Q – What’s the minimum down payment required to purchase a house?
Typically down payments range from 5%-20% of the purchase price of a home – in Canada you’re required to put down a minimum of 5% (note that if you’re self-employed you’ll likely be required to put down a minimum of 20-25% so if you make sure to talk to your bank or mortgage broker to determine your minimum down payment).
Q – When should I get pre-approved for a mortgage?
When it comes to home buying questions, ideally you should have a mortgage pre- approval in place before you start your home search. Determining your financial state before you start your search saves you time and streamlines your action plan. By taking preemptive measures, you’ll know exactly how much you’re qualified to borrow and at what rate – creating a realistic dream!
Q – What should my offer look like?
We will strategize with you on the key components of the offer: Price, closing date, deposit, any conditions or special terms.
Q – What are conditions?
Conditions are inserted into an offer to allow a buyer to do their due diligence on a certain topic before an agreement of purchase and sale becomes firm. Typical conditions are home inspection, financing, sale of the purchasers home and condominium document review – if you’re purchasing a condo!
Q – Why is a deposit needed when I make an offer?
The deposit is either provided to the listing brokerage immediately upon offer acceptance, or within a few business days after acceptance. If you are in competition for a property, a higher deposit can carry more weight from the seller’s perspective. This is supplied by bank draft or certified check, depending on what is stipulated in the offer. The deposit is held in trust with the listing brokerage and that deposit is put towards your purchase price at closing.
Q – What closing costs can I expect?
There are several costs you can expect in addition to the price of your home. Costs to buy a home are generally broken up into two categories: Pre-Purchase Costs and Closing Costs.
Your Pre-Purchase Costs are made up of the Deposit on your chosen property and your Home Inspection costs (this could be anywhere from $400 – $600).
Closing costs associated with purchasing a home include tax and utility adjustments, mortgage discharge fees, and legal fees, etc., and costs to physically move. Of course, don’t forget about your mortgage! The balance of the purchase price less your original Deposit (and remaining down payment if applicable) is due on closing – typically the bulk of this comes from your lender and is your mortgage.
Q – Do I need a home inspection when I buy a home?
Every buyer should have a home inspection done before purchasing a property. This will help ensure that there are no surprises once you’ve moved into your new home. In some cases the seller may have prepared a pre-listing inspection to save buyers the time and money of doing their own inspections. Although these pre-listing inspections have their advantages nothing will take the place of doing your own inspection with the inspector of your choice.