Benefits of Home Ownership?

Pride of Home Ownership

Pride of home ownership is the number one reason why Canadians desire their own home. There is no landlord looking over your shoulder. You are able to make home improvements knowing that any appreciation that results, will be to your benefit. Home ownership gives you and your family a sense of stability and security. It’s making an investment in your future.

Appreciation

In Canada, especially in the last few years, homes have appreciated considerably and in doing so have added substantially to owners net worth. Unlike stocks and bonds, you get to live in your real estate investment. Also, in Canada your principal residence is exempt from capital gains taxes.

Mortgage Reduction Builds Equity

Each month, part of your monthly payment is applied to the principal balance of your home loan, which builds your equity. You can borrow against a home’s equity for a variety of reasons such as home improvement, sending your kids to university or college, or starting a new business. Why pay-off your landlord’s property when you can own your own?

Homeowners accumulate wealth for the future while enjoying the benefits of a shelter that they have can use, improve and sell. Their home is a safe haven for investment.

Are You Ready to Buy a Home?

First – do you have the financial resources? You should have five percent of the purchase price of a home for the down payment, but ideally even more. Are there other priorities in your life e.g. starting a new business, which require your savings? If not, buying a home should be on your radar.

Second – do you expect to stay in your new home for some time? Moving can be expensive and you will want to build some equity before having to relocate. Your job and home life should be stable.

What Can You Afford?

If you haven’t already gone through the mortgage pre-qualification process, you will need to meet with a lender or mortgage broker. They will establish how much of a mortgage you will qualify for. Mortgage rates vary considerably and it is paramount that you shop around for the best rate, terms and options.

Our Mortgage Calculator will help you determine what monthly mortgage payment and the maximum mortgage you can manage. Note: if you are buying a condo, the amount of your monthly assessment has a direct impact on how much you can afford to spend on your mortgage.

First time home buyers may want to take advantage of the federal government’s Home Buyers’ Plan. Under this plan, you may use up to $25,000 of your RRSP towards the purchase of a home. The money is tax-free as long as you pay it back in the next 15 years. Ask your Kidder & Company Sales Associate for details.

Questions To Ask When Assessing Home Features

• Do you need several bedrooms, more than one bathroom, space for a home office, a two-car garage?
• Do you want air conditioning, storage or hobby space, a fireplace, a swimming pool? Do you have family members with special needs?
• Do you plan to have children? Downtown or suburbs? Proximity to recreation or work.
• Do you need a substantial backyard? Pets?
• Is there adequate storage space?
• Will any remodeling be required to make the home move-in ready for you?
• What service providers (cable, Internet, telephone, Satellite) are available in the area, and is the house completely wired for each? Can you hear me now – how good is the cell phone reception?
• How much are the yearly property taxes?
• How much do utilities run each month? Does the house use gas or electric for the furnace, water heater, and appliances?
• How old are the major appliances, and which are included with the house?
• Have there been any major repairs to the house, and if so, when were they completed? For example, how old is the roof? Has water ever damaged the basement or foundation?
• Ever had problems with insects, such as termites and spiders, or rodents?
• Older homes need to be carefully examined – Windows may need caulking or new sashes, bathroom tiles may need grouting, home may need rewiring (planning on a hot tub or sauna?), a new hot water heater, or a new furnace.

Location, Location, Location

• How far will you be commuting and what is the traffic like? Factor in cost of fuel.
• Where will your children attend school and how will they commute?
• Are there recreational facilities and parks close by?
• Are you close to family and friends?
• Is safety or high crime an issue?
• Is the property close to an obstacle or negative influence? (i.e. an apartment building, shopping centre, school, radio tower, power lines, LRT or railroad track, highway, airport or commercial project).
• Access to schools, work, recreation, shopping centres, public transportation, cultural attractions, libraries, churches and hospitals
• Adjacent undeveloped land – what is proposed for this or other green space?
• Heavy traffic can be noise nuisance and hazard for children
• Distance from the unit to amenities, parking, walkways, roads, public transit
• Does the neighborhood reflect positively on the value of the condo and your lifestyle choice?
• Does this neighborhood, for any reason, have a poor reputation?
• Is the future economic climate for the area good? Are businesses moving in? Is there government investment?
• Are people moving in or out of the neighborhood? What is their age, income level, family size?
• Are there plans for this neighborhood that you may be unaware of (i.e. a future highway, a commercial development or a new housing development) that will provide competition on resale?

Noise and Privacy

• Proximity to highways, driveways, parking lots, playgrounds, trains.
• Proximity to elevators, garbage disposal, fire exits, heating and air conditioners.
• How well is the building soundproofed.
• Visit at different times/weekends to check noise levels and activity.

Helpful Checklist

Determine What You Want

On a scale of 0 to 5, rate the following characteristics most important to you in a home and neighbourhood:
0 = not important     3 = moderately important     5 = must have

Specific requirements:
Number of Bedrooms: _____     Number of Bathrooms: _____
Style of Home:  Single dwelling___ duplex___ condo___ townhouse___ acreage___

The AGENT

I can provide you with the following services:

• Act as a consultant to determine your real estate needs, help you establish what you can afford and assist you with mortgage financing. I will also advise you of costs such as legal fees, legal disbursements, closing costs and down payment options involved in the buying process.
• Identify and represent you in one of three market scenarios:
• Buyers Market
• Sellers Market
• Balanced Market
• Identify communities and homes that are most suited to you as an individual, couple or family.
• Research all MLS® listings to find the right home for you. I also have “first knowledge” of new listings as they are recorded.
• Advise you when homes are overpriced.
• Provide information on properties and accompany you as an adviser when showing suitable properties.
• Promptly present offers and negotiate on your behalf. Negotiations could involve one or numerous counter-offers.
• I will guide you through the process if there is more than one offer for the property on which you have made an offer to purchase.
• Arrange an inspection.
• Guide you through the process from offer to closing. This includes facilitating the completion of all paperwork and monitoring all closing activities.
• Keep you informed throughout the entire purchase process.

The buyer’s AGENT is paid from the seller’s commission. There is no direct cost to you. A AGENT works without pay until they find the right home for you and successfully closes an offer to purchase at a price and terms acceptable to you.

Checklist When Hiring a AGENT

• Do they specialize in any particular part of the market? Do they focus more on buyers or sellers market?
• Will I be in control of the process?
• How much do they know about the community that I want to buy in?
• What assurance do I have that they will service my needs? Do they have testimonials from prior clients or letters of recommendation?
• How will they keep me informed?

Mortgage

Get a pre-approval letter for a mortgage. Mortgage factors to consider:

• What type of mortgage is best for you?
• How much should your down payment be?
• Are you eligible for an RSP homebuyer withdrawal?
• There may be a fee for mortgage application and appraisal fee.
• Documents needed to secure a mortgage include:
  • A copy of the real estate listing of the property OR for a new home, the builders plans, lot size and location.
  • A copy of the offer to purchase.
  • Documents confirming employment, income and source of pre-approval.

Home Inspection (Recommended)

By hiring a home inspector prior to purchase, you will protect one of the most important investments of your life. A home inspection will reveal the structural and mechanical soundness of your home. The report will advise you of:

• Existing and potential problem areas.
• Suggested solutions.
• Cost estimates for any work required.

Your Royal LePage Integrity AGENT can recommend a qualified home inspection service or arrange for an inspection to assess your new home. Inspection costs range according to size, age and location.

Closing

Set aside enough funds to close your deal. Closing expenses include:

• Legal fees.
• Legal disbursements.
• Tax closing adjustment.
• Utilities closing adjustment.
• Property inspection (recommended but optional).
• Deed and mortgage registration.
• Real property report.
• Land transfer or property purchase tax.
• Mortgage interest adjustment and takeover fee (if applicable).
• Utility and cable connection charges.
• Home and property insurance coverage.
• Mortgage Insurance.
• Life
• Disability
• Moving Expenses.

On closing the deal:

• Schedule mortgage payments and property taxes.
• Secure insurance coverage.
• Transfer utilities.
• Arrange the move.