First-time buyer mortgage requirements. Looking for a mortgage, please read on. Here we will outline the procedure and requirements you will need to follow.
Are you a first-time home buyer looking for property in Calgary?
Read on, if the answer is “YES.” In everybody’s life, the time comes when you are about to embark on a new and exciting journey. Buying a new home is exactly an example of such a journey. It entails all the necessary procedures such as choosing the destination, making the payment, commuting, and finally, arranging your lifestyle. When going abroad, as a rule, we rely on the experience of our travel agent, who is responsible for every stage of the journey. While buying a home for the first time is even more challenging than a simple trip to another continent. In this case, you should also get an idea of the complete process. Before you ask a professional real estate agent to assist you in the deal. This article will give you a brief outline of what might come in handy for you as a first-time home buyer.
Credit tips you should be aware of for first time home buyer requirements
It is quite natural that you may not have encountered various real estate issues before and are still hesitant about some of them. To clear everything up for you, here we cover some basic info including creditworthiness required to buy real estate and how everything works in the Calgary area.
Is the government of Canada committed to helping?
In fact, the answer is evident, as every day we hear about numerous government programs aimed at helping Canadians to buy real estate of their choice. Also, the government keeps potential buyers well-informed about the opportunities they offer as well as the pitfalls that can stand in their way. The Canada Mortgage and Housing Corporation (CMHC) issues some guides where such things are covered in detail. Not only first-time home buyers can find much useful info related to real estate here, but existing owners as well. Once again, such small but extremely helpful elements show that the government understands and meets the needs of the Canadians.
Forms and documents you deal with when buying a home
If everything was simple, houses would be bought and sold within one-two days. On the contrary, I’m sure you know that the real estate purchase process is both quite exciting and tedious at the same time. There are many forms to fill in, check and re-check. Here you had better enlist the services of professionals such as real estate agents and real estate lawyers. These are the people who have already completed thousands of such forms and have the expertise and experience. It is most definitely worthwhile, and advisable to enlist a real estate agent when you are considering acquiring new real-estate. The Realtor will guide you through the complete process, from helping you decide on the best area and house. Also, filling in the offer to purchase with all the necessary accompanying documents right thru to appraisal, home inspection etc.
If something goes wrong with your realty purchase…
And it appears that you are not able to meet the closing date of the real estate purchase contract. What is to be done in this situation? You have several options to consider. And to know what is best and most practical for you, consult with real estate professionals, realty lawyers, and/or mortgage brokers.
- One of the choices that they may suggest is bridging the financing gap. It means that the bank will lend you the necessary amount of money to close your purchase, prior to your sale closing. Instead, you will be obliged to repay that money to the bank from the sale of your existing home (this is only the case if you are not a first-time home buyer).
- There is also another option – ask for an extension on the closing date.
However, there can be additional unexpected stipulations you should be aware of:
- increasing the deposit amount;
- assuming the responsibility for all the taxes and insurance;
- reimbursing all mortgage carrying charges;
- releasing the deposit to the seller at once if the closing does not close on time;
- additional legal costs reimbursement;
Contract expiry mayhem
Real estate contract expiration can be interpreted conversely. Expiration date presupposes the final date by which the other party has to accept the offer. This term has only one meaning, and if understood otherwise, it can cause you a collection of problems. You should know that real estate sales or purchase contracts can automatically expire once you pass the accepted time, but should be followed up in writing by all parties.
As any kind of property tax, taxes are to be paid annually and on time. If you do that, you can be sure everything will proceed as planned, and you will not have issues and penalties with banks and legislation. Thus, property tax is paid annually, and everyone’s bills are distinctive. First of all, because they are calculated by the property’s assessed value and the property tax rate which is approved by Council. As a rule, the bills are sent in May. If you don’t receive it by the first week of June, it would be beneficial to contact the city Property Tax department and ask them to send you the copy of your statement.
It is a common practice when somebody does not make a “timely” payment, he or she is assessed a fine. Real estate tax payments have no exceptions. The penalty equals 7% penalty of your unpaid balance on July 1 and October 1. The worst case scenario is if someone does not pay their property taxes for over three years. Then such property is put into arrears collection by the city and listed for sale.
What do you know about reverse mortgages?
First, a reverse mortgage is sometimes a great way out of precarious situations especially when there is a money issue. A reverse mortgage offers the owner to enjoy their lives at the expense of the real estate they already own. No payments are due until you sell the property and/or the owner passes away. At this time the lender receives principal and interest from the sale of the property. Still, all legal and mortgage issues are best discussed with your real estate manager, investment advisor, and lawyer.
Loans on your home
Taking a loan is a major step in your life, and to be sure everything runs smoothly, it is recommended to cooperate with a professional mortgage broker, who will give you advice, help chooses a reliable lender and generally – guide you thru all your mortgage documents.
What stands behind the down payment?
A number of down payments vary on a case to case basis. The minimum down payment in Canada is 5%. While if it is less than 20%, you will be asked to sign off on Mortgage Loan Insurance, (CMHC or Genworth).
So who is eligible for a mortgage? In general, everyone over the age of 18 but you need to have a good credit history & ability to pay. If this is not the case, one way to build your credit is to take out small loans and repay them “on time” to establish a higher credit score. Then, you have a mortgage broker pre-qualify you based on your income. Once this is in place, you are required to make a down payment, minimum 5% but dependant on how the lender views you as a risk. Your employment history is also taken into account and lenders do verify by contacting current employers and looking at previous years tax assessments.
Hopefully, you have already chosen your real estate agent and a mortgage broker to assist you with the process. However, if you’re hesitant about something and need professional consultation – contact Ron Christensen with Royal LePage Solutions, who is here to help you with all the real estate related questions you may have.