Frequently Asked Questions

Frequently Asked Questions

I’m thinking about buying my first home. Where do I start?

The first step in buying your first home is to contact your bank and start the pre-approval process. Be prepared to be asked for proof of employment, tax return information, loans and liabilities, proof of a down payment, and personal information such as a SIN number. This is such an important starting point when looking for a home because without a bank pre-approval, you won’t be prepared to put in an offer when you find your dream home.



Can you buy a home without a down payment?

Although there are private lenders who offer mortgages with zero down this is not recommended as you would be put into the high ratio mortgage category. It is suggested to put down 20%. If you can swing it, do it. Your loan costs will be much less, you will get a better interest rate, and you will have less mortgage default insurance to worry about.



What is an amortization period?

This is the total number of years it will take you to pay off your mortgage loan. Most first-time buyers go for the longest amortization period offered. You should note however, if your down payment is less than 20%, your maximum amortization period can only be up to 25 years. With 20% or greater, you could have an amortization period of up to 30 years.



Do I have to pay my real estate agent commission?

When it comes to buying and selling a home, the seller of the property is responsible for paying the commission of the seller and buyer agent. The only time you will be charged by your agent as a buyer is if there is a gap in percentage owed from the seller.



Do I only need to save for the down payment?

NO! There are also a number of closing costs that you will need to think about. Some of these include property inspections, title insurance, a land survey, land transfer tax (LTT), legal fees, and home insurance. It’s suggested to set aside anywhere between 1.5-4% of the purchase price for these costs.



What should I be looking for in an investment property?

Location is the main consideration you should be looking at when buying an investment property. Whether you plan on doing a quick flip, or using it as an income property for the foreseeable future, it’s important to look at what is around the house as it will be tough to sell a beautiful home in an area that does not match. Do your research when it comes to projected desirable places in the city. Look into future developments that may help or hinder your home, and always remember not to jump into anything that does not feel right.

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