Bonnyville Homes Blog

Before purchasing a home, it is prudent to look behind the deal as to the hidden costs which you are liable to pay. It will increase your total budget at the last minute. First, select a home of your liking and once you are satisfied with the location, cost, and structure of the house, then arrange for funding. The most common way of raising funds to purchase a house is by way of mortgage. The process of getting a loan sanctioned and disbursed is a long one as many formalities need to be fulfilled.

Be ready with all the documents to save time. The title deed should be changed first to enable you to get the loan. You will come across a variety of fee that you might have to pay. That is why it is necessary for you to keep yourself updated on what documents are needed and the various fees to be paid before you can apply to get a mortgage loan.

You should also understand the period of instalments and the rate of interest your loan carries. All this information along with the loan estimate will be made available to you by the financial institution within three working days on receipt of the loan application.

Let’s discuss some of the hidden costs.

Appraisal and Inspection Fee

Before any finance institution sanctions your application, they will need to assure themselves that the property is in good condition. They will look at the age of the house, its structural foundation, locality, market value and more. An independent third-party will appraise the house and send a report to the institution as to the feasibility of sanctioning the loan. A one-time fee will need to be paid for this service.

While the appraisal is usually an external team, the inspection is an internal one. The financial institution will send its team to inspect your home. They look at the home site and see that the structure of the house is sturdy.

Credit History

The financial institution analyzes credit history to identify any associated risks before sanctioning your loan. A good credit score helps you to get a low loan interest rate. While the fee for this is not very high, it is better you take everything into account.

Title Fee

When you purchase a home, the title of the property needs to be transferred to your name. This entails a fee to be paid to the lender.

Document or Processing Fees

Since creating the legal document is a time-consuming process, institutions charge a fee for the time they have spent on it.

HOA Fees

In certain communities, the institutions or banks charge association fees once you become the owner of the home. This varies depending on the locality.

Loan Origination Fees

This is the biggest fees you need to pay before the loan is disbursed. The lender charges 1% of the total loan amount. Insurance fees also need to be paid to the lender so that the lender is insured for the loan.

Property Tax

Finally, you have to take into account the property tax to be paid to the municipality when you become the owner of the house.

If you’re looking to buy or sell in the Bonnyville area, you need someone with the experience to find your next home! Get in touch with Gerry Storoschuk, Bonnyville Realtor® and find your dream home today!

When you plan to purchase a house, it involves a lot of running around to get the best of everything. There are many things you need to look for before a deal can be struck. The house you have your eye on needs to be financially within budget and as well as satisfy a range of requirements.

If you happen to be a first-time buyer, then one of the first things you would have to do is get a pre-approval from the lender. The lower the mortgage rate, the more the buyers waiting to purchase. In Canada, a real estate agent will guide you only if you have a pre-approval for a mortgage. This also raises your confidence that funds can be received immediately if a deal is struck.

Good credit scores help in getting easy pre-approval. So, keep your credit rating high, otherwise, you will not be able to get the pre-approval from a financial institution. Keep your down payment money of about 20% ready. If no down-payment is given, then you might have to pay more for getting CMHC’s mortgage default insurance.

The calculation of how much you must pay will depend on the mortgage amount and the down payment. The higher the down-payment, the lower the loan amount required. To increase your down-payment, you can borrow from RRSP. This will reduce your loan amount. First-time buyers can get some tax-free benefits.

DO’s

• Look for an estate agent: Get hold of a good agent on whom you can rely upon. Leave it to them for getting you a good house within your budget. The agent will help you with everything from inspection to getting credit and looking after the insurance.
• Check your budget: Get control over your budget and savings. Otherwise, things will get out of hand later. Always investigate your future capabilities before taking the decision of buying a house.
• Be frank: Always go with an open mind to see the house. Be realistic in your approach and ensure that you only visit the houses that fall within the range of your budget.

DON’Ts

• This may not be your first or the last home. So, don’t be too calculative for you are going to move some years later or at least let it out as an investment.
• Don’t be emotional: Don’t allow your head to be ruled by emotion. Think of the pros and cons and the resale value. If the location is nice, naturally, the resale value will be high. This should be one of your major concerns.
• Never go for big expenditure without getting a pre-approved mortgage. Your loan will depend on your income, savings, and credit ratings. So, it makes sense to save as much you can to avoid issues later.
• Closing costs: Always be careful about closing costs as it increases your loan amount significantly. The CMHC advises you to keep 1.5% to 4% of the cost as a backup. Apart from this, it is better if you can make provisions for emergencies as well. For instance, some repair work might need your immediate attention.

If you’re looking to buy your first home, look no further! Get in touch with Gerry Storoschuk, Bonnyville REALTOR® and find your dream home today.

The lending institution always sees your credit score or FICO scores to determine the loan amount and the rate of interest. A good score will enable you to get the funds with a lower rate of interest as there is less chance of not making regular EMI. If you are gearing up to buy a house, there are some considerations and factors that you must go through. Let’s take a look at what you need to consider.

Credit score: If you are looking for more money to cover the purchase of your house, you need a loan. The better the credit score you have, the easier it is to get the loan approved from the lending institutions.  Before applying for a mortgage loan, it is advisable to get your score boosted.

Budget:  Start saving and see that you do not spend more than 30% of your income on housing. If your savings are less than 20%, then you may have to go in for private mortgage insurance.

Good estate agent: Choose a reputable estate realtor who has many years of experience. They may help you with finding a good lender and inspection authorities.

Mortgage: Get a pre-qualification letter from the lender before you start searching for a house. The seller may insist on this letter as they may like to reassure themselves by knowing who is lending you the money.

Create time to look at the houses: If you have plans of buying a house soon, keep some time aside to visit the house when the agent calls you. The earlier you see the house, the better it is for you.

Signing the contract: Once you like a house, sit down for an agreement regarding the price. Once the purchase agreement document has been signed, it becomes a legally binding document. On signing, advance money will have to be paid, which is usually around 2% of the price of the house. If you fail to pay the balance, the advance would be forfeited. The agreement deed will contain many contingency clauses like the appraisal, inspection, and financing clause. These contingencies allow the buyer to back out later.

Home inspection: The buyer should check the inspectors’ credential as they are ones on whom you are relying on to ensure your investment is worth it.

Review the inspection report: See the report carefully as to the structure of the house, the roofs, HVA systems, and so on. Ensure that no detail has been blown out of proportion or vice versa.

Repair works: In case the house needs any repairs, talk to the seller and get it repaired as soon as possible. This would be at the cost of the seller. The lender might sometimes insist on getting the repair work done before giving the loan.

Final check: Have a checklist and go through it. Ensure all the repair work is done as spelt out by the inspection person. Once everything is in its place, have a meeting to conclude the deal.

If you’re looking to buy a house in the Bonnyville area, you’re in luck! Get in touch with Gerry Storoschuk, Bonnyville REALTOR® with Royal LePage Northern Lights