Do you want to leave the rental life behind and own a house?
Here are the few steps you might consider.
The first step towards buying a home is to get the mortgage approved. To help you work in this process you could choose to work with a mortgage broker or Bank. The broker may help you to find a better deal by making the right comparisons of Interest rates being offered by different lenders. He/she will also assist you to choose a product that would suit your needs and correspond to your situation. The documents you might need in order to process this are as follows :
The signed residential purchase contract your new property, Listing information sheet, Your lawyer
s or notarys contact information, Confirmation of employment & Paystubs origin of your down payment etc.
A minimum of 5% down payment is required to buy a single family home. The risk of default on the loan is covered by the insurers like Genworth or CMHC. On the other hand, if you pay equal to or above 20% down payment then you don’t need to pay insurance that covers the lender`s risk with respect to repayment of the loan.
There are also some other charges involved when buying a home. The buyers usually tend to forget about them. It varies from 1.5% to 4%. This may include transfer fees, Inspection fees, Lawyer or notary fees, 9% tax on mortgage insurance premiums and, if applicable the payment of school or municipal taxes etc.
Amortization and Interest rates
After finalizing the mortgage with the lender it’s time to decide upon the duration in which you would be able to pay back the loan. The maximum allowable period is 25 years and it could get lesser based on the method of payment chosen and rate of interest. There are two options to choose the rate of interest from; either Fixed or variable. A fixed rate is for a specified term which can be 1 to 5 years and interest rates remain same throughout. The variable rate is based on the bank of Canada`s prime rate less the discount being given by the money lender.
Your lender may require you to buy the home insurance. This saves you against legal liability arising from accidental injuries or property damages to another person. It also covers you for damages to your house due to specific reasons.
In case of Death or Disability
Chances of getting disabled for more than 3 months at the age of 25 are over 58% according to a survey. In case of death or critical illness, you don’t want the house to be a burden on your family. So in order to cover yourself for that, you may talk to an Insurance broker.
Munish Mehan is a licenced Insurance advisor and Realtor In the province of Alberta. If you need any assistance, please be in touch with us.www.Thesupervisa.com, 587 718 8001