Hi everyone
I will be starting a new weekly segment on my blog called the Brampton Real Estate Recap, where I will be summarizing some of the most common questions I received from my buyers, sellers, or readers from this blog. Most of these questions are quite relevant to how the Brampton real estate market is doing and the common issues that clients are facing when buying or selling.
If any of you have any questions you’d like to have answered and possibly featured here in an upcoming article, I invite you to join my Brampton Real Estate Message Board. It’s free to sign up, and you’re encouraged to post your thoughts, questions, or suggestions about anything. I’ll post any helpful or interesting questions here every week.
And now, without further delay, here are my top real estate questions of the week:
What does “sold conditionally” mean? Can I still see the house?
When an offer is accepted between a buyer and a seller, the offer is considered only sold conditional. Typically, in the sale of a home, the buyers will have 5 business days to arrange financing with their bank and have a home inspector visit the home to ensure that there are no major defects with the house. If the sale involves a condo apartment or townhouse, the buyers will have 5 business days to arrange financing with their bank and typically 2 business days to have their lawyers review the status certificate from the condo corporation. Whether it’s a house or a condo, if both of these conditions are fulfilled, the deal is then able to go firm.
During the conditional period, sellers have the option of continuing to allow prospective buyers to view the property or suspending showings altogether.
What is a status certificate?
I’ve written a previous article about this here, but in summary, a status certificate is a report that is ordered by the seller upon acceptance of an offer and provided to the buyer for review. This report outlines important information, such as the condo corporation by-laws, how much money is in the reserve fund, the current budget, how much maintenance fees are and whether they are predicted to increase or remain the same, potential claims against the corporation, and other financial information. The buyer’s lawyer will review this status certificate and determine whether or not the condo corporation is healthy or not, and if it is, the buyer will be advised to proceed with the purchase.
What should I expect if I’m a buyer in this market?
Despite the fact that Brampton is one of the busiest real estate areas in the GTA, inventory of good homes are still low. This has created a hot sellers market, and buyers who eventually find a suitable home find themselves competing in a multiple offer scenario with other buyers. Many homes are selling close to listing price, and a handful are selling above listing price. If you are in the market of buying a home, be prepared to submit an offer on the same day you find the right home, provided the sellers are accepting offers. If you wait even a day or two, it may be too late.
I heard I’ll need a 10% down payment after April. Is this true?
If you’re purchasing a resale home to live in, you will still be able to purchase with just 5% down. The only change in mortgage rules is for buyers who will be purchasing rental income properties that they won’t be occupying, and if that is the case, they’ll be required to put 20% down.
Will I have to pay HST on the purchase of my home?
If you’re buying a new home, read my article here. If you’re buying a resale home, all taxes are already included in the purchase price! You will, however, be paying HST on such services as your legal fees, home inspection, and other real estate related services.
New Mortgage Rules You Need To Know
Hi everyone
By now you’ve probably heard or read in the news that the federal government is making changes to mortgage rules to ensure that Canadians don’t take on more debt. There is a lot of confusion regarding whether or not buyers will be required to provide a larger down payment or have to meet stricter qualifications. So what are these changes and how do they affect you?
There are 3 major changes you’ll need to know about:
- Qualifying at a 5 year rate
All borrowers will be required to meet the standards for a five-year fixed rate mortgage even if they choose a mortgage with a lower interest rate and shorter terms.
- Refinancing limited to 90% of the loan-to-value ratio
Currently, borrowers are able to refinance their mortgage up to 95% of the property value. This amount has now been reduced to 90%, in order to help homeowners maintain equity in their home.
- Minimum 20% down payment required on non-owner-occupied properties
A 20% down payment will now be required for small (ex. 1 – 4 unit) residential rental properties if the owner does not occupy the property. If the owner intends to live on the property (ie. a rental property), they will still be able to purchase the property with only 5% down.
These changes will go into effect on April 19, 2010.
For more details, visit my thread on my message board.
Buying a home in Brampton with no money down
If you’re thinking of buying a home in Brampton soon and are worried about coming up with a down payment, there is still a zero down mortgage program available for you to explore. Essentially, what you would be getting is a cash back from the lender that you would apply as your down payment.
This mortgage program is a lifesaver for those who want to take advantage of the low interest rates and brisk real estate market in Brampton, but don’t have enough cash in the bank as a down payment. The interest rate will not be as low as a regular mortgage with 5% down, but it does get home buyers into a position where they can own their own home at an affordable monthly mortgage payment.
Here are some quick details:
- A minimum of 650 credit score is required
- Maximum cash back from this program is $25,000
- Amortization is 35 years
- Mortgage is calculated on a 5 year at the posted rate (currently 5.39%)
If you’re currently renting and am considering owning a home, but don’t have the cash for a down payment, this program may be for you. Don’t let this strong Brampton real estate market pass you by!
For more details, visit my thread on my message board. If you would like to see if you can qualify for this mortgage program, leave me a comment here or email me!
Lately, I’ve been getting some inquiries regarding the option of buying a house with no down payment. In reality, there are no more ‘zero down’ mortgage programs available. However, there is a program that exists that is very similar and that can help you purchase a property with no money as a down payment.
It’s called a free down payment mortgage, and essentially the bank offers to pay your 5% down payment on your behalf when you qualify for a 5 or 7 fixed year mortgage. What will you need to qualify?
- An employment record of at least 1 year at your current job
- A credit score of at least 640
The current rate for a 5 year fixed zero down payment mortgage is 5.50%.
If you’d like more information on this program or would like to apply for a pre-approval, you’re welcome to contact me here.
Take a look around. In the U.S., the housing market is crumbling leaving some desperate home owners throwing their keys back at lenders while others are deliberately burning their houses down. Up here in Canada, the real estate market is still going strong and with recent reductions in interest rates, what does this all mean?
If there isn’t a better time than now to get more educated about mortgages, lending practices, and borrowing strategies, I don’t know when that would be. Enter MortgageFit.com.
Let’s face it, finding answers to all your questions is sometimes pretty frustrating. Either you’re given the runaround or the person isn’t qualified enough to give you an adequate response. MortgageFit boasts the world’s largest mortgage community and is comprised of knowledgeable members who can give you free mortgage advice as well as free online quotes. If you have a question on a particular topic, ask away in their discussion forum and rest assured one of their thousands of members will come to your aid. Need answers fast? The site also provides a myriad of articles and references that you can browse at your own convenience, as well as online calculators that help you quantify your needs.
What I like most about this site is that it’s powered by people. Take a quick look through their message board and you’ll find a community alive with questions, stories, and friendly chatter. If you need quick answers on mortgages, credit issues, debt, and other financial issues, I recommend checking out MortgageFit.
So you’ve finally found the perfect home or condo in Brampton, and you’re eager to take the next step in buying it… until your real estate agent asks if you’ve been pre-approved yet. Wait a second, does pre-approved mean the same thing as pre-qualified? You’ve heard both terms and now you’re confused. Is there a difference?
Yes, there is!
When you first approach your bank or lending institution about arranging a mortgage for the purchase of a house, they will ask you some basic questions in order to assess your financial capacity. You’ll be asked to give approximate figures on how much money you make, what kind debts you have as well as assets you possess, and what sort of payments you are currently making. This is to get a rough idea of how much money you may be capable of borrowing for a mortgage. Based on these approximate figures you give, the bank will either tell you that you’re incapable of carrying a mortgage, or that you are indeed able to obtain a mortgage, meaning you are pre-qualified. This pre-qualification holds no value, as it is only a quick calculation based on the numbers that you’ve given.
What most people are interested in is if you’ve obtained a pre-approval yet. A pre-approval is only given after an official application is run through a lending institution and all your finances, as well as your credit, has been verified. This is the only way that you can be given an exact dollar amount of what you can spend on a house. It’s the pre-approval that is important!
Before you even start looking at buying a new home, it’s strongly recommended that you obtain a pre-approval first. A proper pre-approval will give you peace of mind, as well as let you know exactly how much you can afford. It would be a shame if you fell in love with a house and found out afterwards that you couldn’t afford it, so get that pre-approval first!
Hi Janette, Please check your email. Thanks! Lang
Hi lang, I have been renting since i arrived in canada less tha 2 years ago, since i started to work 3 months ago im seriously thingking of purchasing a house but my annuall income is only 26,000 unfortunately my childtax benifits (about 19,000) cannot be included when applying for a mortgage, i have a pretty good credit i believe, but does this mean i cannot buy a home until i get paid at least 20 per hour?