Mortgage Process

Building Your Team

Take the stress out of buying your home by surrounding yourself with a team of experienced home-buying experts. 

Start by getting a pre-approved mortgage with your Mortgage Broker! This will provide you with an idea as to the house you may be able to afford when you start house hunting.

After finding that house, as a completely independent representative of all lending institutions, having a Mortgage Broker on your side can give you access to mortgages that are not readily advertised to you. Many individuals prefer to work with a broker regardless of their situation because it gets them access to most financial institutions with the best mortgage rates available plus a variety of mortgage products. In addition, some lenders work exclusively with mortgage brokers, meaning that you, the borrower, would have access to mortgages that would otherwise not be available to you.

It is not mandatory to use the services of a realtor when buying or selling real estate, but it is generally advisable to do so.

Having your own realtor ensures that you have someone on your team looking out for your best interests during negotiations.

Keep these tips in mind when choosing your realtor:

  • Ask friends and relatives for referrals
  • Be sure that you feel comfortable with the individual you choose – you may be spending a lot of time together
  • Look for someone with experience locating homes in your desired neighbourhood and price range
  • Make sure your realtor has a good understanding of your needs before you start house hunting

When the time comes to make an offer on a home, you will want to have your lawyer or notary review it. They will help to ensure that the offer includes all of the necessary information including, among other details, the following:

  • The proposed purchase price
  • A list of items (called chattels and fixtures) included in the sale
  • Any conditions you may need to protect yourself, such as subject-to-financing and/or home inspection clauses
  • The closing date for the sale of the property

A clean bill of health from a qualified home inspector can provide a great deal of comfort when buying a resale home.

A home inspection provides:

  • A detailed assessment of a home’s current mechanical and structural strengths and weaknesses
  • A list of potential repairs that may need to be made
  • A reasonable prediction about when repairs should be made

A good home inspection report can help you purchase a better-quality home and lead to greater enjoyment and satisfaction.

Closing Costs

Closing costs are the legal and administrative fees and disbursements associated with buying your home. Understanding each one will help you budget more accurately and lead to a more comfortable home-buying experience.

CMHC or SAGEN Insurance

A conventional mortgage is a loan for no more than 80% of the appraised value or purchase price of the property, whichever is less. The remaining amount required for a purchase (20%) comes from your resources and is referred to as the down payment. If you have to borrow more than 80% of the money you need, you will be applying for what is called a high-ratio mortgage.

Here is how it works:

You must have at least a 5% down payment when you buy a home (or you purchase with $0 down payment at posted rate (no rate discount) 5 year term only. Any purchase where the down payment is between 5% and 19.99% is considered a high-ratio mortgage, and the mortgage must be insured by the Canada Mortgage and Housing Corporation (CMHC) or SAGEN. The insurer will charge a fee for this insurance. The amount of the fee will depend on the amount you are borrowing and the percentage of your own down payment. Typical fees range from 2.80% to 4.00% of the principal amount of your mortgage. This amount can be paid up front or added to the principal portion of your mortgage. A Mortgage Broker can help you determine the exact amount.

Land Transfer Taxes

Most provinces levy a one-time tax when you buy a home (subject to change). The tax is based on a percentage of the purchase price of the property, and varies from province to province. In Ontario, for example, the rate is .5% on the first $55,000 of the purchase price, 1% on the next $195,000, 1.5% on the next $150,000 and 2% on the remainder.

Legal/Notary Fees

You should be represented by a lawyer or notary during the purchase and mortgaging of the property, and you are responsible for paying the lawyer’s or notary’s fees and disbursements.

Fire Insurance

You are required by the mortgage lender to have fire insurance effective at the time you legally take possession of your new home. Some insurance companies may demand proof of a home inspection or may not insure certain types of dwellings. Make sure that you enlist your insurance agent early.