Frequently Asked Questions from First Time Buyers
The following are the most frequently asked questions by first time home buyers. If you have additional questions or need to discuss your individual situation, please send me your questions in the "Contact" section of my website or call me at (647) 207-8466 and I will respond to you promptly:
Q Why is it said that landlords get richer and renters don't?
A It is because landlords have taken the trouble of wisely investing in real estate and using their investment to generate income.
Q By renting, I do not have to do maintenance around the home and therefore have freedom of time. Is this not better than owning a home?
A By owning your home, you may or may not have to do the maintenance yourself, but, the main advantage is you have financial freedom when you own your own home (see explanation below). When you have financial freedom, you can engage people to do the maintenance in your home.
Q What do you mean by saying that by owning my own home I have financial freedom?
A I will respond with examples.
If you are paying a rent of $1200 per month today, you are loosing approx. $307 per month over a five year spread. [Based on an example of a $170,000 worth 2 bedroom, condo apt. with 5% down payment, monthly mortgage of $989 (@5.25% rate) gives you a mortgage balance of $147,930 after five years, thus arriving at a saving/equity of $307 per month]. At the end of ten years you have equity of $42,576 on the home you own. If you pay rent for ten years, you have zero equity.
Similarly last year, when the rate was approx. 4.45% you would have earned equity of approx. $338 per month in five years if you had bought a condo then.
Q How can I own a 3 bedroom detached home, if I am currently paying a rent of $1200?
A First of all, based on your income and that of your spouse, you may qualify for a 3 bedroom home sooner than later. In the event, this is not the case, you can always start small and once you build up your equity, you can always move to a bigger home. By continuing to pay rent, you are limiting yourself from taking the first baby step towards owning your own detached home.
Q Can I recover my mortgage payment by buying a home with a finished basement apartment and a separate entrance?
A You have to weigh all your options and make a decision on what is beneficial to you personally and your family. A free and frank discussion with your real estate agent will provide the answers you are seeking.
Q Is it true that mortgage rates are fluctuating? If so, when would it be a good time to buy?
A Recent news bulletins indicate that mortgage rates are falling. For how long this trend will continue has not been determined. However, if you are buying a property (condo, townhome, detached, semi-detached,) to be your primary residence, any time is a good time, since from the day you move to your own home, you are starting to build equity which will always have a positive result.
Q I have recently immigrated to Canada and do not have a job. Can I qualify to get a mortgage and buy a home?
A If you have completed your logistic formalities, i.e. obtained your SIN card, transferred funds from your previous location, etc., and have a sufficient down payment and meet the financial company's qualifications for a mortgage, you could get a mortgage. Discuss with your real estate agent and a mortgage specialist for specialized advice.
Q I am thinking of buying a home, but have a few more months on my lease. What should I do?
A You have several options depending on your specific situation. Call your real estate agent or call me and I will sit down with you and review your personal situation. The short answer is there is a way to assist you to move to your home and also meet your lease obligations.
Q Does having my own home help me to get a job faster or get approved for credit quicker?
A Not always. However, when completing various applications, sometimes there are questions asking whether you rent or own your home.
Q Can I run a business from my own home?
A In most cases, depending on the local regulations, the answer is "Yes". But, you need to determine that from the local municipality. However, very often, having your own home is conducive to having a home based business and your clients are not inconvenienced as they would be in a rental apartment. Further, you have ample space either in the basement or the garage to carry on a home based business.
Q I have never owned a condo or a home in Canada. Can you help me by providing me with detailed steps on the process and what formalities have to be completed and who does what?
A Yes. I can certainly do that. In fact, I have prepared a Home Buying Guide. Once you authorize me to find a home for you, I provide you with an in-depth plan which provides all the details and procedures involved, including using your RRSP's, lawyers, home inspection, etc.
Q I would like to buy a condo, but do not know whether I qualify to get a mortgage. Who can help me?
A I could help you. Please contact me for a personal discussion and I will give you the immediate information. I would also recommend that you contact a mortgage specialist to get you pre-approved.
Q What happens if I buy a condo or a home and a year later, I may loose my job, or for some reason I cannot afford to pay the mortgage?
A First of all, nobody can predict the future. Secondly, when dealing with a professional mortgage specialist, he/she will ensure that you are given the right advice with regard to the value of the home you can afford and the mortgage that you can pay. However, if due to circumstances beyond your control you are placed in a certain predicament; you are advised to consult your real estate agent and your mortgage specialist immediately, who collectively will try to find a solution. In an extreme case, it is possible that you could sell your condo/home and due to the equity that has built up, you may not incur a loss. Every situation is different and you need to consult the right people, when you have a problem. Remember, there is a solution to every problem. You have to find the right person to speak to.
Q Do I need the services of a REALTOR® when buying a condo or a home when in fact I can find properties on http://www.mls.ca/?
A That's a good question and many buyers had that thought as a first step. However, first things first. The information that is on the http://www.mls.ca/ website is not so fresh, since it is a "free" service. So, if one sees a listing for a condo or a home, invariably that information is old. So, when the licensed REALTOR® checks that info on the official MLS system, that condo may have been sold, or the listing may have expired. However, it is a good place to start researching information, but, it is not accurate. Further, following are some of the characteristics of a good real estate agent. Do you believe you could get a better deal on a condo/home without using this REALTOR®'s services?
The REALTOR®:
Endeavors to find the home that you want in the right neighborhood.
Takes the time and effort to make enquiries in the neighborhood to find out information about schools, shopping, etc.
Has concerns about your health, safety and security and therefore will provide you with your own Home Manual to guide you in getting the best out of your home.
Gets the best deal for you by research and negotiations. You offer the price that would enable you to purchase your home within a short time under the circumstances.
Works towards getting the seller to accept the price that is close to their expectations and is happy to do so thus creating a "win-win" situation for all.
Uses the advantage of a huge network and staff that support you through the rep. in sourcing for property that meets with your requirements.
Guides and assists you with important tips to save you time and money.
Works hard to find a seller who has the right home in the right neighborhood for you from the day you authorize the real estate to find you the right condo/home,. Finding that Seller is the key to the success.
Shows you the tasks that can be completed in advance to give you the peace of mind to make important decisions at the right time. For example, should you be worrying about offering the right price for your next home, when you can empower yourself in advance to negotiate a good deal with the prospective seller? Further, should you be worrying yourself about so many things that need to be done when sometimes you sell and buy simultaneously? For example if there was a house to buy at a competitive price and the other buyer had some information/knowledge which you do not have. Who do you think will be successful? You should be shown how to get that power with simple steps.
Empowers you to negotiate a better price than other buyers.
Saves you time and effort in providing you valuable information with regard to financing, home inspection, movers, legal assistance, etc. etc.
Finally, last, but not the least, you must ask your REALTOR® for your very own Home Manual.
