Realtor will have your sign a waiver removing the condition from the
agreement.
Your lawyer will then begin a title search on the property
to be sure the seller has clear title and can transfer it to you without
a problem. Hydro, gas and water companies will also be contacted by
your lawyer to ensure there are no outstanding claims for unpaid bills
before these utilities are transferred to your name.
Other tasks your lawyer will perform include gathering reports,
certificates and clearances from various government offices, ensuring
the property taxes are up-to-date, local zoning and building restrictions
have been met and there are no outstanding obligations or "liens" on
personal property to be sold with the house. In other words, your lawyer
will make sure you get what you agreed to buy.
Finally, your lawyer will review and verify the draft deed
which is the document that transfers ownership from the seller to you
and deal with any problems should they arise. A day or two before closing,
you will meet with your lawyer to review and sign the closing documents.
You will be asked to provide a certified cheque to cover the costs involved.
These are the typical Costs to be borne by the Buyer/s:
1) Lawyer or Notary fees & expenses
- Searching title
- Investigating title
- Drafting documents
- Land title registration fees
2) Survey Certificate (if required)
3) Costs of Mortagage, including
- Mortgage company's lawyer/notary (if any)
- Appraisal (if applicable)
4) Fire insurance premium
5) Sales Tax (if applicable)
6) Property Transfer Tax (1% on the first $200,000 + 2% on the balance)
7) Goods and Services Tax
On closing day, both lawyers will exchange documents, keys
and cheques and your deed and mortgage will be registered at the local
registry office. If all goes according to plan, you will be given the
keys to your new home.
For more information about buying a home, speak to your
local Realtor.
(These
articles are provided by the BCREA for the benefit of consumers in the
real estate market. Copyright British Columbia Real Estate Association.
Reprinted with permission.)
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Contact
me today and I shall be most privileged to be of service to you - because
YOU can - especially with Hazel Tan!
Royal LePage Westside
5970 East Boulevard
Vancouver, B.C.
V6M 3V4
Tel : (604) 261-9311
Fax: (604) 261-6648
Toll-free:
1-888-661-9311
E-mail:
hazeltan@shaw.ca
Web
sites:
http://www.royallepage.ca
http://www.hazeltan.com
http://www.hazeltan.ca
http://www.SouthGranvilleHouses.com
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