Buyers

Step 1 is to get pre-approved for a mortgage. A pre-approval lets you know how much you can spend and locks you in at the current interest rate for 90 days or more, allowing you to shop with confidence. This is especially important with a potential interest rate hike by the Bank of Canada, which may impact your mortgage rate and ultimately, your home-buying budget.

There really isn’t. Prices depend on a number of factors like supply, demand and other housing market conditions. These can vary greatly from city to city, and from one neighbourhood to the next. Rather than season, the number of days on market is the biggest indicator of your negotiating power. If the home was recently listed, the seller will have had less time to test the market and gauge buyers’ response to the price, and will be less likely to negotiate.

The down payment is an essential part of your purchase. There are private lenders who offer mortgages with lower down payment, but the interest rate will likely be much higher and the cost to you will be much greater. This is generally not recommended due to risk, but can offer creative financing strategies. Saving up at least five per cent of the purchase price is the best way to start, and consider reducing your home-buying budget to make it more affordable. In Ontario you will require 5% down on $500k or less, a blended rate of 5-10% for homes between $500k-$999k and 20% for $1M or more. 

There is a common misconception that mortgage loan insurance protects the borrower. This is not the case. Mortgage loan insurance is there to protect the lender against default in payments by the homebuyer. If the buyer has a down payment of less than 20 per cent of the purchase price, the lender will purchase default insurance and pass that cost on to the borrower. This can be paid up front or tacked on to the mortgage payments and stretched out over time. Mortgage loan insurance is offered by companies like Canada Mortgage and Housing Corp., Genworth Financial Canada, Canada Guaranty, or another approved private insurer.

Closing costs will typically range from 1.5 to 4 percent of the home’s purchase price. You can expect to pay for your home inspection, mortgage default insurance if your down payment is less than 20 per cent of the purchase price, the Land Transfer Taxes, lawyer fees, appraisal fee and property taxes, among other things. Make sure you budget for this! On a $500,000 home, closing costs can range from $7,500 to $20,000.

If you have a poor rating, do some damage control before you apply for your mortgage. For more information, contact our trusted team of mortgage agents.

The Agreement of Purchase and Sale will have many terms and conditions that both parties negotiate and finally agree to before finalizing a deal. If one party wants to make any changes after the deal has been accepted, it must be done through an amendment to the agreement, a separate document that all parties sign in agreement to the changes. Sometimes a clause is added to the original deal that gives one party, buyer or seller, the right to change the closing date. The clause will be written in a way that dictates whether or not they can do this unilaterally, by simply serving notice to the other party. On the other hand, it may say that the date can only be changed by mutual consent, in which case an amendment must be generated and all parties must agree. When an issue arises and changes are requested, they can be made the same way, through an amendment to the agreement, and no clause is needed in the original Agreement of Purchase and Sale.