OT - Buying first home

[misslissa]

Hi all,

We are thinking of putting forward an offer for our first home. Any tips/advice??? Never done this before...

 

[FayeW]

Do you have a pre-approval for your mortgage? If you are dealing with your own bank, make sure they give you their best rate. I am a mortgage broker, and the best rates I have right now are 4.99% -5.09%, for a 5 yr fixed rate. Make sure that your offer is conditional on financing, (even if you already have a pre-approval because you will still need CMHC approval or an appraisal, depending on how much you are putting down). You should always get a home inspection (usually runs about $400.), and alot of the real estate agents I deal with are making the offer conditonal on you being able to get house insurance as well (since the insurers are being more particular lately).

I deal with all day long...if you have any specific questions, just ask!

 

[misslissa]

Thanks so much for the advice. We do have a preapproval but are making sure that the offer is conditional.

 

[drag n' fly]

Do you have a pre-approval for your mortgage? If you are dealing with your own bank, make sure they give you their best rate. I am a mortgage broker, and the best rates I have right now are 4.99% -5.09%, for a 5 yr fixed rate. Make sure that your offer is conditional on financing, (even if you already have a pre-approval because you will still need CMHC approval or an appraisal, depending on how much you are putting down). You should always get a home inspection (usually runs about $400.), and alot of the real estate agents I deal with are making the offer conditonal on you being able to get house insurance as well (since the insurers are being more particular lately).

I deal with all day long...if you have any specific questions, just ask!

You could not have summed it up better and get a mortgage broker (which you are) too we did and saved a bundle We each bought our own houses first and built the second together. There is a lot of talk about variable mortgages these days but I am too conservative for that in an Alberta economy...it cannot last forever. We got a fixed rate 10 year at 6% a little high but we liked the fact we did not have to renew in 5 years.

 

[webworm]

One word of advice I can give you is do not just look at the rate when you get your mortgage. Getting a great rate is important nut just like when you buy a car look at the options that you are getting as well.

- prepayment features (% lump sum each year you are allowed and is it cumulative or a one shot deal. Can it be made anytime during the mortgage anniversary year or only on the anniversary date?)

- payment increase - how much?

- is the mortgage portable to another property?

- can I break the mortgage early such as transfer it in middle of term or refinance it to take some equity out of property? There are mortgages in the marketplace that cannot be broken in the middle of the term unless you are selling your home

- if buying a new home make the offer conditional upon your lawyer reviewing the purchase agreement so you do not get suprised by closing costs a couple days prior to closing. Your lawyer can often go back to the builders lawyer and put a cap on those costs for you.

Good Luck!

 

[Best_Vacation_EVER!]

Definitely check your mortgage options through multiple sources (mortgage broker, bank, Credit unions, etc...) a lot of times you can get a better rate this way. If you can, go for the weekly/biweekly accelerated payment options as this will usually take about 5 years off your mortgage. As others have mentioned check all the terms (prepayment, early repayment, etc...) as they will differ a lot between lenders. We went for a 5 year fixed for our first mortgage as we knew there was lots of unknowns when buying that 1st house and having the security of knowing how much each payment would be for the next five years was really helpful to us.

We also went to our lawyer and had them review our contract (both houses we've bought we've done this) --- usually if you call the lawyer you are using for closing they'll include this consult in the price they quote for the purchase of the house.

As others have mentioned, a home inspector is an absolute must. Some inspectors will even photograph/video some of the things they see in some of the areas that may be hard to access. Definitely check the credentials of the home inspector as there isn't much regulation/standardisation of that industry.

Review the inclusions/exclusions if you're buying a resale. For the applicances that are being included in the purchase you may want to get the inspector to record the serial numbers as part of his report and be sure to give a copy to the sellers as well. One of my friends was burned this way -- the fridge and stove they saw while touring the house was replaced with inferior ones. Since the serial and model numbers were recorded by a third party (the inspectors) they were able to get some compensation.

Best wishes on your 1st home purchase.

 

[SherylR]

Hi all,

We are thinking of putting forward an offer for our first home. Any tips/advice??? Never done this before...

I cannot stress this enough!
Whether it's a brand new home or a 50 year old home, PLEASE hire a reputable inspector (not one recommended by the seller or seller's real estate agent) and have the home inspected from top to bottom before you seal the deal.
You'd be amazed at what they can find and what can cost you thousands of dollars down the road. Everything from a slight leak in the roof that you can't see, to cracked foundations, etc.
Seriously, before you invest on what is a good, solid home, get an inspection. It'll cost you around $350-$500 but worth every penny.
For example, we bought our house with an inspection. The inspector said the roof was good for another 15 years. Great! We had a bad hail storm the following summer and the insurance company covered the cost becuase we had the inspection to prove the roof was in good shape to begin with.
Also:
Look at land taxes
crime rates in the area (you can call the police department for that info)
schools
and of course, get a good mortgage broker. Never settle for street rates. There's always a better deal!!

 

[FayeW]

Definitely check your mortgage options through multiple sources (mortgage broker, bank, Credit unions, etc...) a lot of times you can get a better rate this way. If you can, go for the weekly/biweekly accelerated payment options as this will usually take about 5 years off your mortgage.

I just want to comment on a couple of the points you made. The accelerated weekly/biweekly payment certainly reduces your amortization, but the benefit you get varies with the interest rate. Right now, with interest rates hovering around the 5% range you would probably reduce your amortization by between 3.5 -4 yrs. When the interest rate is higher, you will see a bigger benefit.

As a mortgage broker, I caution against doing applications through multiple sources. Certainly, make the phone calls or research on the internet, but the whole purpose of a mortgage broker is to do "one stop shopping". Everytime you do an application there will be a credit check. Several (usually 3 or more) credit checks in a short period of time will lower your credit score, which could limit your options when it comes to mortgage lenders and influence the interest rate you are offered. A broker does one application and therefore only one credit check. I can send out the same application/credit report to dozens of lenders. The lenders offer us the best interest rates they have available, because we are paid a commission by the lenders for sending them business. If they don't offer us their best rates, we simple don't send them any business!

I have a client who is relocating with her employer. Her current mortgage is through her own bank (not my client at the time she took the mortgage). She has an interest rate of 6.75%, that she's had for a little over a year! Her lender, who has been her primary bank for 15 yrs rewarded her for loyalty by charging her posted rate instead of the discounted rate (which at the time should have been about 5.25%). I hope they at least gave her a kiss...