Mortgage Centre Toronto – Best Self Employed Home Business Investment Rate

Your choice of location depends primarily on where you work and whether you want to commute, and also on your family lifestyle ( ie. schools, public transportation, Hospital, Work). Urban living usually offers the largest range of home styles and is closer to amenities such as restaurants and theatres. On the other hand, you may get more for your money in the suburbs.

Take time to drive or walk around during the day & evening. It’s also a good idea to travel the route to and from your work.
Have property values risen or fallen in the neighbourhood?
Future development can also affect property values & taxes, so consider whether there are any changes to zoning proposed or any major developments planned, by contacting the local municipal office.
Some real estate representatives suggest that, if you’re considering the future resale value of your home, it’s wiser to buy a modest home in the best neighbourhood you can afford than the most expensive home in a modest neighbourhood.

New or Resale

New Home Advantages:

You may be able to upgrade or choose certain items such as siding, finish materials, flooring, cabinets, plumbing.
The latest building code, electrical and energy-efficiency standards will apply, and major systems are under warranty.

New Home Disadvantages:

Neighborhood amenities, like schools or shopping, may not be complete if the house is in a new development.
There may be construction noise and traffic & little to no landscaping or trees.
The 7% GST applies to new housing. However, there is a rebate, to a maximum of 2.5%, on homes which cost less than $450,000. In many cases, the Builder may incorporate the GST into their price, but make sure you find out.

Resale Home Advantages:

It will probably be in an established neighbourhood & landscaping is usually done and fencing installed.
It may have upgrades such as a built-in swimming pool or finished basement.
There is no GST unless the house has been renovated substantially, and then the tax is applied as if it were a new house.

New Home Disadvantages:

Maintenance costs will likely be higher than for a new house.
You may require a professional home inspector to check for structural or other problems, such as a leaky basement or faulty roof.
You may need to redecorate, or even renovate.

The Homeowner’s Inspection Checklist is a practical, will assist you in identifying symptoms, causes & cures to common problems.

The Home Features Checklist can help you.

Understanding Your Local Housing Market & Calculate Costs
What’s happening around you (house price trends, mortgage rate movements, new home construction)

In a buyer’s market, the number of homes available for sale exceeds the demand, so prices will either stabilize or drop. With fewer buyers and more homes, you not only have more options to choose from, you also have greater negotiating leverage. You have more time to look for the right home and you can evaluate the choices without feeling pressure to act too quickly.

At a glance, you can see how housing prices can fluctuate.

These figures apply in a single geographic market. Similar fluctuations appeared in other Canadian Centres at different levels.

Calculate Your Costs

The Down Payment (Homebuying Costs): A down payment of 25% or more, you may qualify for a conventional mortgage loan which does not require mortgage loan insurance. A minimum down payment of 5% is required for a high-ratio mortgage. These types of mortgage loans — for any amount in excess of 75% of the value of the home — are required to be insured against default. Your mortgage consultant will give you this info.

Don't forget the tax: The 7% GST applies to new housing. However, there is a rebate, to a maximum of 2.5%, if your home costs less than $450,000. There is no GST on resale housing unless the home has been substantially renovated.

Appraisal fee: If your loan is not insured, your lender may require a property appraisal at your expense. A basic appraisal for mortgage purposes will probably cost between $150–$250. Actual cost should be confirmed as it may vary with the location and complexity

Property taxes: Taxes are always a certainty. If you have a high-ratio mortgage, your lender may require that you have your property tax installments added to your mortgage payments.

Survey fee: Your lender will require an up-to-date survey. Ask the vendor to provide one as a condition of your Offer to Purchase, or you will have to pay to have one done.

Property insurance: This insurance covers the replacement value your home & its contents. This is mandatory by your lender.

Prepaid taxes/utility bills: You will have to reimburse the vendor the prorated portion of bills that have been prepaid beyond closing date.

Land transfer tax: This applies in most provinces. It varies as a percentage of the property's purchase price. It is usually about 1% – 4%.

Service charges: You'll be charged a fee to hook up new services and utilities, such as your telephone, at your new home.

Lawyer (notary) fees: A lawyer should review the Offer to Purchase, search the title, draw up mortgage documents and tend to the closing details. Lawyer's fees for a mortgage range widely depending on the complexity of the deal but will probably be at least $500.

Mortgage loan insurance premium and application fee: If you have a high-ratio mortgage, your lender will require mortgage loan insurance provided by CMHC or a private company. The insurance will cost between 0.5% and 3.75% of the amount of the total mortgage (additional charges may apply) and can be included in the mortgage. The application fee will range from $75 to $235 depending upon how the lender processes your application (consult your local lender for further details)

Moving costs: Don't forget the cost of a professional moving company or a rental truck if you move yourself. Fees for a professional mover can range from $50 – $100 an hour for a van and three movers.

Estoppel certificate: A certificate that outlines a condominium corporation's financial and legal state. The certificate and supporting documents will cost you up to $50. (Does not apply in Quebec.)

Condominium fees: Condominiums charge monthly fees for common-area maintenance, such as groundskeeping and carpet cleaning. Fees range widely depending on the type of structure but will probably be at least a few hundred dollars per month.

Home inspection fee: Inspectors are unregulated in many provinces, so fees range widely, from about $150 – $350 for a home priced under $300,000. Larger, more expensive homes cost more to inspect. A two-hour inspection carried out by an engineer who provides a written report will cost closer to the upper limit. Municipalities can also supply any available inspection reports on the property for a fee.

Renovation and repairs: A home inspection may indicate that the home needs major structural repairs such as a new roof. Don't forget to factor these costs into the price of the home.

Possible Extra Costs After You Move In

Maintenance costs
You may want to start a separate maintenance fund — particularly if you're buying an older home — by setting aside $500 – $1,000 and adding to it regularly. This reserve can be used to cover the costs of anticipated or unexpected repairs.

Renovation costs
You may find a "fixer-upper" — an inexpensive home in need of repair. One general rule is that renovation always takes longer than, and costs more than, you think.

Make sure you don't leave yourself house poor. It's important to structure your monthly expenses so that you can still afford simple luxuries, like the occasional vacation.

How Much Can You Afford?

Use the table below and the Affordability Worksheet, to get an idea of the maximum home price you can afford and the maximum you can afford to pay in monthly housing costs.

The first affordability rule is that your monthly housing costs shouldn't be more than 32% of your gross monthly income. Housing costs include monthly mortgage principal and interest, taxes and heating expenses… known as P.I.T.H. for short. If applicable, this sum also includes half of monthly condominium fees and all of the annual site lease in the case of leasehold tenure. Lenders add up these housing costs to determine what percentage they are of your gross monthly income. This figure is your Gross Debt Service (GDS) ratio.

Use this Gross Debt Service Worksheet to get an estimate of your situation.

The second affordability rule is that your entire monthly debt load shouldn't be more than 40% of your gross monthly income. This includes housing costs and other debts such as car loans and credit card payments. Lenders add up these debts to determine what percentage they are of your gross monthly income. This figure is your Total Debt Service (TDS) ratio. Do your own Total Debt Service calculation. Based on these ratios, lenders will advise you of the maximum home price they think you can afford.

Keep in mind that most homebuyers today keep their debt ratios comfortably below the maximums prescribed above. The lower your debt load, the more affordable your home and lifestyle will be.

Income, home price and down payment guide
Household income	5% down payment	Maximum home price	10% down payment	Maximum home price	25% down payment	Maximum home price
$25,000	$3,000	$60,000	$6,300	$63,000	$18,900	$75,600
$30,000	$3,900	$78,000	$8,200	$82,000	$24,700	$98,800
$35,000	$4,800	$96,000	$10,100	$101,000	$30,300	$121,200
$40,000	$5,700	$114,000	$12,000	$120,000	$36,000	$144,000
$45,000	$6,600	$132,000	$13,900	$139,000	$41,700	$166,800
$50,000	$7,500	$150,000	$15,800	$158,000	$47,400	$189,600
$60,000	$9,300	$186,000	$19,600	$196,000	$58,800	$235,200
$70,000	$11,050	$221,000	$23,400	$234,000	$70,100	$280,400
$80,000	$12,500	$250,000	$27,200	$272,000	$81,500	$326,000
$90,000	$12,500	$250,000	$31,000	$310,000	$92,800	$371,200
$100,000	$12,500	$250,000	$34,800	$348,000	$104,300	$417,200
Figures are rounded to the nearest $100

This table gives you an idea of the maximum home price you can afford. These estimates take into account household income and the percentage down payment you have. They assume a mortgage interest rate of 8%, average tax and heating costs in Canada, and the mortgage an average Canadian would qualify for based on a 32% debt service ratio. Please note that for loans greater than 90% of the value of the home, a maximum house price of up to $250,000 may apply, based upon the price levels in your community. Contact your lender for the maximum price in your area.

Choosing Your Team
There are a lot of people involved when you buy a home. Here's a guide to who they are and what they do. We provide work sheets to help you choose the right people to meet your home buying needs.

Select Your Realtor

This is probably the most important step in the process. You will, for all intents and purposes, be in partnership with your agent/s. You will be confiding in them on a business level and often on a personal level. They will be the people dealing with any problems that crop up along the way. They are the key to your finding what you want in the area you want for the price you want. Be selective, look for someone you feel comfortable with and with whom you're experienced and knowledgeable. Working with a duo instead of an individual agent has its benefits, the most important being that time off for the agent does not become a problem for you. Don't be afraid to ask for references; most agents are used to this and will not object. Once you select someone you feel good about working with, sign them up as a buyers' agent. It is very important that the person you're working with is representing you exclusively. Make sure your real estate representative keeps a copy of your list to help pre-screen the houses you’ll look at. This list should be revised as you look at houses and see what is actually available in your price range and preferred locations.

Home Buyer's Consultation
Also a very important step in the process, this is when you and your agent prepare each other for exactly what to expect along the way. The following points should be covered and fully understood during this meeting:

Exactly what your needs are (number of bedrooms, baths, etc.), in which areas you're looking, what price range you are comfortable with, and what your time line is. It takes generally takes 30 to 45 days from contract to settlement.
How often you are available to look and what you expect from your agent in terms of availability and communication (e-mail, phone updates either daily or weekly).
Your agent should explain financing options and give you references they should explain the difference between the various loan programs available and anything else that you might be confused about.
Your agent should give you copies of all the paperwork you will be expected to sign throughout the process and briefly explain what each form is for.
Your agent should explain buyer brokerage vs. seller's representation, and you should sign a buyer broker agreement.

Select Your Mortgage Professional

Most people, when selecting a lender, call various lending institutions to check on rates and generally go with the lender with the lowest rates. We strongly recommend that you go to a mortgage consultant and have them find you the lender that best suits your needs and provides you with the best rate.

CMHC Mortgage Loan Insurance (IF APPLICABLE)
Don't let a down payment come between you and your home. Find out how you could qualify to buy your home with as little as 5% down with help from CMHC.

You may also want to get a pre-approval so that you know that you have more confidence to put an offer on a home. Please note that a pre-approval is only based upon your credit and what your declarations. If your declarations are backed up by documentation (ie income verification), your pre-approval may become invalid. This is why a Mortgage Professional will be able help through this process.

Select Your Lawyer

If you do not have an attorney already then your mortgage consultant can help you find one that specializes in real estate transactions at a very reasonable price. Please note that there are closing cost packages that will guarantee a maximum price on closing costs. this information can be provided to you free of cost.

The Buying Process
Look at homes
This is the fun part. It is important to limit the number of homes you're looking at in a day. If you look at too many homes, they begin to run together, and you can't remember one from another. It's a good idea to use a checklist form to help you track the properties you have seen. It is also helpful to actually begin to narrow down the properties after each visit. For example, if house #3 was better than house #2, immediately eliminate house #2. Remember, communication with your agent is crucial. It's important to let your agent know which houses you like and why, as well as which houses you don't like and why. Sometimes it takes going out and looking one time before you and your agent really have a good grip on exactly what you're looking for. Call your agent, and have him/her do the research on any advertised properties that look interesting to you. That's what agents get paid for If you should become interested in a for-sale-by- owner, ask your agent to contact the seller before you do, to see if he/she will cooperate (pay a commission) with a buyers' agent.

Select a home
Once you've narrowed your search down to one or two homes that you really like, your agent will do whatever research necessary to help you make your decision, but the decision will ultimately be yours. And surprisingly enough, it's going to be a pretty easy decision to make Buyers are welcome to call the local chambers of commerce for any statistics in which they might be interested. Local zoning and planning offices are a good source for future road plans, etc. Once you've selected one home to focus on, your agents will do a comparative market analysis on that property. This involves determining "fair market value" by looking at what other buyers were willing to pay for properties similar to yours in the same neighbourhood or area.

Making an Offer & Negotiation
When making an offer on a property, it is important to decide ahead of time how much you are willing to pay at what terms for the house. You already know what fair market value is. Now you have to decide what price you will offer; how much deposit you will offer; what personal property you wish to have convey (everything is negotiable); when you plan to close; and what inspections you plan to have conducted.

When negotiating with any seller, it's best to remember not to take anything personally. Also, try to put yourself in the seller's shoes. Figure out what's not negotiable to you, and be willing to give a little on the things that are negotiable. A good agent should be able to give you tons of advice about how to structure your offer. Once your offer has been presented, the seller will either accept your offer outright, reject your offer outright, or counter your offer. The counter process can go back and forth many times. It's important for all parties to keep their cool and focus on the goal.

Get Inspections & Remove Contingencies
If, as part of your offer, you asked for time to be allowed to have inspections conducted on the property, you should have written what is called a contingent offer. Offers can be contingent upon loan approval, inspections, the receipt of acceptable homeowners or condo association disclosure packets, the sale of property, and many other conditions. It is important that all deadlines be met and that all contingencies are removed exactly the way the contract describes. Your agents are responsible for making sure this is done correctly.

Walk-Through

Most sales contracts will give the buyer the right to one pre-settlement inspection. This is your last chance to find any problems and have the seller correct them. Read the contract carefully, but most contracts read that all electrical systems, plumbing, appliances, heating, and air conditioning need to be in working order at the time of settlement. These are the items you checking for at walk-through.

You are also checking for any other items the seller previously agreed to fix or replace. If anything is found to be defective or missing, you have several options: The seller can remedy the problem prior to settlement; the seller can credit you the amount of money it would take to hire someone to remedy the problem; or the seller can promise to correct the problem and place into escrow with the attorney the amount of money you will need to pay someone else if the seller does not perform as promised.

On new-home purchases, the process is a little different. The builder will generally do a walk-through with you approximately one to two weeks prior to settlement, resulting in a "punch-out list." Hopefully, they will get everything on the punch-out list completed prior to settlement. If not, most new-home contracts allow the builder to complete whatever minor items have been noted in a "reasonable" period of time.

Closing the Deal and Moving
There are many small steps when it's time to close the deal. Here's information to help make sure nothing falls through the cracks.

Closing on your home
This is the day you "sign your life away," as most clients say. Not really. You will be signing all of the loan documentation, which can seem never-ending. The lawyer conducting the settlement should be able to explain every document to you in a satisfactory manner. Do not ever feel intimidated. If you don't understand, don't sign. Your lawyer will help your understand everything. If you like, you can request blank copies of the documents you will be signing in advance so that you can carefully review them. You will have to present whatever down payment and closing-cost funds you were expected to pay. This check must be certified; personal check usually are not accepted.

Moving In

This is the last and probably the hardest step in the home-buying process. A little bit of planning and forethought, though, will make for a much smoother move. You will want to make arrangements with a moving company as soon as you can. Call at least two in order to get competitive quotes. They will usually ask to come to your home to get an idea of how much they will be moving and the distance they will need to travel. Be sure to change your address with the post office, your banks, and any creditors at least 30 days in advance. To avoid late payments, it's a good idea to actually call and verify receipt of the address change whenever possible. Call to order your utility hook-ups approximately 10 days prior to your move. Be aware that some utility companies will keep you on the phone for a long time.