First time home buyers? Advice?

[enis750]

On another note
We are not in a market today, where selling on your own is beneficial
YES, there are people who do it - but you are putting yourself at risk

BUT this topic isnt about selling a home, its about BUYING a home...so thats for another time

When buying a home, you dont pay a Realtor to find you a home
the sellers have negotiated a fee w the Realtor to sell their home and they split that fee w your Realtor
As well, you dont pay a Mortgage Broker for their services either. We get a referral fee from the lender we send the deal to. - again, NO fee to you
There have been instances (once in the past 24 months) where I had to charge a Broker fee. But it was a commercial deal and that specific lender wasnt going to pay me (private lender). So i negotiated the fee my w clients and they 100% knew about it and agreed to it - so there were no suprizes.

 

[give_it_all_]

enis750's Mortgage tip of the day

sorry for the long winded post again!! hahah!

Don't apologize! I'm learning quite a bit as I'm looking into getting a house as well soon. But my payments will be on $600k not $250, but $250 does sound much better

 

[Shortcut]

Along with all the other comments on home inspector's, if you are looking at something that is fairly new, ask for copies of all permits and inspections completed on the property, depending on where it is, there are issues you may need to know: private sewage systems, plumbing, gas, electrical, building permits/inspection reports. If not available when putting in an offer, once title changes hands and you prove you are the title holder, the municipality where you are looking should be able to provide all of this, and possibly a copy of the original approved blueprints. No matter what, ensure you get it inspected by a qualified company. Also ask for full disclosure on the property through your real estate agent. Have known people that have forgotten this, and even though a home inspection was completed prior to purchase, 2-3 months after moving in when the rain started in the spring, the roof was leaking. Don't take anything for granted, as this is one of the most important investments you may make. Take your time, find what suits your needs. Happy hunting!!

 

[enis750]

Don't apologize! I'm learning quite a bit as I'm looking into getting a house as well soon. But my payments will be on $600k not $250, but $250 does sound much better

haha!
thx man!

to everyone who is reading this as well

Im here to help lead you in the right direction and answer questions
Im not here to solicit my business (although I will gladly accept it! ha! :d )

ive been doing this over 7 years, educated and experienced
im not some run of the mill dude who's talkin out his arse.......at least about this stuff...now sleding is another story!! hahah!

and i can take critisicm (sp?) as good as the next guy

I like this topic...thanks to LUKE for starting it!!!

 

[enis750]

Along with all the other comments on home inspector's, if you are looking at something that is fairly new, ask for copies of all permits and inspections completed on the property, depending on where it is, there are issues you may need to know: private sewage systems, plumbing, gas, electrical, building permits/inspection reports. If not available when putting in an offer, once title changes hands and you prove you are the title holder, the municipality where you are looking should be able to provide all of this, and possibly a copy of the original approved blueprints. No matter what, ensure you get it inspected by a qualified company. Also ask for full disclosure on the property through your real estate agent.

This is called a PCDS - Property Condition Disclosure Statement (or PDCS..one of the 2!! haha) BUT YES< important

Have known people that have forgotten this, and even though a home inspection was completed prior to purchase, 2-3 months after moving in when the rain started in the spring, the roof was leaking. Don't take anything for granted, as this is one of the most important investments you may make. Take your time, find what suits your needs. Happy hunting!!

VERY VERY Good advice

 

[j335]

Thanks for all the advice and guidance guys! This is something that I've been brewing in my head for a little while. It isn't gonna happen overnight but I wanna have my ducks in a row when the time comes. How much is an acceptable down payment, percentage wise? I'm thinking sometime in the fall if things go right and according to plan.

Any realty site to view properties in Alberta? I've been to a few of them and they seem kind of vague? Maybe I'm not looking hard enough?

REALTOR.ca - Welcome

Most the realtors (if not all) have their properties on here

 

[RUDY]

don't forget about lawyer cost...Also i just heard on Monday that they expect prime to double ,currently 2.25% with 6-9 months.So that'll mean interest rates with shoot up alot.
Personally i like a fix rate,others like variable.I just like to have the same payment not hoping the rate stay lows

 

[Cyle]

Good info for sure! I am in the same position as you luke, 20 myself also and want to buy a house this summer, except i'm going to buy a lot and build it myself. One big thing is look at the time period you buy into. For example a house built in the 70's is most likely built better then the 80's as far as many things are concerned (however early 80's is good for the electrical wiring change). There was many time periods like 2006-2008 were a lot of crap was built that you don't want to buy.

A good home inspector is key, but there is so many things that can be covered up it is sickening. I have the benefit of working in construction for almost 5 years and building a house right now and the knowledge you gain is insane.

I don't know about the financial part (trying to learn myself) but I think the advise so far seems to be very good!

I don't mean to sidetrack your thread or anything, pretty much the same topic. Do brokers also work for building loans? Just looking into that, I know a lot of private lenders do them, but the interest rate is like 10%+ which is insane. I know it is completely different then a mortgage, but looking into options as I am looking at buying a lot this spring to build on.

Also, enis750 is your rate pretty much the same for everyone? Highly based on credit, down payment etc? I am trying to figure out what I would be looking at for a interest rate to determine how much of a mortgage I can afford, I know I want something small like 200k or less, but would be nice to know somewhat were I sit.

 

[enis750]

Good info for sure! I am in the same position as you luke, 20 myself also and want to buy a house this summer, except i'm going to buy a lot and build it myself. One big thing is look at the time period you buy into. For example a house built in the 70's is most likely built better then the 80's as far as many things are concerned (however early 80's is good for the electrical wiring change). There was many time periods like 2006-2008 were a lot of crap was built that you don't want to buy.

A good home inspector is key, but there is so many things that can be covered up it is sickening. I have the benefit of working in construction for almost 5 years and building a house right now and the knowledge you gain is insane.

I don't know about the financial part (trying to learn myself) but I think the advise so far seems to be very good!

I don't mean to sidetrack your thread or anything, pretty much the same topic. Do brokers also work for building loans?

Yes-if by bulding loans, you mean Construction financing
It breaks down to 3 types of builds

1. Self Build - you are your own GC (general contractor)
2. Builder Mortgage - lot and home purchased from a Builder and they build home for you. You cover the costs and expenses during the build, based on "draws" throughout the build - which you then pay to your builder. (well actually your lawyer pays, but you get the idea)
3. Completion Build - the builder has the lot and home design again, BUT - they carry the costs throughout the build. You dont pay him until the home is complete.

Just looking into that, I know a lot of private lenders do them, but the interest rate is like 10%+ which is insane. I know it is completely different then a mortgage, but looking into options as I am looking at buying a lot this spring to build on.

Depending on the type of build, home, location, zone etc.....but 95% of traditional Mortgage lenders will do a build for you.

Also, enis750 is your rate pretty much the same for everyone? Highly based on credit, down payment etc? I am trying to figure out what I would be looking at for a interest rate to determine how much of a mortgage I can afford, I know I want something small like 200k or less, but would be nice to know somewhat were I sit.

Yep - MOST lenders offer the same rate for all customers. SOME "B" type lenders (for not so good credit) wil bump the rates depending on the term, amoritization, credit etc. But typically speaking, as long as your considered an "A" client, everyone has the opportunity to get the same rate.

For more info as to where you may "sit" - PM or email me and we can chat about it (not on the open forums).

 

[enis750]

don't forget about lawyer cost...Also i just heard on Monday that they expect prime to double ,currently 2.25% with 6-9 months.So that'll mean interest rates with shoot up alot.
Personally i like a fix rate,others like variable.I just like to have the same payment not hoping the rate stay lows

Some economists are stating that we could see a significant increase in the PRIME lending rate by Q2 of this year (quarter two - which is June 2010)

YES rates are and WILL go up..to what?? who knows for sure

my opinion - we are going to see rates close to what they were approx. 2.5 yrs ago
PRIME around the 4.5% and 5 years fixed rates around the 5's or so
so buying now is a great idea, but be prepared for rates to increase

another opinion from me though

the variable rate will make a comeback
when you could get a fixed rate at 4.89%, you could get a variable at PRIME minus, YES MINUS 1.75%.....

when the BOC (bank of canada) dropped prime so much, all banks dropped the P - program
it is only now starting to make a return - but its still not good enough IMO
if you can get a 3-5 year fixed, UNDER 4% - take it and run

and I can still offer 3.79% on a 5 year fixed rate right now......best it was all last year was 3.69%
but it was for such a short period of time, I only locked in 6 clients - lucky them

 

[enis750]

What is a Rate lock & why is it important???

when you recieve your pre-approval you will recieve a rate lock with this

how it works:

typically, it guarantees your FIXED rate for 120 days (4 months)
each lender has different guidelines and rules with this
sometimes you will see a rate special, where the deal has to close in 30 days - so be sure you know the specs. behind the "rate" you signing up for.
if rates go up during this time, yours doesnt change
but if they go down - so does yours!

this ONLY applies for FIXED rate products, not credit lines or variable interest rates

Rate Specials:

some lenders will offer a rate special or "value Mortgage"
there are certain limitations w this Mortgage product

how they work:

most deals will have to close within a certain time period (usually 30 days)
you will have limited pre-payment options (being able to put extra money against the mtg)
certain terms will apply (only available on say a 2 or 4 or 5 year)

keep in mind - its not always about rate

if you want to be able to put extra $$ against your Mortgage during your term, a "value mortgage" may not be for you (because it limits how much you can put against it w/out penalty)
but it might be great for a first time homebuyer - BECAUSE

they probably wont have the extra $$ to put against it anyways
it also gives them a smaller rate, which equals a smaller payment
and it gets them into homeownership SOONER

its important to sign for the product that suits your needs BEST

i used to sell at Sportcheck, and PK (product knowledge) was super important
if your trying to sell a pair of high end GRAF's to a dude who plays shinny once a month.....your selling him a product that doesnt suit his needs
when all he really "needs" is a good pair of Bauer Supreme's!! haha!
unless of course his ego steps in and wants to spend the cash

ego's dont often come into play too often in the Mortgage world
wives , lenders and brokers help avoid this

 

[Cyle]

Yep - MOST lenders offer the same rate for all customers. SOME "B" type lenders (for not so good credit) wil bump the rates depending on the term, amoritization, credit etc. But typically speaking, as long as your considered an "A" client, everyone has the opportunity to get the same rate.

For more info as to where you may "sit" - PM or email me and we can chat about it (not on the open forums).

That is good to know, when I get closer I will PM you for sure! I was just worried about having to go private and paying like 10% interest while building. I am planning to do a lot of the work myself, and just hire out subtrades that are needed, I know the building part, the finances are just where I lack knowledge.

 

[Bogger]

On another note
We are not in a market today, where selling on your own is beneficial
YES, there are people who do it - but you are putting yourself at risk

BUT this topic isnt about selling a home, its about BUYING a home...so thats for another time

When buying a home, you dont pay a Realtor to find you a home
the sellers have negotiated a fee w the Realtor to sell their home and they split that fee w your Realtor

Agreed, I was just pointing out that not all properties are available thru a realtor.... Some people prefer not to use a realtor to sell therefore a realtor will not have access to show the property and it might be the one you want. We were down to 2 properties one being sold thru comfee and one with a realtor, the deciding factor was land size and location not slaes method.

Ian

 

[enis750]

Agreed, I was just pointing out that not all properties are available thru a realtor.... Some people prefer not to use a realtor to sell therefore a realtor will not have access to show the property and it might be the one you want. We were down to 2 properties one being sold thru comfee and one with a realtor, the deciding factor was land size and location not slaes method.

Ian

yes you are correct in this point
a fee MAY negotioable to your Realtor that you will pay, IF you have your heart set on the private sale home as well - just another option

but thank you for bringing up this point Bogger

 

[Luke The Drifter]

All good info guys. I'm trying to learn as much as I can from the financial side of it. I'm not a number cruncher/businessman by any means, so the more I learn and know, the better.

At the moment I need to start putting part of my wages away in a savings account for a down payment. I talked to my cousin on the phone last night (he just bought his first house last summer with his fiancee) and he told me to do the RSPs deal. He found its pretty useful and it helped him with his down payment for his house.

 

[Oldtrick]

I've dealt with the home horror issues many have commented on here,for over 17 yrs now and to add to some great points many have posted here, I would tell anyone that when they are looking for a home inspector, find out what they are trained in. Stay away from the "Ameri-spec" brands etc. Most went to a weekend class and their reports reflect that. ie: roof looks good but should be inspected by a qualified roofer. I kid you not. Their reports are canned crap, fill in the blank forms. If I've offended with that, TOO bad, get a carrer and quite ripping people off.

If you find a house you are really struck on, call a good Fire & Flood contractor and take them with you to identify basic water, mold and previous drywall repairs. You would be surprised

Second point, is buy "Title insurane", any item found to have been installed a/o built w/o permits or to code will be covered by this little $12 gem and I can tell you I've handed over $80K cheques on this one.

Good luck, sounds like you're doing your due dilligence on the subject.

 

[Bogger]

If you find a house you are really struck on, call a good Fire & Flood contractor and take them with you to identify basic water, mold and previous drywall repairs. You would be surprised

Second point, is buy "Title insurane", any item found to have been installed a/o built w/o permits or to code will be covered by this little $12 gem and I can tell you I've handed over $80K cheques on this one.

Good luck, sounds like you're doing your due dilligence on the subject.

RKnight is a flood/fire restoration guy, ....he could probably help you out or point you in the right direction.....

 

[albroker]

Just a comment on the person that is stating prime will double in 6 - 9 months, one thing to remember, prime goes up when the gov wants to slow the growth of the country down, I do not think one has to worry about the prime going up double in the next year given how weak the business is. One more thing to remember, when prime moves it usually moves up by .25% at a time as any more than that hits hard and really slows things down. Just one more thing to remember, if prime starts to go up and you on a variable rate mortgage you can call your lender and lock the rate in to a 5 yr fixed and when prime goes up that does not mean the fixed rates go up as the money comes from two different markets.

Just my two cents worth as a lic mortgage broker and lic realtor in Calgary

 

[enis750]

Just a comment on the person that is stating prime will double in 6 - 9 months, one thing to remember, prime goes up when the gov wants to slow the growth of the country down, I do not think one has to worry about the prime going up double in the next year given how weak the business is. One more thing to remember, when prime moves it usually moves up by .25% at a time as any more than that hits hard and really slows things down. Just one more thing to remember, if prime starts to go up and you on a variable rate mortgage you can call your lender and lock the rate in to a 5 yr fixed and when prime goes up that does not mean the fixed rates go up as the money comes from two different markets.

Just my two cents worth as a lic mortgage broker and lic realtor in Calgary

to add to your point.....

I dont think you were referring to me about prime doubling by June, because like you said - it wont.
will it go up? most definatly, along w fixed rates

one thing to keep in mind about locking in your variable rate

if you are on an OPEN variable, yes you can lock it in at any time, for what the remaining term rate is
SOME lenders will charge you a 3 month interest penalty on a CLOSED variable, to lock it in to a fixed
your Broker should be able to tell you if it is profitable for you to pay this penalty or not

hmmm...Mortgage Broker AND Realtor???? you must be a busy man, I couldnt do it :d

 

[CUSO]

All good info guys. I'm trying to learn as much as I can from the financial side of it. I'm not a number cruncher/businessman by any means, so the more I learn and know, the better.

At the moment I need to start putting part of my wages away in a savings account for a down payment. I talked to my cousin on the phone last night (he just bought his first house last summer with his fiancee) and he told me to do the RSPs deal. He found its pretty useful and it helped him with his down payment for his house.

Your best bet would be to put that dough in a Rsp, mutual fund right away. Like it was said before the tax, and interest free beni's will be worth it, and can be used towards your home.

Many banks are willing to renew mortgages mid term, so I think the future shows a slow interest climb. Get 'em while they are still low, because who knows what this summer might spark, house price wise.