Having a pre-approved mortgage provides you with the confidence of knowing your exact budget for buying a home even before you begin your search. Additionally, it offers protection against potential interest rate hikes while you are on the lookout for your new property. In the competitive Ottawa market, including a financing condition in your offer can prove challenging.
Your dedicated Mortgage Specialist will be there to address your inquiries and assist you in selecting the financing terms and options that best suit your needs. Many individuals opt to approach their own bank for mortgage pre-approval and subsequent mortgage arrangements due to their existing financial relationship. However, a mortgage broker takes a different approach by exploring your mortgage qualifications with multiple banks and credit unions to secure the most favorable rate, which might sometimes surpass the rate offered by your bank. Exploring both options is generally advisable before reaching a final decision.
Here are some common closing costs that we recommend you prepare for in advance:
Legal Fees & Disbursements:
When closing on a property, you'll need to cover legal fees and disbursements associated with the legal process.
Title insurance costs vary based on the property's value and location. It provides compensation to the Buyer in case of negative impacts resulting from title defects, but it does not resolve title problems.
Land Transfer Tax:
The amount of land transfer tax you pay on closing depends on the purchase price of the property. First-time Buyers may be eligible for rebates under provincial or municipal schemes.
Property Tax, Utility, and Condo Maintenance Fee Adjustments:
Buyers are required to reimburse the Sellers for any prepaid property taxes, utilities, and condo fees up to the closing date. These adjustments will be handled by your lawyer and reflected in the Statement of Adjustments.
CMHC Insurance Premium:
If you make a down payment of less than 20%, you'll need to pay a CMHC insurance premium. The premium amount can be determined using the CMHC Insurance Calculator and is an additional cost to consider.
Purchasing a home is a significant investment decision that can greatly impact your life. To ensure that your investment is secure and well-founded, it is highly advisable to seek the services of a qualified home inspection company.
A thorough home inspection will assess the structural and mechanical integrity of the property, giving you a comprehensive understanding of its condition. The home inspector will identify any existing issues and potential problem areas, offering practical and cost-effective solutions. You will also receive estimated costs for any necessary repairs or improvements. Typically, a detailed report summarizing the inspection findings will be provided to you shortly after the inspection is completed.
By opting for a home inspection before finalizing the purchase, you are safeguarding yourself and your investment, while also gaining peace of mind. Home inspection costs may vary based on factors such as the size, age, and location of the property. Your real estate agent can often provide you with a list of reputable and trusted home inspectors to choose from. This prudent step can save you from unexpected expenses and ensure you are making an informed decision about the property you intend to purchase.
Once you have chosen your ideal area for buying a property, it's essential to seek advice on determining the best streets within that neighborhood. Factors such as the presence of underground rivers, the property's elevation, and whether it is prone to water-related issues should be considered. All neighborhoods typically have streets categorized as A, B, and C streets, each with its own characteristics and desirability.
Several factors contribute to the quality of a street, including lot sizes, ongoing development, water drainage, school districts, and overall location. It's crucial to keep the big picture in mind and not get carried away by the excitement of the moment. Common sense should guide your decision-making process to ensure a well-informed choice.
If your intention is to buy land for building a home, it is highly advisable to invest in properties situated on the best streets. Remember that the cost of construction materials like bricks and mortar remains the same, regardless of whether it's a good or bad location. By opting for a prime location, you are more likely to secure a higher return on your investment in the long run. Prioritizing the quality of the street and location is a smart approach that can positively impact your investment's value and potential for growth.
When the time comes to make an offer on a property, we, as real estate professionals, will provide you with up-to-date market information and assist you in preparing the offer. Our goal is to include specific clauses that offer added protection for our buyers. The key components of the offer will encompass the price you're willing to pay, the deposit you'll put down, the terms and conditions of the agreement, any inclusions or exclusions you want to specify, and the desired closing date.
Once you have carefully reviewed and signed the offer, we will act on your behalf and present the Offer to Purchase to the seller. At this point, the seller has the option to accept the offer, reject it outright, or present a counter-offer. The counter-offer may involve adjustments to the price, closing date, or other terms based on negotiations. This process of offers and counter-offers can go back and forth until both parties reach an agreement or until one party decides to end the negotiations.
Having a skilled and capable agent is crucial during this phase, as negotiation plays a significant role in the home-buying process. Our expertise allows us to negotiate on your behalf, ensuring your interests are well-represented and that you secure the best possible terms for the purchase of your new home.
In the Ottawa real estate market, it has become customary for a 5% deposit to be considered standard for a successful purchase. Once your offer is accepted, you will need to provide this deposit to the listing brokerage either immediately or within 24 hours after acceptance. This can be done through a bank draft or a wire transfer.
In competitive situations where multiple buyers are interested in the same property, offering a deposit greater than the standard 5% can carry substantial weight with the sellers. A larger deposit provides the sellers with added assurance that the deal will close successfully, and they may be more inclined to favor an offer with a higher deposit when all other terms are equal.
It's important to note that when you are making an offer on a property with a longer closing period, sellers typically expect a minimum 10% deposit. This higher deposit amount is requested as the longer closing period can make sellers more cautious about securing the deal.
In summary, offering a deposit that exceeds the standard 5% can give you a competitive advantage in a hot market, and it demonstrates your commitment to completing the purchase. However, it's essential to consider the specific circumstances of each property and consult with your real estate agent to determine the most suitable deposit amount for your offer.
When faced with multiple offers on a property, it's crucial to have a clear understanding of the value you are willing to pay for the home. While we will provide you with information on comparable homes that have sold, determining your offer's value goes beyond just looking at recent sales. Your emotional connection to the property also plays a significant role. If you truly love the home and would be disappointed not to get it, you might need to consider offering more than the market value. However, it's essential to strike a balance and consider how long you plan to live in the house. If you envision staying for a significant period, the extra amount paid in the short term may not matter as much if it fulfills your long-term desires for the perfect home, area, and schools.
When obtaining a mortgage, it is essential to consider various insurance options to protect yourself and your family. Here are some important types of insurance to consider:
Mortgage Life Insurance (MLI): MLI is a cost-effective life insurance coverage that ensures your outstanding mortgage will be paid off in the event of your death. The premiums are based on your age and mortgage amount and are added to your mortgage payment, simplifying the process. It's a crucial consideration, especially if you have a young family, as it protects your loved ones from the burden of the mortgage should anything happen to you. Joint coverage for spouses is also available.
Disability Insurance: If your mortgage payments depend on your income, disability insurance becomes crucial. This type of insurance provides replacement income in case an accident or illness prevents you from working, ensuring you can continue meeting your mortgage obligations during difficult times.
Job Loss Mortgage Insurance: This insurance covers your mortgage payments in the event of involuntary job loss. It has gained popularity in recent years as it provides peace of mind and financial security during periods of unemployment.
When considering insurance options, it's essential to assess your individual circumstances, financial needs, and risk tolerance. Working with a qualified insurance professional can help you choose the most suitable coverage for your situation and ensure that you and your home are adequately protected.