Category: Mortgage Information

It is essential that you are aware of the costs associated with a Kamloops home purchase. It is important to speak with a mortgage professional before shopping for a home; this will allow you to shop within a price range that is realistic for your situation. At the same time, make sure you are prepared financially for the standard costs associated with a purchase of real estate.

Some of these costs may include:

Deposit:  Once you have an accepted offer on a place, there is generally a five to ten business day period to remove subjects (ie. Inspection, financing, etc.)  Once those subjects have been satisfied, you are required to put down a deposit on the property.  This amount varies, so make sure to ask your Realtor.

Property Purchase Tax:  If you are a first time home buyer and you meet the qualifications, this does not apply to you.  However, if you have ever owned property, anywhere in the world, this tax will be charged on your purchase completion date.  You calculate the amount by taking 1% of the first $200,000 and then 2% of anything over that.

GST:  When purchasing a brand new property, GST will be charged.  Your realtor will advise you of this amount, and it does not apply to used homes.

Closing/Legal Fees:  Be prepared for a legal bill of approximately $1000 for a standard purchase or sale.  If you are buying and selling at the same time, budget approximately $2000 for this expense.

Property Tax Adjustment:  This is calculated at the lawyers office.  A person is always responsible for the property taxes due during the time lived in the home.

Appraisal:  Depending on the lender and how much money you have down, an appraisal of the property may be required.  A standard, residential appraisal will run between $250-$350, and is due at the time of appraisal.  Different properties will have a higher cost, so ask your mortgage professional once you have decided on a property.

Insurance Premium (If Applicable):  In Canada, if you are financing a property to more than 80% of the property value, the mortgage needs to be insured (This is called a “high ratio” mortgage).  This is generally done through CMHC, Genworth Financial, or AIG. They charge an insurance premium that is added to your total mortgage.  The percentage that you pay will vary depending on how much money you have down and how straight forward the approval is.  If you have a 20% down payment or you are refinancing to no more than 80% of the property value, a fee is generally not charged.  A typical fee ranges from 1.75% to 3.10% of the mortgage amount.

It is essential to get pre-approved before making a commitment to purchase a home in Kamloops. If you have any questions for me about mortgages don’t hesitate to post a comment here or contact me directly.

Brenda Colman, Mortgage Consultant, Invis Kamloops

P. 250-318-8118  E. ac.sivninull@namlocadnerb W. www.BrendaColman.ca

Introducing Brenda Colman. Brenda is a mortgage specialist with Invis here in Kamloops. She will share her knowledge and expertise on a monthly basis. If you have any questions for Brenda, please post them here or give her a call.

Interest rates touching historic lows and more attractive house prices in parts of the country have added up to better affordability for first-time home buyers. The federal government’s recent budget has added more reasons for Canadians who aren’t yet homeowners to consider entering the Kamloops real estate market this year. Under the new federal budget, first-time home buyers can qualify for a $750 tax credit, to help with closing costs, such as appraisal or legal fees.  Also, home buyers can now withdraw up to $25,000 from their RRSP under the Home Buyers Plan for a down payment – up from the previous limit of $20,000. Couples can access an extra $10,000 from their RRSPs under the plan.

For those who are feeling secure about their income and want to take advantage of low rates and a more affordable market, the new federal budget provisions could make an enormous difference in terms of the properties they can afford, We’re now seeing more first-time buyers seriously considering making the jump into the Kamloops market this spring.

Here are some tips to help first-time home buyers:

Start the process early.
A mortgage consultant can help you with getting the right documentation in place, such as proof of income and down payment. A consultant will also check your credit history to avoid any unpleasant surprises and ensure you can meet the lender’s requirements. If you are thinking about a home purchase, consulting a mortgage specialist is critical to navigating the mortgage process.

Know your price range.
If you want to buy a home within the next few months, getting a mortgage pre-approval will help you determine the right price range of homes to shop for. Many lenders will also guarantee a rate for up to 120 days when pre-approving potential borrowers for a mortgage.

Don’t rush your decision.
A buyer’s market means that you now may have the leeway to negotiate more with sellers on the price as well as other terms of the transaction such as the possession date and extras to be included in the purchase.

Accelerate your payments – early and often.
A mortgage is the largest debt that most consumers will ever take on, and paying it down faster can mean large savings on interest costs over the long term. Get in the habit of making lump sum payments whenever possible, and consider making bi-weekly payments as a way to decrease the life of the loan.

Know your goals.
Choose a mortgage that accommodates the present state of your finances but also fits your long-term goals. Similarly, don’t just buy because it’s a buyer’s market – choose a home that fits your lifestyle as well as your family’s needs in the years ahead.

Brenda Colman, Mortgage Consultant, Invis Kamloops

P. 250-318-8118  E. ac.sivninull@namlocadnerb W. www.BrendaColman.ca