Home Buying Tips and Advice:

How do I know what I can afford?

There are a number of people to help you review your finances and determine the total value that you can borrow. The best thing to do is meet with a mortgage broker or a lender at your local bank and ask for them to review your personal financial situation.

What is the difference between a Mortgage Broker and a Lender from a bank?

A mortgage broker takes your information and presents it to a number of lenders to help you get the best interest rate. Once the deal has been finalized, your relationship is now with the lending facility that has accepted your mortgage.

A banker working in a bank, will offer you the best rate that the bank they represent has to offer and they will continue to be there for you after your mortgage has been granted.

Both a mortgage broker and a lender can pre-approve you for a mortgage based on preliminary information you provide to them.

What does being pre-approved mean?

After a mortgage specialist has reviewed your financial situation, they can give you a range or estimate of the value of a mortgage that you could take on. Knowing your purchasing value in advance of looking for a home will help you narrow your search and ensure that you are looking at homes within your price range.

Being pre-approved puts you in the driver seat. It provides you with the knowledge of what you can afford to purchase without any commitment to a bank. Mortgage payments don’t start until you actually purchase a home and the legal transaction has occurred.

How much deposit do I need?

The minimum deposit required is 5% of the total purchase price of a home. You should also plan to pay an additional 1.5% for closing costs such as lawyer fees and other miscellaneous expenses.

Purchases made with deposits between 5% and 20% are required to be insured by the Canadian Mortgage and Housing Corporation (CMHC). You will have to pay a fee for the use of the insurance, but it allows you to purchase your home now, rather than waiting to save a full 20% down payment. To find out more, you can talk to your mortgage lender or you can go to www.cmhc-schl.gc.ca

Home Warranty, what is that?

When you purchase a new home in British Columbia, not only do you have the amazing feeling of being the first person to live in the home, you also have the benefit of receiving New Home Warranty Insurance.

Home warranty insurance protects new homes in British Columbia against construction defects such as materials and labour, building envelope and structural defects. It is Canada’s strongest construction defect insurance. For more information on this program please go to www.hpo.bc.ca.

Do I have to pay the Property Transfer Tax and how much will it be? The First Time Home Buyers' Program allows eligible purchasers to claim an exemption from the Property Transfer Tax if the fair market value of the home is less than $425,000. There is also a proportional exemption up to the $450,000 threshold. For other buyers, the fee is 1% on the first $200,000 and 2% on the balance.

What do the Strata fees include?

Be sure to check the disclosure statement to see what is included in your strata fees. There should be a detailed description of what is covered, and a budget provided. The services and amenities will vary for every community.

As a general rule, strata fees include maintenance of common property. Usually, this is everything outside your home, while things inside your home will be your responsibility. They will also cover insurance for common areas, landscaping of the grounds, garbage and snow removal, as well as amenities such as a spa, fitness centre or pool.

At first glance, strata fees seem like an additional expense. The reality is any home, whether a single family home, townhome or condo requires maintenance and up keep. A monthly strata fee is beneficial as it:
1) Is a predetermined monthly fee.
2) Ensures that your building insurance, water and other expenses are paid for.
3) Allows for low maintenance lifestyle as someone else is responsible for maintaining the building.
4) Ensures that funds are tucked away in a contingency fund for a rainy day.

If you have any other questions about buying a new home, please feel free to contact us.

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