purchasing a house

[Leafaholic99]

I remeber their being a thread with a ton of info on purchasing a house, which was started years ago but I haven't been able to find it lately. I am currently in the market to buy a house and remember there being a lot of good info in the thread, I have quite a few questions so hopefully someone can help me out here.

What is the best way to go about a mortgage? Check the prime rates and go with the best one? Mortgage broker?

I was told by a friend that every pre-approval, your credit takes a hit, so is it best to only goto one bank?

This is my first step in buying and it may be a rushed process as once I get my release date, depending when it is, I need to find a place and get all the paperwork processed so I can move around my release date. I am really hoping they don't release me until the end of August as I goto college Aug 27th for work and that would give me 10 weeks to look and everything.

Thanks for any help you can provide!

 

[Corn Flake]

I would recommend a local mortgage broker but ask around people you know for a good name. Some are good and some are useless. 

A broker should be able to get a lot of the legwork done for you on pre-approvals, etc.  They also check your credit once and can provide info to banks so your bureau doesn't get hit multiple times on pre-approvals.  I wouldn't waste your time going to multiple banks on your own anyway. 

I would suggest you go with a variable rate mortgage if you are not 100% sure how long term the move is or whether the place you buy is where you will stay.  You can get out of a variable and only pay 3 months interest if you decide to buy a different place or you move back home.  A fixed rate mortgage will kill you in penalties.  If you know you are there for 4-5 years then some of the fixed rate mortgages are incredibly low right now. 

For the rest of the paperwork, find a lawyer (local again is better) and make them aware of your timing concerns.  They usually want 30 days min to process but they can do it in a week if they have to.

 

[Rick C.]

Yes, go with a good mortgage broker.  You likely will get offered at around 3%, last I checked.
You'll also need to start asking around for a good property assessment guy.  They're worth their weight in gold.

 

[Leafaholic99]

Thanks guys!

I got a rate of 2.88% for a 3 year fixed rate and a 2.5% 5 year fixed rate. Not sure what my plans will be in 5 years with where I want to live/space I'll need, so I think I am going to go with the 3 year fixed rate. Now that I'm pre-approved, time to get an agent and start looking for a house, as well as a lawyer :-D.

I was approved within 30 mins from TD and instantly with a credit union.

 

[WalterSobchak]

Ryan, some good advice all around here. Now take some from me. Make sure you know every little detail about what you are getting into before you take the leap.

Do some research on how much money it will cost you to pay taxes every month, how much utilities/cable tv/satellite/phone/food/insurance/gas for car/ unexpected problems that may occur (meaning save for a rainy day, your furnace could go belly up, etc)..

Make sure you know the neighbourhood you are moving into. Although a 3 year term isn't too bad, if you move in, and get into a war with your new neighbour, you could be stuck there for two more years, or if you decide to move, you'll have a huge "breaking the mortgage" fee, expecially if you get the mortgage from a financial institution and not a bank. Financial institutes usually want the rest of your months left of interest and the formula is messed up. So if you have 24 months left and the interest rates go from 3% up to 5% when you decide to sell, they will still want their remaining 2% of whatever left you owe..

Banks can be a bit more forgiving. Some only want 3 months interest. Just read the fine print or have a very knowledgeable real estate agent help you in your choice.

If I could do it all over again, I would go variable. Sure you may not know what you are paying each pay, but if you watch your bank/Bank Of Canada each month and the rates, you'll be fine.

Having said all this, I think you are buying in Manitoba? Laws and rules could be different..Good Luck.

 

[Chev-boyar-sky]

Thanks guys!

I got a rate of 2.88% for a 3 year fixed rate and a 2.5% 5 year fixed rate. Not sure what my plans will be in 5 years with where I want to live/space I'll need, so I think I am going to go with the 3 year fixed rate. Now that I'm pre-approved, time to get an agent and start looking for a house, as well as a lawyer :-D.

I was approved within 30 mins from TD and instantly with a credit union.

The only thing I'd check about that rate is whether you can pay down the principal each year.

It may not interest (haha) you, or even necessarily be possible financially at the moment (not trying to be rude, but these are sometimes the realities when one first buys a house), but that's one of the better clauses to have available as you can save a ton if you utilize it.
I think the mortgage I got allows us to pay down up to 20% of the amount owing of the principal owing every year saving huge amounts of interest in the process (we try to pay about 5K a year extra off the mortgage). Not many people take advantage of these clauses though.

When I checked into switching to the lower rate (probably the one you've been approved for) at the bank no such clauses existed.

In other words they're offering you a great rate, but they're gauranteeing exactly how much money they'll get.

 

[Leafaholic99]

Very good information guys, please keep it coming, this is why I started the thread.

One question I have is if I meet with an agent and I find a house that isn't their listing, can they show me it/accept my offer? Or can only the agent who has the listing do so?

 

[Bullfrog]

Your agent should make the offer for you and arrange to view the house with the listing agent.

 

[wnc096]

Also make sure when you make the offer that your real estate agent lists every minor detail included in the purchase.  I.e. window coverings, individual appliances ect.... don't assume the seller will be including these things with the house purchase.  More often than not if they aren?t specifically listed in the purchase agreement people will take them with them when they move out

 

[riff raff]

If you have a lawyer, have him/her look at your offer before you present it to the seller. They can help you ensure that everything is accounted for in the offer. A good real estate agent will do that too, but sometimes the agent is looking out for their own interests, not yours.

 

[Corn Flake]

Very good information guys, please keep it coming, this is why I started the thread.

One question I have is if I meet with an agent and I find a house that isn't their listing, can they show me it/accept my offer? Or can only the agent who has the listing do so?

Yes. Unless it is a private sale, they can show you the house and they can present and offer to the sellers and their agent on your behalf.  Your agent should help you put the offer together and make sure that all the items you wish to include in the purchase (as wnc096 said) are in there.

The only other time that is not the case is if the listing is "exclusive" but unless things are different in WPG, that is generally quite rare. Your agent will let you know. 

 

[Rick C.]

If it comes with a fridge/stove/freezer/washer/dryer, and they are nice ones, make sure the sale includes the ones currently in the house - otherwise they could take them all with them to their new house, and replace them with shitty ones that barely work...

 

[Champ Kind]

Thanks guys!

I got a rate of 2.88% for a 3 year fixed rate and a 2.5% 5 year fixed rate. Not sure what my plans will be in 5 years with where I want to live/space I'll need, so I think I am going to go with the 3 year fixed rate. Now that I'm pre-approved, time to get an agent and start looking for a house, as well as a lawyer :-D.

I was approved within 30 mins from TD and instantly with a credit union.

Ryan, are you sure these are fixed rate mortgage rates?  The 2.5% especially looks like a variable rate.

One piece of advice I'd put to you is that conditions can be your friend.  I know the GTA market is pretty fierce and including conditions like 'contingent on home inspection' may lead a seller to prefer another offer, but I've learned that having conditions really give you, the buyer, flexibility in the negotiating and post-sale processes.  A good real-estate agent can help you with this.

 

[sucka]

When i sold my house recently, there was a bidding war and eventually the bidders were waiving their rights to inspection and foregoing conditional clauses (ie financing).  Unless you're absolutely sure what you're getting or have an experienced eye, be careful of doing this.  I would suggest to prepare for this outcome by doing as best an inspection  as you canduring the open house.

 

[Leafaholic99]

Yea I got them mixed up, that was variable. I went with a fixed 5 year rate of 3.19 with TD, ACU came in at 3.24 and TD initially was 3.49, then I got TD to drop to 3.19.

TD has a portable mortgage that allows me to take the mortgage to another house in the future if I go that route in 3 years, which the plan is and won't charge me any penalties. They would just take my rate and the rate at the time of the move and blend them and if the new house was more, work it in with no penalties/extra charges, which is why I'm fine with a 5 year fixed rate.

Got an agent yesterday and he has sent me some listings and the plan is early August when I'm back in the city, to go look at some condos/houses. He apparently renovates houses as a hobby and can give me a rough estimate on what it will take if a house I like needs some work. Along with my cousin, uncle and father we could easily do any plumbing, electrical or carpentry work and then I'd only have to pay them in beers and buy material.

My uncle works for Manitoba housing and has a good eye for inspecting places for work needing to be done, so he will be coming with me to any open houses I goto.

Thanks for all the information thus far everyone and keep it coming!

Next up is finding a place and a lawyer for the paperwork, everything seems to be going smoothly so far and hopefully I can find a place and not enter a bidding war.

 

[J-Ho Fan]

Thanks guys!

I got a rate of 2.88% for a 3 year fixed rate and a 2.5% 5 year fixed rate. Not sure what my plans will be in 5 years with where I want to live/space I'll need, so I think I am going to go with the 3 year fixed rate. Now that I'm pre-approved, time to get an agent and start looking for a house, as well as a lawyer :-D.

I was approved within 30 mins from TD and instantly with a credit union.

Ryan, are you sure these are fixed rate mortgage rates?  The 2.5% especially looks like a variable rate.

One piece of advice I'd put to you is that conditions can be your friend.  I know the GTA market is pretty fierce and including conditions like 'contingent on home inspection' may lead a seller to prefer another offer, but I've learned that having conditions really give you, the buyer, flexibility in the negotiating and post-sale processes.  A good real-estate agent can help you with this.

Your telling me. Were in the process of buying a place, and it seemed like every place we put an offer on was a bidding war. We got outbid twice, and on the second one they put no conditions, which was something we would never do. The other one we offered on ,the seller came back and list price, we came up a bit, but not as much as we would have had they been more reasonable. Were in the process of buying a brand new condo from the builder..screw the bidding war crap. The was houses are selling in the GTA, your not going to find a "great deal" out there.

 

[Leafaholic99]

Well, all the work has been done, hopefully, I found a condo that is brand new (old apartment building completely re-done, its really nice and no bidding-wars. Submitted my offer yesterday, the condo owners are on site tmr at which point ill find out if they accept my offer, also since its a holiday wknd, I have to wait until tmr to go see the bank to take my offer in to apply for the mortgage. I was pre-approved for 180,000, but the place is 189,900. I'd get a possession date of Aug 20th *fingers crossed*

 

[Leafaholic99]

Well all the paperwork is done, just waiting to hear back if I'm approved,I should find out by 3pm today or tmr am. I've only been waiting a couple hours and its driving me crazy :|

 

[Champ Kind]

Well all the paperwork is done, just waiting to hear back if I'm approved,I should find out by 3pm today or tmr am. I've only been waiting a couple hours and its driving me crazy :|

Best of luck!  This is a really exciting time in your life so try and enjoy it!

 

[Rick C.]

Well all the paperwork is done, just waiting to hear back if I'm approved,I should find out by 3pm today or tmr am. I've only been waiting a couple hours and its driving me crazy :|

How did it go?  Good luck!