With interest rates on the rise and many housing policy changes over the past year, it’s more important than ever for first-time home buyers to have their mortgage pre-approval in hand when beginning the search for a new home.
There are a few reasons why getting pre-approved is so important as you begin the journey towards home ownership. For one, it takes the guesswork out of house hunting! There’s no sense in viewing and falling in love with a home you can’t afford. You can streamline the process and keep only true contenders in the running when you are aware how much you can afford to spend on your new home. Another reason to get pre-approved is that it shows that you’re a serious buyer. Both real estate sales persons and sellers will recognize that you have done your homework and are truly ready to buy. In fact, having a pre-approval in hand may give you negotiating power over another buyer who has not been pre-approved.
Getting pre-approved will also help things move along quicker and smoother during a negotiation. It will allow you to act fast when placing an offer on a home. By getting pre-approved you have started the application process for the mortgage. They will provide you with a pre-approval letter, though it is important to remember that this is not a guarantee of financing. Most realtors will still recommend that you include a condition on financing in any offers you submit. What is a mortgage commitment letter? A little more in-depth than a mortgage pre-approval, a mortgage loan commitment letter means that a full mortgage application was taken, the loan has passed through underwriting and the borrower was approved. A commitment letter is a document that lets everyone in the real estate transaction (real estate sales persons, sellers, etc.) know that the lender is prepared to take on a loan that will cover the cost of a home.
The simple step of getting pre-approved will make your home buying experience run smoother.
As a consumer, you take your time when making a major purchase, researching products, asking for opinions and weighing the pros and cons of the many different options available. When it comes to making life’s biggest purchase – a new home – you’ve likely done the same. You’ve visited the neighbourhoods you’re interested in and have an idea of the average market price. You may have toured a few open houses and have your mind set on the ideal floor plan and style of home you prefer.
It’s true – there’s a lot to think about and even more to understand when buying a home and what you see when you walk from room to room is just the tip of the iceberg. It’s for this reason that finding a seasoned professional to guide you every step of the way is a smart decision for house hunters. Even if you’ve owned a home before and feel confident in your ability to find “the right house”, a real estate salesperson has the breadth of knowledge and a special skill set that comes only with experience – they are dealing with the sale and acquisition of homes on a daily basis.
Here are just a few of the things that a realtor will be looking for during your hunt for a new home:
Wiring – Homes built up until the 1940’s were likely outfitted with knob and tube wiring. In the 60’s, aluminum wire became a popular choice. Both are considered a fire hazard and today many insurance companies will refuse to insure a home with one of these types of electrical wiring or will charge a higher premium. Your realtor will be able to tell if a home has knob and tube or aluminum wiring. Replacing the electrical wiring in an entire house can cost anywhere from $7,000 – $15,000.
HVAC system – A salesperson will be able to tell you the exact age of the furnace and air conditioner and may be able to tell you if these systems have been properly maintained.
Plumbing – Sump pumps, septic tanks, wells and sewer systems….your realtor will be able to explain each of these features in detail.
It’s no secret that Canada’s population is getting older. Census data released earlier this year by Statistics Canada show that, for the first time ever, seniors make up a bigger share of our nation’s population than children. By 2031, the agency predicts that nearly one in four Canadians will be over 65.
Finding suitable and affordable housing for seniors is already proving to be an issue in some municipalities. And if decreasing mobility is a concern, the challenge is even greater. For some families, the only option is to invite aging parents or grandparents home to live with them. If you will soon be welcoming an elderly family member into your home, here are just a few of the ways that you can make adjustments to create a more accessible living space for the new arrivals.
Anyone suffering from arthritis knows that it gets more and more difficult to squeeze and turn door knobs, so a simple first step in making your home accessible is replacing knobs with levers, which push down easily.
Installing grab bars and handrails is another easy way to make your home safer without making a major change. Every staircase should have handrails on both sides and there should be grab bars near toilets and bathtubs. If you do have the option to renovate a bathroom to make it more accessible, leave out the tub and replace it with a shower. When tackling a major renovation, be sure to enlarge doorways to 32-36 inches in case wheelchair access is needed now or in the future. Swing-away hinges may work to widen a doorway slightly if a temporary solution is needed.
Area rugs look nice but they can actually be a hazard for the elderly, causing trips and falls. Avoid placing small area rugs or runners in hallways, bathrooms or bedrooms.
Household falls also happen when an individual can’t see where they are going. Be sure to change light bulbs as soon as they burn out and add additional lighting to dark staircases, hallways or rooms.
In the kitchen, make sure your cabinet door hardware is easy to grab (D-shaped handles on cupboards and drawers tend to be the easiest), daily use items are within easy reach and clutter is kept off the floor.
With just a few small changes, you can make your home safer for elderly relatives!
Buyers have plenty of choice when it comes to choosing the type of home they will buy. You can purchase new from a builder, or shop around for a resale townhouse, single family home or condominium.
The latter is an excellent option for first-time buyers, young professionals and retirees or those looking to downsize. That’s not to say that all condos are affordable. A spacious unit in a well-appointed building can easily boast a price tag well into the millions with maintenance fees approaching $1,000 per month.
Whatever your price range, there are a few things to consider and research before settling on a condo purchase.
The first factor to consider is those condominium fees. Possibly one of the great mysteries of homeownership, these fees can turn an outright purchase into what seems like a rental, with monthly payments to factor into your budget for as long as you live at that address. If you have never paid condo fees before and the concept has you running scared, take a few minutes here to understand what they are and what they cover:
• The cost of keeping common spaces (elevators, indoor and outdoor gardens, lobbies and hallways, etc.) clean and in good working order.
• The upkeep of amenities such as fitness rooms, swimming pools, bowling alleys, theatre rooms, spas and party rooms.
• Snow removal, roof repair and insurance.
You’ll also want to think about the building’s amenities. Before you move into a condo, decide whether its in-house bells and whistles are perks you’ll use often enough to warrant the fees you’ll be paying for them each month.
A final consideration is the condo corporation’s status certificate. A status certificate is a prospective condo owner’s first look into the financial health of their potential investment. This comprehensive report gives all the details on the current fees that owners pay, any large fee increases that may be on the horizon and any liens or arrears owed by particular owner(s). Financial statements are also a part of the status certificate and will show the trends in expenditures and receipts of the past, and provide comparisons of a corporation’s actual and expected costs. To get your hands on a condominium’s status certificate, you must submit a written request to the condo board’s management company, plus a $100 fee. They have 10 days, as required by law, to provide the certificate.
If you’re thinking of selling your home in the next six months, year or even two years, it’s never too soon to start thinking re-sale value. Improvements to your home will almost always add value so it’s in your best interest to choose upgrades that are of good quality and have universal appeal – converting a spare bedroom to a luxurious master suite will attract a select few potential buyers but may actually be viewed negatively by the majority of buyers. Here’s a look at some household features that many buyers are looking for in 2017.
- Smart Home Technology – More and more buyers are looking for a home that boasts smart home features and technology. Included are items in three general categories: features for practical and functional use (i.e. kitchen appliances with LED touchscreen displays, NEST thermostats and remote-controlled shades), features for lifestyle and entertainment (i.e. built-in sound systems and automated lighting systems) and items for safety and security (i.e. smart locks, Wi-Fi video doorbells and security cameras).
- Hardwood Flooring – It’s estimated that 80% of buyers have hardwood floors included in their list of must-haves when house-hunting. Durable, long-lasting and aesthetically pleasing, hardwood is one of the most expensive flooring options available but also one of the best investments from a resale value standpoint.
- Updated Kitchen and Bathrooms – We all know that kitchens and bathrooms sell a home, so if you have reno dollars to spend, it’s wise to shell out the cash to upgrade the heart of the home and bathrooms. Updated cabinets, quartz or granite countertops and newer appliances are all something that potential buyers will be looking for when house-hunting. When it comes to bathrooms, more and more buyers are seeking a little luxury. Freestanding tubs, high-tech toilets, unique tile shapes and heated floors will appeal to discerning buyers.
- Outdoor Living Space – With such a short hot and sunny season here in Canada, many homeowners want to take advantage of the summer weather while it’s here, making fancy outdoor kitchens and living spaces a hot commodity.
Even homeowners who do all their homework before buying are occasionally surprised by how quickly the many expenses of home ownership add up each and every month. But rest assured; if you stick to your budget and make a few sacrifices here and there, it is possible to save money and maybe even pay off your mortgage a few years early!
Mortgages are compounded with hundreds of payments to slowly reduce both your principle loan as well as interest charges, so you can expect interest-heavy payments for the first five to seven years as your bank makes lending you all that money worth their while. But there are ways to pay down your mortgage faster and save money in the long run!
Bi-weekly is best – Opting for an accelerated biweekly payment schedule will not only allow you to make 26 payments a year, it will also reduce both your interest rates and principle amount faster. Lenders may charge you an additional fee, but this is money well spent.
Round it up – Did you know that a hypothetical increased payment of $1,000 instead of $830 could save up to $48,000 over the course of the mortgage? That’s nearly eight years of payments! Ask your lender if this is an option for you.
Make a lump payment – If you get an annual bonus or consistently receive a substantial income tax return, consider using the windfall as a lump payment at the time of your mortgage renewal or sooner if your lender allows it.
When it comes to saving money, it’s common to have difficulty during your first few years of homeownership as you adjust to the added expenses. But it can be done. Here are a few simple ideas to help you cut back:
- Online grocery shopping. How many times do you walk into a grocery store with nine or ten items on your list and leave with a cart full? Instead, do your shopping online and simply drive to the store to pick up your order – no more impulse buying! Check your local retailers to see if the service is offered
- Make your own lunch and coffee every day
- Use public transportation if available
- Install a programmable thermostat to save on energy bills