6 Things You Should Know Before Buying
Before you commit to monthly mortgage payments, consider these 6 issues. Effective consideration of these areas can make your payments work much harder for you. more...

Extra Costs to be Aware of Before Buying a Home
Whether you're looking to buy your first home, or trading up to a larger one, there are many costs - besides the purchase price - that must consider into your calculation of affordability. These extra costs, such as taxes and other additional costs could surprise you with unexpected costs on closing day if you're not properly informed and prepared. more...

How to Save Thousands When You Buy
If you're like most homebuyers, you have 2 primary considerations in mind when you start looking for a home. First, you want to find a home that perfectly meets your needs and desires, and secondly, you want to purchase this home for the lowest possible price. more...

Best Financing: A 3-Point Plan
When you're looking to buy a home, the first thing most buyers do is start looking at homes. However, experience proves that this is one of the last steps to take if you want to get the most home for the least amount of money. Shopping for the best financing should start before you startshopping for a home. more...



6 Things You Should Know Before Buying

Mortgage regulations have changed quite significantly over the past few years, giving you more options than ever. Subtle changes in the way you approach shopping for a mortgage and even slight differences in the way you structure your mortgage, can literally cost or save you thousands of dollars and years of expense.

Before you commit to monthly mortgage payments, consider these 6 issues. Effective consideration of these areas can make your payments work much harder for you.

  1. You can, and should, get pre-approved for a mortgage prior to looking at homes.
Pre-approval is easy, and can give you peace of mind when shopping for your home. Your local lending institution can provide you with written pre-approval for you at no cost and no obligation, and can be done quite easily over the phone or on the internet. More than just a verbal approval from your lending institution, a pre-approval in writing is as good as money in the bank. It entails a completed credit application and a certificate, which guarantees you a mortgage to a specified amount when you find the home you wish to purchase. It can also be an important bargaining tool.

  1. Know what monthly dollar amount you feel comfortable committing to.
When you discuss your pre-approval with your lending institution, find out what you qualify for, but also ask yourself what monthly dollar amount you feel comfortable committing to. Your pre-approval may give you an amount that is higher (or lower) than the amount you may want to pay out each month. By working with your lending institution to determine what this monthly amount is, you won't waste time looking at homes that are not in your price range.

  1. To determine the type of mortgage that will best suit your needs, you should think of your long term goals and expected situation.
There are several questions you should ask yourself prior to committing to a certain type of mortgage. How long do you plan to own this home? What direction are interest rates going and how quickly? Do you expect your income to change (up or down) in the near future and how might this impact how much you can afford to pay to your mortgage? The answers to these and other questions will assist you in determining the most appropriate mortgage for you.

  1. Make sure you understand what pre-payment privileges and payment frequency options are available.
Weekly or bi-weekly mortgage payments can literally take years off your mortgage. By arranging for payments to come out more frequently you will significantly lessen the amount of interest you will be charged over the long term. For the same reason, approved pre-payment of a certain percentage of your mortgage or an increase in monthly payments will have a major impact on the number of years you will have to pay and could shorten your payment term by a considerable amount.

These 2 payment options can cut years off your mortgage and save you thousands in interest. However, not every mortgage has these pre-payment privileges built in, so make sure you ask the proper questions.

  1. Ask if your mortgage is both portable and/or assumable.
A portable mortgage, where available, is one that you can carry with you when you purchase your next home and avoid paying discharge penalties. This means that you won't have to go through the entire mortgage process again unless you are moving up to a much more expensive home.

An assumable mortgage is one that the buyer for your home can take over when you move to your next home. This can be a good tool at the negotiating table, making it easier and more desirable for a buyer to buy your home, and again saves you any discharge penalties.

  1. You should seriously consider dealing with a Mortgage Broker.
Consider dealing with a professional who specializes in mortgages. Enlisting their services can make a significant difference in the cost and effectiveness of the mortgage you obtain.

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Extra Costs to be Aware of Before Buying a Home

Whether you're looking to buy your first home, or trading up to a larger one, there are many costs - besides the purchase price - that must consider into your calculation of affordability. These extra costs, such as taxes and other additional costs could surprise you with unexpected costs on closing day if you're not properly informed and prepared.

Some of these costs are one-time payments, while others represent an on-going monthly or yearly commitment. Not all of these costs will apply in every situation; however, it's a good idea to know about them ahead of time so you can budget accordingly.

Remember, buying a home is a major milestone. Whether it's your first, second or tenth home, there are many important details to address. The last thing you need are unbudgeted financial obligations cropping up just before you take possession of your new home.

Read through the following list to ensure you're budgeting properly for your move:

  1. Appraisal Fee
Your lending institution may request an appraisal of the property which may be your responsibility to pay for. Appraisals can vary in price - the average is approximately $200.00.

  1. Property Taxes
Property taxes will be calculated based on your closing date. If the seller has pre-paid any property taxes, the adjustment will be applied. You may also want to arrange to pay your taxes on a monthly basis instead of paying a lump sum once a year.

  1. Property Insurance
Home insurance covers the replacement value of your home (structure and contents). If you take a mortgage out, your lending institution will request proof that you are insured as it protects their investment. RE/MAX Insurance is conveniently located in our office.

  1. Service Charges
Any new utility services that you hook up may require a deposit or installation fee.

  1. Legal Fees
Even the simplest of home purchases should have a lawyer involved to review the paperwork. Clark & Clark, a legal firm specializing in real estate law is conveniently located in our office.

  1. Mortgage Loan Insurance Fee
Depending upon the equity in your home, some mortgages require mortgage loan insurance. This type of insurance will cost you between 0.5% - 3.25% of the total amount of the mortgage. Usually payments are included with your mortgage.

  1. Mortgage Broker's Fee
A mortgage broker is entitled to charge you a fee in order to source a lender and arrange the financing. However, it pays to shop around, as many mortgage brokers will provide their services to you at no charge by having the lending institution absorb the cost.

  1. Moving Costs
Moving costs will vary considerably depending mainly on how much you do yourself.

  1. Condominium Fees
If you are purchasing a condominium, you will have monthly fees to pay. Check the amount and what is included "before you buy".

  1. Water Quantity and Quality Certification
If the home you're purchasing is serviced by a well, you should consider having your water checked by your local experts. Depending upon where you live determines whether or not a fee is charged to certify the quantity and quality of the water.

  1. Local Improvements
Check to see if a local improvement tax has been levied. Sometimes, the City has made improvements to the area and passed the cost onto the homeowner. Examples of this are paved back alley, new sidewalks or underground lighting.

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How to Save Thousands When You Buy

If you're like most homebuyers, you have 2 primary considerations in mind when you start looking for a home. First, you want to find a home that perfectly meets your needs and desires, and secondly, you want to purchase this home for the lowest possible price.

When you analyze those successful homebuyers who have been able to purchase the home they want for thousands of dollars below a seller's asking price, some common denominators emerge. Although your agent's negotiating skills are important, there are 3 additional factors that must come into play long before you submit an offer.

These Steps Will Help You Save Thousands When You Buy a Home:

Make sure you know what you want... As simple as this may sound, many buyers don't have a firm idea of what they want before they go out shopping for a home. In fact, when you go shopping for a home, there are actually two homes competing for your attention: the one that meets your needs, and the one that fulfills your desires. Obviously your goal is to find one home that does both. In the real world, this situation doesn't always occur.

When you're looking at homes, you'll find that you fall in love with one or another home for completely different reasons. Is it better to buy the 4 bedroom home for your growing family or the one with the big eat-in kitchen that tempts you with thoughts of big weekend family get togethers? What's more important: a big back yard? or proximity to your child's school? Far too often, people buy a home for the wrong reasons and then regret their decision when the home doesn't meet their needs.

Don't shop with stars in your eyes: satisfy your needs first. If you're fortunate, you'll find the home that does this and also fulfills your desires. The important thing is to understand the difference before you get caught up in the excitement of looking.

Find out if your agent offers a "Buyer Profile System" or "House-hunting Service", which can take some of the guesswork out of finding a home that meets your needs. This type of service will keep you up to date on all available homes on the market that match your criteria and supply you with printed information on a daily basis. A program like this helps buyers take off their rose-colored glasses and affordably move into the home of their dreams.

To help you develop your home-buying strategy, make 2 lists:

  1. What do I absolutely NEED in my next home? ... and
  2. What would I absolutely LOVE in my next home?

How Sellers Set Their Asking Price

For you to understand how much to offer for a home you're interested in, it's important for you to know how sellers price their homes. Here are 4 common strategies you'll begin to see when you start to view homes:

  1. Clearly Overpriced:
Every seller wants to realize the most amount of money they can for their home, and every real estate agent knows this. If more than 1 agent is competing for a listing, an easy way to win the battle is to over-inflate the value of the home. This is done far too often, and many homes are priced 10-20% over their true market value.

This is not in your best interest because in most cases, the market won't be fooled, resulting in a home remaining on the market for months, leaving sellers with a couple of important drawbacks:

  • the home is labeled as a "troubled" house by other agents, leading to a lower than fair market price once an offer is made
  • the sellers have been greatly inconvenienced with having to constantly have their home in "showing" condition... for nothing. These homes often expire off the market, forcing the sellers to go through the entire listing process a second time.


  1. Somewhat Overpriced:
About of the homes on the market are 5-10% overpriced. These homes will also sit on the market longer than they should. There is usually 1 of 2 factors at play: either the sellers truly believe that their home is actually worth this much despite market indicators OR they have left room for some negotiating. Either way, this strategy will cost sellers both in terms of time on the market and the price they will receive for their home.

  1. Priced Correctly at Market Value:
Some sellers understand that real estate is part of the capitalistic system of supply and demand and will price their home based on an analysis of other homes on the market. These competitively priced homes usually sell within a reasonable time-frame and very close to the asking price.

  1. Priced Below Fair Market Value:
Some sellers are motivated by a quick sale. These homes attract multiple offers and sell fast - usually in a few days - at, or above the asking price.

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Best Financing: A 3-Point Plan

When you're looking to buy a home, the first thing most buyers do is start looking at homes. However, experience proves that this is one of the last steps to take if you want to get the most home for the least amount of money. Shopping for the best financing should start before you start shopping for a home.

Outlined below, are 3 important steps you should take to get the best financing rates when buying a home. Find out where to enquire, what questions to ask and how to manage the process to your advantage.

  1. Get pre-approved for a Mortgage.
Getting pre-approved for a mortgage will give you a number if benefits, including emotional security in the house-hunting process and insurance against the possibility of rising interest rates. Pre-approval is simple and can give you peace of mind when shopping for your home. Mortgage brokers can get written pre-approval for you at no cost and no obligation. More than just a verbal approval from your lending institution, a written pre-approval is as good as money in the bank. It entails completing a credit application and a certificate which guarantees you a mortgage a specified level when you find the home you're looking for. Pre-approval means: no last minute shopping around for money and rates and if rates go up, you will still get the pre-approved rate, but if rates go down, you will receive the lower rate.

  1. Receive Preferred Access to Special Low Financing.
Agents that conduct hundreds of real estate transactions each year may be able to offer you certain negotiating advantages with lending institutions. These lenders are often anxious to do business with these agents and their clients and may be willing to extend better than average rates.

This can make buying a home easier and more affordable for many buyers to qualify for a minimum down payment and low monthly payments. Therefore, many more buyers can own the home of their dreams much sooner than they thought possible.

  1. House-hunting Service
Most agents offer a house-hunting service to assist you in finding the home you want. Through these programs, you can find out in advance which homes that are currently on the market match your criteria. To do this, simply provide your agent with your criteria (districts, price range, number of bedrooms, etc) and you should start receiving notification (with photos) of homes that match your criteria. This will give you an edge over other buyers as you will be notified of homes that match your criteria as they come on the market. You can drive by homes that are of interest to you and let your agent know which ones you want to view.

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