So from what I understand, three things are happening right now:
- The offer letter is being reinstated.
- I need to get mortgage approval
- I need to get my deposit
Got a copy of the letter. Emailed the bank with paperwork, my last two Notice of Assessments (via Service Canada online) & I contacted my Financial Planner to withdraw my RRSP.
Next, I found a great resource on the CMHC website 'Are you financially ready' You can review it here.
Things I've learned so far.
- This is f'n stressful, especially doing it alone!
- Having a solid budget already created helped. I removed my rent line and put in my mortgage + maintenance fee and then started adding in the things that I do not pay now. It looks like this:
- Mortgage w/property taxes
- Laundry
- Gas
- Food
- Car Insurance
- Child Care
- Sponsor Child
- House insurance*
- Car Loan
- TV/Internet
- Maintenance Fee
- Hydro
- Life Insurance
- RESP
- RRSP
- Cell Phone
The two items that were covered in my maint fee were water & heat. Be sure to ask what is covered and not covered!
I don't keep a balance on my credit cards so those aren't listed. The highlights are what new items were added. *I had tenants insurance before so this was just a switch out + add $.
So this is where I recommend starting from. You can figure out your mortgage pmt from the bank sites by putting in the asking price (adjusting if it sells for less). Maintenance fee is listed on the seller sheet. I also found by googling the address that some other Realtors have more info on their webpage.
House Insurance. There are special considerations when insuring a condo as opposed to other forms of housing tenure. You’ll want to check that your individual unit and the condominium corporation as a whole are sufficiently insured. For more information on insurance, see What property or general insurance coverage should I look for? in Frequently asked questions.
I've been using TD for years and put in an online quote, then tried BCAA and an independent. So far the prices are coming in a bit higher than what my friends are paying for condos so I want to shop around. I estimated it would be about $25/month. I was paying $21 for tenants insurance. There are a lot of extra options that my be beneficial so I want to ensure I have full coverage.
TV/Internet. I am almost tempted to drop the TV since most can be seen online and it's an added cost. Internet is something I haven't paid for a long time since I've mostly lived in basement suites and it's included in my rent. I even looked at upping my data plan on my phone but it's too costly and not enough gigs. My options are Telus & Shaw.
After determining that the monthly costs are within my budget, there are now the home buying costs.
Okay so now for the tough stuff. Here are the other fees you will be paying:
Monthly
- Mortgage less down payment + CMHC fee
- Maintenance Fees
One Time:
- Transfer Tax (will get back at tax time)
- Appraisal Fee (If applicable)
- Bank drafts
- Home Inspection Fee
- Notary/Lawyer
- Title Insurance
- Moving costs (Rental truck, in/out fees)
Don't forget during tax time to claim the First-time home buyers' tax credit
Claim $5000 on Line 369 - Home buyers' amount and receive $750 as a non refundable tax savings
First is the down payment. 10% +. I have been saving up for retirement in RRSP's since 2008 which have been doing quite well. I figured this was the easiest way to get my downpayment and I could withdraw the money with the expectation it would be paid back.
Deposit
CHMC - CANADA MORTGAGE AND HOUSING CORPORATION
Typically lenders will require mortgage loan insurance if a borrower has a down payment of less than 20% of the purchase price of the home. To determine the amount you will have to pay if your down payment is less than 20%, click here.
Transfer tax
This is a tax that applies to non first home buyers only. You can see how much you are saying by being a 1st time home buyer by using the calculator on this page. Read on to see how this fee is eliminated :)
Lawyer / Notary
First Time Home Buyers' Program
This program reduces or eliminates the amount of property transfer tax you pay when you purchase your first home. If you qualify for the program, you may be eligible for either a full or partial exemption from the tax.
To apply you need to complete the First Time Home Buyers' Property Transfer Tax Return when you or your legal professional register the property transfer.
After you have applied you must meet additional requirements during the first year you own the property to keep the tax exemption.
This fee is put onto your mortgage and then refunded on your tax refund.
Appraisal Fee
Your mortgage lender may ask you to pay for a recognized appraisal in order to complete a mortgage loan. An appraisal is an estimate of the value of the home. The cost is usually between $250 and $350 and must be paid when you contract for those services.
Property Taxes - The amount you have to pay is shown on the property listing. It is incorporated into your mortgage pmt.
Mortgage Loan Insurance Premium
If you make less than a 20% down payment, you have a high-ratio mortgage. With a high-ratio mortgage your lender will need mortgage loan insurance. Mortgage loan insurance lets you buy a home with a minimum down payment of 5%.
Most Canadian lending institutions require mortgage loan insurance because it protects the lender. If the borrower defaults (fails to pay) on the mortgage, the lender is paid back by the insurer.. You pay a premium for mortgage loan insurance. Your lender will add the mortgage loan insurance premium to your monthly payments, or ask you to pay it in full upon closing.
I am looking into this as I have life insurance and that may cover my mortgage. I was quoted about $100/mo by the bank but it was absorbed into my mortgage payments.
Home Inspection Fee
You may opt to get an inspection done to ensure you know the building inside and out, this covers your butt! I've put in some condo inspection quote requests and the fees ranged from $350+. (If you do suite only it is in the lower range)
Title Insurance: To protect the lender's interest in the mortgaged property in the event there is some discrepancy on title that would create a legal problem, many lenders require title insurance. Title insurance is often a less expensive and acceptable alternative to getting a survey prepared for the property. Cost is $100-250.
Research
Understanding all that is involved with buying a condo (and in my case one that is almost 40 years old) is imperative and not doing so may bit you in the end. These are the things that you should be aware of and ask lots of questions!
Declaration/Constituting
A condominium’s declaration sets forth fundamental information about how the condominium is organized and operated, such as the proportion in which owners are to contribute to the common expenses, and it may have restrictions on pets, home-based businesses, what can go on a balcony and many other issues.
Unit Boundary
Find out exactly where your unit ends and the common property begins. Is the door to your home part of your unit, for example, or is it part of the common elements?
Unit Factor/proportionate share/percentage of ownership
This is a key piece of information because it determines how much you will pay in monthly maintenance fees and sometimes your voting rights.
You’ll find your unit factor listed in the condominium’s declaration (or other governing documents, depending on where you live). Don’t expect it to be equal to your neighbour’s, but it should at least be similar to those of other units that are comparable in size and location.
Your unit factor is usually based on the size and location of your unit.
Reserve Fund/Contingency Fund/Capital Replacement Fund
A portion of your condo fees will likely go toward the building’s reserve fund. A reserve fund ensures that the condominium has enough money to pay for the major repair and replacement of the common elements over the life of the building. These may include the roof, roads, sewers, sidewalks, elevators, plumbing and other building systems.
The Realtor should provide the following documents for you to review:
- How much money is in the contingency fund
- Technical Audit
- What is paid from:
- Contingency fund
- Special Levy
- Planned expenses from maintenance fees (and break down of what has already been allocated compared to what's left)
Perform a Physical evaluation checklist.
Inspection
I was referred to a local Inspector who used specialized tools to conduct their testing. I was quoted 2 hours and for me to show up 15 mins at the end to review the report. My Realtor met with the Inspector and when I arrived, he had a full report on his iPad with his findings. Lucky for me there wasn't anything of concern. I signed with my finger and paid by credit card. I received the receipt and a very comprehensive report via email. The cost was just under $400 including tax.
From that point I decided to remove the conditions since I felt that the condo passed all the tests to purchase. My other option? To walk away.
Next task was off to the bank to pick up the bank draft (cost of $7.50) for my deposit. Originally I was going to give a good portion of my down payment but then I was told that if the deal falls through aside from funding, I lose the deposit. I was also concerned about my RRSP withdrawal taking too long next week so I made the request for a smaller deposit that I could give instantly. They agreed. I dropped the cheque off at the Real Estate office.
The remaining tasks were:
- Provide a copy of the signed subject removal form to my bank
- Set a completion date
- Get keys
Since I signed the subject form, my 'closing' date was that day. The completion date is when all the paperwork completed by the Notary is ready to push through and the Seller receives their money and I 'officially' own my new home.
Since I am a renter, I had to give 30 days notice which means I will have two places at once. While I do not have a mortgage payment until Dec 1st, I still pay interest in October + December. My Landlord was kind enough to give me a discount on my last months rent so I could move out early.
My completion date was originally scheduled for mid Nov due to some confusion but has now been bumped to end of October so I can get keys sooner and move in slowly which is a lot less stressful that doing it in a few days.
Now in the background, the Bank and the Notary are doing their paperwork thing and it should be finalized in a little over a week. I still need to get a 2nd bank draft with the rest of the down payment and give that to the Notary.