If you are seriously thinking about purchasing a home in Burnaby, there are some things you should first know. Hopefully, this article will help you as you prepare to buy a home, especially if you are a first-time buyer.
Should you Fixate on a Purchase Price?
Searching for a home can lead to serious negotiations. Whereas the housing market can have high prices, keep in mind that going for a cheap house is not always a better option. The home may be cheap, but its taxes can be very high. You can end up spending more than purchasing an expensive one with lower taxes.
Something else you need to keep in mind is the location. Most houses are expensive depending on where they are located, so know exactly where you intend to live.
What Should a Realtor Offer?
It is important to choose a trusted real estate agent since they get a certain percentage of the sales price. Note that the seller pays the realtor and not the buyer. A realtor and a real estate agent should address all your concerns about home purchase and make the process simpler.
Ida Federico is a trusted expert in real estate. She will help you make a decision and walk you through the process of house purchase, including all the strategies needed for buying a home. You can be guaranteed that whether buying or selling a house, Ida will get the job done.
How Much Down Payment Can You Afford?
A down payment is the first payment when you buy a house on credit. In simple terms, it is a percentage of a total price. For instance, if you purchase a home for $150,000 and opt for 5% down, your down payment will be $7,500, and the mortgage $142,500.
What Mortgage Can You Afford?
House hunting can be tempting. Based on your preferred location, your decision may seem hard to make. Make sure you don’t spend more than the price range of house-related monthly costs.
When searching for your dream home, you should know that there are many documents for you to sign. The homeownership contract will need a lot of documentation, but you will know all rights reserved from your real estate agent. Some of the papers may include:
- Documents required when applying for a mortgage. Mortgage approval involves a lot of papers and other things. It is always good to prepare all these before you begin the entire home buying process.
- Tax Returns. You should keep in mind that your financial history will be analyzed. So be sure to request your tax returns documents for the IRS.
- Proof of Income and Credit Score. Purchasing a house can be risky at times. That’s why your income will have an impact on your credit score. Your source of income is set to help you find the perfect buying price for you and your home seller.
- Bank Statements. Some mortgage lenders and home sellers require a bank statement just to be sure you have enough money (usually equivalent to a few months of loan payments) in the event of an emergency.
- Credit History. If you have some unsettled bills on your credit report, the realtor must know and advise you on them. You should have settled these bills before deciding to buy a home. A copy of your credit score won’t be needed, but your lender will need verbal or written permission to access it.
How Does a Home Warranty Work?
Understanding what a home warranty covers and what it doesn’t is vital before buying a home. A house warranty is typically an agreement done on an annual basis, and it helps you with the costs of repair or replacement of the appliances or systems that broke down. It usually covers the main systems of the houses like water heaters, plumbing, and electrical.
What are the Closing Costs of Buying a House?
Before moving into your new home, there are “end” costs, such as home insurance, taxes, legal fees, moving expenses, and appraisal fees. It is essential to budget for these costs before you start the house buying process. You must be ready to pay all of the following last-minute costs:
- Mortgage application fee. Your lender may require a loan application fee. The application fee may be different depending on the lending institution.
- Mortgage Default Insurance. This kind of insurance applies to mortgage loans that are above 75% of the appraised house value. It ensures that the lending institution does not lose any money if you default and the value of your home is not enough to repay your loan.
- Legal fees. The handing over of homeownership from the seller to the buyer must be registered in the Land Title and Survey Authority Office to protect the buyer’s interests. The transfer process will probably need a lawyer or notary public to represent you. Of course, they will charge you for the service. Do not forget about the Land Title Registration fee.
- Life and disability mortgage insurance (optional). You may buy insurance to ensure that your mortgage is settled if you die or become disabled.
- Fire and liability insurance. The lending institution will request you to buy insurance which gives them an assurance that in case of fire, the mortgage lender will get the outstanding amount before you receive any insurance benefits.
- Goods and services tax. If you buy a newly built home, you may be required to pay GST on the buying price. There may be some current rebates based on the value of the house.
- Property transfer tax. You may be subject to property transfer tax imposed by the British Columbia Provincial Government.
- Property tax. If the seller has already paid property taxes to the municipality, you will have to refund the money.
- Appraisal fee. When the lender needs an appraisal of the house before getting approved, you are expected to pay the appraiser’s fee.
- Survey fee. Your lender may ask for a survey certificate. The survey formally shows the boundaries of the home and makes sure that all units are within those boundaries. The lender may ask for a monumental survey or location survey. If the current owner doesn’t have these certificates, you will be required to pay the surveyor’s fees.
- Other closing costs may include moving expenses, home inspection fees, household goods such as appliances, and redecorating or renovations costs.