Many people ask this question, but often only hear one answer. People in North America generally think that it is much better to buy a house or condo rather than rent one—and they have good reason for thinking this. In most markets, home prices generally rise around 4% each year. So if you buy a home for $250,000 and put 5% down, you will invest $12,500 of your own money. If your home then goes up in value by 4% in one year, your home will have increased in
value by $10,000. That’s a return on your investment of 80% in one year!
Purchase price of your home and the minimum amount of down payment
- $500,000 or less – 5% of the purchase price.
- $500,001 to $999,999 – 5% of the first $500,000 of the purchase price, and 10% for the portion of the purchase price above $500,000.
- $1 million or more – 20% of the purchase price.
It is advisable to get a pre-approval before starting hunting for your home. A pre-approval will put you in a better place to close quickly in the house; it gives you a competitive edge over the next buyer. A pre-approval can make you appear like a serious buyer. Many times, transactions don’t go through because of finance.Taking the initiative to take care of that upfront will put you in a better position to win the offer, especially in a competitive seller market.
Many homebuyers make the mistake of obtaining a mortgage pre-approval only after they find the perfect home. Without one, home buyers will have a more challenging time finding a willing seller.
Besides, most professional real estate agents will not work with you without a pre-approval. A pre-approval gives you the confidence to go and find the home you can afford. You don’t want to disappoint yourself and your agent by finding a lovely home that you love and come to find out that you can’t afford it.
There are several things you can do to ensure your credit remains in good standing. The following are five steps you can follow: 1) Pay down credit cards. The number one way to increase your credit score is to pay down your credit cards, so they’re below 70% of your limits. Revolving credit like credit cards seems to have a more significant impact on credit scores than car loans, lines of credit, and so on. 2) Limit the use of credit cards. Racking up a large amount
and then paying it off in monthly instalments can hurt your credit score. If there’s a balance at the end of the month, this affects your score – credit formulas don’t take into account that you may have paid the balance off the next month. 3) Check credit limits. If your lender is slower at
reporting monthly transactions, this can significantly impact how other lenders view your file. Ensure everything’s up to date as old bills paid can come back to haunt you. Some financial institutions don’t even report your maximum limits. As such, the credit bureau is left only to use the balance that’s on hand. The problem is if you consistently charge the same amount each
month – say $1,000 to $1,500 – it may appear to the credit-scoring agencies that you’re regularly maxing out your cards. The best bet is to pay your balances down or off before your statement periods close. 4) Keep old cards. Older credit is better credit. If you stop using older credit cards, the issuers may stop updating your accounts. As such, the cards can lose their weight in the credit formula and, therefore, may not be as valuable – even though you have had the cards for a long time. Use these cards periodically and then pay them off. 5) Don’t let mistakes build up. Always dispute any errors or situations that may harm your score. If, for instance, a cell phone bill is incorrect and the comp.
The listing contract contains the terms under which the real estate agent will perform marketing and selling services and how much commission due upon the closing of a sale. The contract’s length can be three months, six months, a year, or any other period you choose. Agents often don’t like taking listings for less than a month because they don’t have enough time to market the house before the listing expires. A six-month listing is average.
While it is possible to do both transactions simultaneously, a homebuyer must first assess the pros and cons of proceeding this way
Buyers are allowed to back out from purchasing a home, but in some cases, the buyer might lose their earnest money deposit while the seller may have the right to sue to cover additional losses.
However, the severity of the consequences depends on whether you had contingencies in your offer that spell out situations when backing out without penalty is acceptable.
Most real estate agents make money through commissions—payments made directly to real estate brokers for services rendered in the sale or purchase of real property. A commission is usually a percentage of the property’s selling price, although it can be a flat fee.
Most of the time, homebuyers opt to use a Realtor to help guide them through one of life’s largest financial transactions. A real estate agent’s job is to match you with a home that fits your budget and lifestyle needs and help you navigate making an offer, negotiations, the home inspection and closing on your new place.
If you’re wondering whether you need a Realtor to buy a house, the answer is no.
The main difference is that a bank mortgage officer represents only the products their institution offers, while a mortgage broker is an intermediary who works with multiple lenders and is paid a referral fee by the lenders. Mortgage brokers are regulated in Ontario by the Financial Services Commission and require a licence.