Whether you’re looking to move homes or buy your very first home, you’ll likely have lots of questions about buying a home. From obtaining a mortgage to hidden expenses, here are some of the most frequently asked questions about buying real estate.
What is the first step to buying a home?
The first step is to define your goal, needs, and budget. It is strongly recommended to meet with your bank or other mortgage lender before you even begin the process of searching for a new home. You’ll want to get a full understanding of what kind of home you can afford while taking the hidden costs of buying a home. Learn more about this step and what comes after in our buyers’ guide, or connect with us to help answer your questions.
Do I need to get mortgage pre-qualification or pre-approval?
A lender can conduct a mortgage pre-qualification, which will provide a rough estimate of how large of a loan you may qualify for based on your income, debts, and assets. A mortgage pre-approval will provide more certainty in the home buying process as you will receive a more concrete answer on how much of a mortgage you can afford as well as an offer on a fixed mortgage interest rate if you should purchase a home within a set period (typically between 90 to 120 days).
How does the mortgage pre-approval process work?
During the pre-approval process, you’ll need to provide potential lenders with information, including proof of employment, proof of income (i.e., paystubs), a letter from your employer explaining your job position and length of the time with the company or tax returns and financial statements if you are self-employed, financial statements from your checking and saving accounts, along with details on any other financial assets you own. You’ll also need to demonstrate where the money for your down payment will be coming from and undergo a hard credit check.
Why do I need to work with a real estate agent?
A good agent will have expert knowledge of the market, property types and different neighborhoods you’re interested in. They’ll also safeguard your investment and guide you through complex property disclosure reports and documents, identify risks and problems, navigate stressful negotiations and procedures, and advocate for your best interests. Visit FeisalRealEstate.ca to learn more about the value of working with us when buying a home.
How much will I need for a down payment?
In Canada, you are required to pay a minimum down payment of 5% of the purchase price of your new home, however it is generally recommended to pay at least 20% of the purchase price to avoid having to pay mortgage loan insurance.
How much will I have to pay in closing costs?
Once you’ve found the home of your dreams, you’ll still have to pay a percentage of the home’s purchase price in closing costs including property transfer taxes, appraisal fees, land surveys, property and title insurance, home inspection fees, legal fees, and GST or HST depending on which province you are buying in. Learn more about what to closing costs to expect in our buyers’ guide, or connect with us directly to help provide a summary.
Feisal Qureshi is a licensed expert backed by experience and a world-renowned and trusted brand. We can help answer any questions you have about buying real estate and ensure you’re protected from financial and legal risks. Contact a Feisal Qureshi - REALTOR® and let us help guide you through the process.
*This blog post was written to help readers understand frequently asked questions. However, in an ever-changing real estate market, home buyers should consult an experienced buyers’ agent who can help them navigate the process and protect them from errors and inconveniences. If you have any questions about the buying process, feel free to contact us to discuss further.
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