Proactive Research Is The Key To Discovery
Montreal home sellers don’t just pick up the phone and call you with a maintenance-free home and an excellent mortgage. Reading available real estate information materials, talking to friends and experts, and investing your time wisely by viewing a variety of area homes on the market and researching the schools & neighborhoods is the best way to realize your home ownership dream.
Make A Plan And Get Pre-Approved
Carefully examine each important decision and think it through. Develop a well organized plan for making your Montreal home purchase. Focus on the most important factors. Create file folders on house hunting, home financing, service providers, etc. Get yourself pre-aproved for a loan so you can determine the amount of home you can afford. Getting pre-approved also increases your chances of closing a deal, The seller is more likely to accept an already funded offer than one from a home buyer who still needs to get a loan. A lenders usually employ the 28% formula (your monthly mortgage must not exceed 28% of your monthly income) in approving your loan. Plan your actions and get pre qualified, this reduces the chance of panic situation and allows you seize opportunity when it is presented. A thorough plan will save both time and money!
Value, Value, Value
The days of 5-15% annual appreciation still exist. Presently you are looking at stable growth while guarding against the possibilities of falling prices, climbing interest rates and corporate layoffs that can dramatically affect home values. The classic rule of buying the worst house in the best neighborhood still applies. If you buy with an eye towards improvement, you can customize the home to fit your needs. The saying, “make money buying a home, not selling one” should keep you focused on the long-term importance of the purchasing price.
Create A Top 10 List of Amenities
When shopping for a home, list the features (fireplace, fenced-in yard, new appliances, etc.) that are most important to you in deciding on which home to purchase. Establishing your criteria early on will save time shopping for inappropriate homes and may keep you from buying a home on a whim, for example, because of a circular stairwell that doesn’t meet your fundamental requirements. As detailed above, your top reason for buying a home should be the value you are getting. Some of your top 10 amenities should logically be sacrificed if an incredible value is available.
Fixed vs. Variable Interest Rate Mortgage
Which type of loan fits your particular needs? Are you a first home buyer or are you moving to a larger home? If you’re planning to own for a short time, a Variable Interest Rate Mortgage may be the best type of loan. If you’re shopping for your dream home or you plan to raise a family, a fixed rate mortgage may be more suitable for you.
Whichever loan you choose, make sure that you scrutinize all the closing costs. If you are required to have mortgage insurance, make sure you understand the terms and cancellation procedures. Also, make sure there are no prepayment penalties so that you can utilize an accelerated mortgage plan. A good mortgage reduction plan can save you tens of thousands in interest costs, and shorten your loan term, with only small extra principal payments. If you experience negative changes in your job, health, or marital status, you can revert to the standard payments in your mortgage contract.
Sign A Contract That Protects You
Make sure that the contract you put on a house allows you to arrange financing, inspect the home and negotiate any problems that you uncover. Ensuring that the contract you sign will minimize potential legal battles will let you swim in your new pool with your family and neighbors instead of with the sharks.
Put Yourself In The Seller’s Shoes
You are about to make one of the most important decisions that will affect both your life and the life of the seller. If you take time to understand the reasons the seller bought their Montreal home, their reasons for selling, and the home improvements they have or have not made, you’ll be in a better position to evaluate the home and negotiate a better deal. A closer look at the seller may help you in deciding whether and for how much to buy a particular home.
Develop A Mortgage Shopping Chart
One of the biggest decisions to make before putting an offer on a home is how to finance the purchase. There are many lenders competing for your mortgage business. The days of simply walking into the community bank and negotiating with the loan department manager are over. Today, you can apply for a loan over the Internet or even use a mortgage broker to shop for your loan with dozens of lenders. When choosing a lender, you want to avoid apples to oranges contrasts by comparing fixed rates to fixed rates, not fixed to Variable Interest Rate Mortgages. Create a chart that lists different types of loans, fees, and at least three mortgage providers, including a mortgage broker.
Consider Mortgage Insurance
Mortgage Life Insurance can pay your balance in the event of your death and is an alternative to standard life insurance. Neither your family nor your estate would have the financial burden of paying off your loans.
Mortgage Disability Insurance can be added to your Mortgage Life Insurance, if you become totally disabled, your regular payments can continue to be made for you, to a set maximum amount per month. You are insured until you are no longer totally disabled, your mortgage has been paid in full, or you received benefits for a consecutive set amount of years. Speak to a life and disability insurance specialist, Bruce Wilkins from CIBC Wood Gundy for more options and information.
Get A Quality Home Inspection
Although it is hard to believe, more people pay for inspections before buying used cars than when making the biggest investment of their lives! Paying for a qualified home inspection before you buy a home isn’t just spending a little extra for peace of mind; it’s absolutely essential.
