Your First Home

Buying Your First Home: whether a condominium, townhouse, single family dwelling, or other type of abode, is often the single largest purchase in a person's life. But just how confident do you feel that you know what you're getting into? When you're looking to buy your first home, who can you trust? Brokers, bankers, realtors ... everyone's biased in their own way. How do you understand what you should look for in these professionals, and what you can or should do yourself? How do you understand how much a mortgage will actually cost, how it works, and how to pay it off quickly? Why do you need a notary or a lawyer? Is mortgage insurance worth it? This multitude of questions can be overwhelming for first-time purchasers, even for people who've purchased property in the past. Your First Home: A Buyer's Kit alleviates some of the stress of buying a home by explaining what you need to know about buying your first (or second) place.

Buying Your First Home: whether a condominium, townhouse, single family dwelling, or other type of abode, is often the single largest purchase in a person’s life. But just how confident do you feel that you know what you’re getting into? When you're looking to buy your first home, who can you trust? Brokers, bankers, realtors ... everyone's biased in their own way. How do you understand what you should look for in these professionals, and what you can or should do yourself? How do you understand how much a mortgage will actually cost, how it works, and how to pay it off quickly? Why do you need a notary or a lawyer? Is mortgage insurance worth it? This multitude of questions can be overwhelming for first-time purchasers, even for people who’ve purchased property in the past. Your First Home: A Buyer’s Kit alleviates some of the stress of buying a home by explaining what you need to know about buying your first (or second) place.

Introduction xv1 Renting versus Home Ownership: Do the Math 11. Renting Is Paying Someone Else’s Mortgage 22. Build Your Own Equity 23. Creating Your Home Buyer Plan 32 Mortgage: How Much Can You Afford? 71. U nderstanding Mortgage Products 81.1 Conventional mortgage 81.2 High-ratio mortgage 91.3 Second mortgage 91.4 Vendor Take Back (VTB) 101.5 Builder’s mortgage 101.6 Closed mortgage 101.7 Open mortgage 111.8 Fixed rate mortgage 111.9 Variable or adjustable rate mortgage 121.10 Convertible mortgage 132. Getting Pre-Approved for a Mortgage 132.1 Obtain your credit report 142.2 U nderstanding the difference between pre-qualifyand pre-approval 162.3 Determine how much you can spend on a home 183. How to Shop for a Mortgage and Get the Best Deal 213.1 U sing the services of a mortgage broker 233.2 Mortgage term and interest rates 244. Plan Your Budget 253 Eliminate Your Mortgage Fast 291. Principal versus Interest 292. How to Pay off Your Mortgage Quickly 303. Your Mortgage Term 32vi Your First Home: A Buyer’s Kit4. Begin with a Starter Home 355. Pay off Your Mortgage Faster 354 Government Programs 471. The 5 Percent Down Payment Program 472. Home Buyers’ Plan 512.1 How to withdraw and repay your RRSP funds 533. Moving Expenses 554. Land Transfer Tax Programs 554.1 Ontario land transfer tax rebate 564.2 British Columbia property transfer tax exemption 584.3 Prince Edward Island first-time buyerland transfer tax rebate 595. First-Time Home Buyers’ Tax Credit (HBTC) 606. Green Home Program 617. New Immigrant and Self-Employed Program 625 Deciding What to Buy 651. Buying a Newly Built Home 651.1 Functionally modern layout, features, and currenttechnology 661.2 Green standards 671.3 New home warranties 671.3a Ontario’s Tarion Warranty Corporation 681.3b British Columbia New Home Warranty 691.3c A lberta New Home Warranty Program 691.3d Québec 701.3e A tlantic Home Warranty 701.4 Long closing 701.5 Harmonized Sales Tax (HST) and Goods andServices Tax (GST) 711.6 New home builder’s agreement of purchaseand sale 712. Buying a Resale Home 732.1 Home warranty on a resale home 74Contents vii2.2 The resale agreement of purchase andsale contract 753. Freeholds and Condominiums 756 Understanding the Relationship between Youand Your Real Estate Broker 791. U nderstanding What Your Real Estate Agent Does 791.1 Tasks of a real estate broker 801.1a Determining your plan 801.1b Financing plan 801.1c Researching properties to view 801.1d Booking showing appointments 811.1e Discussing the viewed homes 811.1f Completing the agreement of purchaseand sale 811.1g Connecting you to other relevantprofessionals 811.2 How to find a real estate broker 821.2a Interviewing real estate brokers 822. Who Is Working for You? 832.1 Buyer representation 842.2 Seller representation 852.3 Multiple representation 852.4 Customer service 853. Individual Identification Record 867 The Search for Your New Home 871. Make a List of What You Want and Don’t Want 872. The Different Types of Homes 883. The Search Is On! 893.1 Do a search 893.2 Viewing properties 913.3 How long will it take to find a home? 923.4 Market data 95viii Your First Home: A Buyer’s Kit4. What Type of Economic Market Cycle Is the RealEstate Market Experiencing? 954.1 Seller’s market 964.2 Buyer’s market 964.3 Balanced market 964.4 What type of marketplace are you currentlyexperiencing? 974.5 Seasonal cycles 978 The Agreement of Purchase and Sale 991. What Is Included in an Agreement of Purchaseand Sale 1012. Negotiating the Offer 1049 The Home Inspection 1071. What Is Covered in a Home Inspection? 1082. What Is the Role of the Home Inspector? 1092.1 Insulation 1112.2 Marijuana grow operations 1122.3 A ccessory apartments 1132.4 A ttend the home inspection 1132.5 The home inspection report 1143. Is an Inspection Needed for a Newly ConstructedHome? 11510 The Role of Your Lawyer 1171. How to Find the Right Lawyer 1192. What Is the Lawyer’s Role When Closing Your Deal? 1203. Closing Costs 1243.1 Ontario land transfer tax 1263.2 British Columbia property transfer tax 1273.3 Prince Edward Island first-time buyer landtransfer tax 1273.4 A lberta and Saskatchewan land transfer fees 1283.5 Manitoba land transfer tax 1283.6 Québec land transfer tax 128Contents ix3.7 New Brunswick real property transfer tax 1283.8 Nova Scotia land transfer tax 1283.9 Newfoundland registration of deeds 1293.10 Northwest Territories land transfer tax 1293.11 Yukon Territory land title 1293.12 Nunavut 1304. Closing Tasks 1305. Will and Powers of Attorney 13111 Title Insurance 1331. Title Insurance and How It Protects the Buyer 1352. Title Insurance and What It Doesn’t Cover 1373. How Do You Choose a Title Insurance Company? 1384. What Does Title Insurance Cost? 1395. How Do I Obtain a Title Policy? 13912 Home and Property Insurance 1411. Property and Contents Insurance 1412. Mortgage Insurance 14413 Moving forward 147Samples1 Mortgage for 25 Years 392 Mortgage with Monthly and Biweekly Paymentsfor 25 Years 413 Mortgage with Biweekly Payments Plus $50for 25 Years 424 Mortgage with Biweekly Payments Plus $100for 25 Years 44Worksheets1 Monthly Budget 272 Home-Buyer Profile 903 Home-Buyer Checklist 934 Closing Tasks 131