Mortgage Information - The Right Home

You have a pretty good idea of the price range you can afford, and now it's time to fine tune and have everything come together.

Obtaining a pre-approval tells you exactly how much you can afford and guarantees your rate for up to 120 days. Now, you can buy a home with the confidence of knowing you qualify. It also shows the vendor you are serious about buying the home and keeps you several steps ahead of others in the market.

Now that you know your price range, you can begin the search. First, make a Checklist of your needs the home will fulfill, such as: type of home, type of ownership, location, inside and outside features, condition, and other matters such as property tax levels, etc. At this time, you should decide on a lawyer so that he/she will be ready to check all legal documents to ensure your interests are protected.

With your pre-approval, personalized needs checklist, and lawyer at hand, you are ready to start looking at properties. At this time, it is important to find yourself a real estate agent to help you with your search. The real estate agents have a lot of information readily available for sale and the current selling prices. They can help you fine tune your personalized needs checklist; explaining the types of property and ownership, recommending neighborhoods, pointing out inside and outside features, and condition of a particular property.

The agent also is skilled at preparing the paperwork involved in making an offer to purchase and closing the sale (your lawyer will be handy here to review any offers). Make sure that you communicate your needs clearly, as you are responsible for all decisions. Choosing the right agent is important for you as you are placing a lot of trust on them to help you with your purchase. Ask friends and relatives if they could recommend someone. Chances are, if they are recommending them, there was something about the level of service and commitment they received from them.

Once you have found the right home, visit it at least twice, once in the daylight and once at night, and have your needs checklist with you.

If you have decided that this is the right home for you, decide on a figure and have your agent prepare the Offer (Agreement of Purchase And Sale). With your agent, list everything you want included (i.e., conditions on financing and inspection, survey clause, appliances, light fixtures, etc.). At this time, you may want your lawyer to check it out, and certainly prior to waiving any conditions to make the offer firm.

A firm offer : means that you will buy the property as outlined in the offer of purchase and that there are no conditions attached. Once the vendor accepts the offer, you are both bound to the agreement.

A conditional offer : means that you will buy the property if those certain conditions are met. We recommend that a condition on financing is included, especially for high-ratio insured mortgages. If you have a condition on financing clause, get in contact with us right away. We'll get right on it to finalize the mortgage approval. At this time, you will need the following information:

Copy of the accepted Offer To Purchase
Copy of MLS listing (if listed on MLS service)
Completed and signed application (if one is not on file yet, so that we can run a credit check).
Confirmation of your earnings: if you are salaried, a signed letter of employment, 3 years tax returns and assessments if commissioned, and 3 years tax returns and financial statements if self-employed.
Confirmation of your down payment: it may be from your savings, RRSP, equity from sale of another home (copy of sales agreement), a gift letter for any money gift.
If purchasing a condominium, a copy of the financial statements for the condominium corporation

Once all conditions have been satisfied (the offer has been accepted), a deposit is required as a symbol of commitment to the offer of purchase, and it is made payable to the listing Real Estate Firm "In Trust". Interest on the deposit can be requested, and this deposit will be applied towards your down payment on closing.

After the mortgage has been approved and all conditions waived, you must deliver the following documents to your lawyer:

Copy of the complete accepted offer to purchase (all schedules, waivers, etc)
Certificate of Fire Insurance - The insurance company will need to know the details of property and Mortgage Company to prepare this. Lenders usually require you to arrange for full replacement value of the building.
A copy of a Survey, signed by a qualified land surveyor. In lieu of a survey, title insurance is acceptable with most lenders.
Advise us of the name, address, and phone number of your lawyer so that the mortgage instructions can be sent to him/her.
You should arrange for utilities (such as electricity, water, fuel, and telephone) to begin service in your name.
A few days before the closing date, you will meet with your lawyer to go over all details. At this time, you will also be provided with a dollar figure so that you can prepare your certified cheque, made in trust to the lawyer. This amount will cover for the balance of the down payment, closing costs and adjustments (please refer to section: "Closing Costs and Adjustments" for details and estimated costs).