Being on the path to purchasing your first home is one of the most exciting and most rewarding moments in life!

To help make the mortgage process smoother, one of the things you can do is to get pre-approved for your mortgage. Getting pre-approved doesn’t commit you to a single lender, but it does guarantee the rate offered to you will be locked in from 90 to 120 days which helps if interest rates rise while you are still shopping!

Rate holds for mortgages offer several benefits including:

1. Protection Against Rate Increases: A rate hold guarantees that you will receive a specified interest rate for a set period, typically up to 120 days. This protects you from potential rate hikes during this period. Plus, if the rate should drop, you can still take advantage of the lower option!
2. Financial Planning: Knowing the exact rate you will pay allows for better financial planning and budgeting. It provides clarity regarding what you can expect for your monthly mortgage payments. This makes it easier to target the right price range of home so that you can ensure future financial stability.
3. Time for Decision Making: A rate hold provides peace of mind allowing you the necessary time to shop around for the right home. During this time, you can also compare different mortgage options without the pressure of changing interest rates. This is particularly useful when you’re considering different lenders or mortgage products.
4. Stress Reduction: It reduces the stress of rate fluctuations and uncertainties in the housing market. After the past few years of turmoil, knowing that you have a secured mortgage rate can take a lot of the pressure off shopping. Instead of feeling like you need to find a new home before the rates change again, you can take the appropriate time. Plus, if your rate hold expires, it is easy to submit for a new one!
5. Securing a Competitive Rate: While we are not anticipating interest rate increases in the coming years, securing a rate hold while you shop can save you money over the long term by locking in a favorable interest rate should anything pivotal happen in the market.

Overall, rate holds provide peace of mind, financial security, and the opportunity to make informed decisions when entering into a mortgage agreement. They are particularly valuable in fluctuating interest rate environments or when you anticipate delays in finalizing a mortgage transaction. Looking to purchase a home? Want more information on rate holds and the mortgage process? Reach out for more details.

Buying a home is one of the most exciting ventures in life! To ensure it goes smoothly, you need to have a proper budget in place to protect your financial security and help you make the best decision for your future location. However, the cost of the home is not the only cost that you need to budget for! The temptation will always be to start looking at the very top of your budget but fees, such as mandatory closing costs, can easily put you over the top. Knowing the real numbers will make it that much easier to stay within your budget and maintain your financial comfort.

Closing costs are a one-time fee associated with the sale of a home and are separate from the mortgage insurance and down payment. Typically, these costs range from 1.5-4% of the purchase price, depending on your location. This means, for an $800,000 home, you would be looking to budget around $22,000 on average.

Here are a few closing costs to keep an eye out for:

• Land Transfer Tax: This is calculated as a percentage of the purchase price of your home, with the amount varying in each province. Some cities, such as Toronto, also have a municipal LTT.
• Legal Fees and Disbursements: You can expect to incur a minimum of $500 (plus GST/HST) on legal fees for the preparation and recording of official documents around your purchase.
• Title Insurance: Most lenders require title insurance to protect against losses in the event of a property ownership dispute. This is purchased through your lawyer/notary and is typically $300 or more.
• PST on CMHC Insurance: Though CMHC insurance itself is financed through the mortgage, PST on the insurance is typically paid at the lawyers and sometimes deducted from your advance.
• Home Inspection Fee: A home inspection is highly recommended as a condition of your Offer to Purchase to prevent any future surprises. This can cost around $500.
• Appraisal Fee: An appraisal is performed to certify the lender of the resale value of the home in the case you default on the mortgage. The cost is usually $400 – $600 but is typically covered by the lender.
• Property Insurance: Property insurance covers the cost of replacing your home and its contents, and must be in place on closing day. This is paid in monthly or annual premiums.
• Prepaid Utility Bills: You may need to reimburse the previous owner of your property for prepaid costs such as property taxes, utilities, and so forth.
• Property Taxes: Property taxes are due on an annual basis and are calculated as a percentage of the home value and vary by municipality. You also may need to reimburse the previous property owner if he/she has already paid property taxes for the full year.

Knowledge is power and understanding the hidden costs associated with purchasing a home can help you create a realistic budget and ensure you remain within your financial means. Contact me if you have any questions about your current purchase process or if you are looking to buy a new home now or in the future!