Buying your first home

 
The right home for you:
 
Before you start shopping, know what you are looking for in a home such as size requirement, special features, lifestyle and stages of your life, setting, works, school, hobbies, family and friends, cultural. Most homebuyer will rely on a real estate agent to help with the home selection and the purchase process.
 
Real estate agents will listen to your needs, show you suitable homes to visit and negotiate on your behalf to help you get the best possible deal. They can also provide you with previous sales prices of comparable homes and information about the neighbourhoods as well as arrange the home inspection.
 
Do your research: It’s important to learn as much as possible about the home you want to buy. It’s also important to research the people and organization that are helping you buying your home: real estate agent, lender, mortgage broker, lawyer or home inspector. Don’t forget some tips for finding a home by telling friends and your contacts of the need, check classified section for homes sale on newspapers, real estate websites and drive around the neighbourhood that interests you looking for “For Sale” signs.
 
Making the offer:
 
The real estate agent will help you to prepare the Offer to Purchase which likely to include:
 
- The purchase price offered
- The amount of the deposit
- Extra items such as window coverings, refrigerator, stove, washer and dryer that you might want to include into the purchase price (also called chattels)
- The closing day (date you take possession of the home) – usually 30 to 60 days from the date of agreeement.
- A request for current land survey of the property
- The date when the offer becomes null and void.
- Any other conditions that go with the offer, including approval of “mortgage financing” or and a “home inspection”, etc.
 
Financing your home:
 
Most homebuyers rely on lender for a mortgage which is repaid by you in regular payments, normally upto 25 years. Discuss with your mortgage lender to get pre-approval to know exactly how much you can spend on your new home. Mortgage brokers will help you with mortgage advice, works on your behalf to secure the best mortgage terms and conditions.
 
If the down payment is less than 20% of the value of your new home, your lender will require ‘Mortgage loan insurance’. CMHC as the leading mortgage insurer can offer newcomer with permanent resident status a minimum down payment starting at 5%, regardless of how long you have been in Canada. Non-permanent residents can also purchase a home with minium down payment of 10% of the value of the home.
 
A newcomer will need to build credit history as early as possible to obtain a mortgage through open bank account or credit card, use these regularly and consistently pay your bills on time.
 
 
Most common elements of a mortgage are:
 
- Amortization period: length of time  you choose to pay off your mortgage, typically 25 years.
- Payment schedule: where you have the option of repaying your mortgage every month, twice a month, every week, etc.
- Interest rate: Can be fixed, variable or protected variable which result in different rates
- Mortgage term: length of time for which options are chosen and agreed upon, such as interest rate.
- An open mortgage allows you to pay off your mortgage in part or in full at anytime without any penalties. Close mortgage usually carries lower interest but doesn’t offer the flexibility of an open mortgage.
 
Home inspection:
 
An inspection hired by you will make a detailed inspection of the property. Based on that you and your real estate agent will have to discuss required repairs, if any, may affect the sales price that was agreed upon.
 
Closing day:
 
This is the day you get the keys and start to settle in your new life as a homeowner. Ususually you pay the lawyer at this time, including all associated costs with closing the sale like heating expenses or property tax, lawyer fee, land transfer tax, etc.   
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