Home Buyers Frequently Asked Questions (FAQs)
Mississauga Real Estate FAQs
Real Estate Mortgage Frequently Asked Questions (FAQs)
Real Estate Lawyer Frequently Asked Questions (FAQs)
- Do Buyers have to pay any real estate commission?
- As a Newcomer, what is the minimum down payment?
- Why is a Mortgage Pre-Approval Important before searching for a home?
- Rough idea on Mortgage Payments?
- Is there a First Time Buyer Land Transfer Tax Rebate? If so, what is the amount?
- What are some Government Rebates for Home Buyers and Home Owners?
- What is an advantage of working with a Buyer Agent?
- What is the average cost for a Home Inspection?
- Where can Top Mississauga Schools be found?
- How to find Homes near Top Mississauga Schools?
Typically, Buyers do not pay real estate commission. The real estate commission is usually paid by the seller to the buyer's brokerage either directly or through the listing brokerage. However, a buyer can be asked to pay commission to the buyer's brokerage if the buyer brokerage is not paid any commission from the listing brokerage. This example can be based on a standard scenario where both the buyer and seller are being represented with each of their own Real Estate Agent.
As a Newcomer, what is the Minimum Down Payment?
The Minimum Down Payment is 5%, but it is heavily dependent on job, credit history and your situation. We recommend that you always consult a professional mortgage or financial advisor before making personal financial decisions. Contact Pratham Kalia to learn more about our Newcomer Program and check the Mortgage Information page on this website to learn more.
This is an important first step when starting a home search, as it gives a clear indication on estimated affordability. By indicating the higher limit and how much can be borrowed, the Mortgage Pre-Approval will give confidence to the home buyer and Real Estate Professional on specific properties that are within the range of the Mortgage Pre-Approval, which can simplify the home search.
Rough idea on Mortgage Payments?
This will depend on many specific circumstances. We suggest speaking with a mortgage professional to better understand the down payment, mortgage rates and mortgage terms. Pratham Kalia has a list of professional mortgage agents and brokers, that he has worked with. If you would like to speak with someone you already know and feel comfortable with, feel free to contact them. Check out Mortgage Information to meet one of the Mortgage Brokers that has helped many of Pratham's clients. The Mortgage Payment Calculator may also be of help.
Is there a First Time Buyer Land Transfer Tax Rebate? If so, what is the amount?
Yes, if you qualify as a First Time Home Buyer there is a Land Transfer Tax Rebate of $4000. Certain terms, conditions and restrictions may apply, please speak to a professional real estate lawyer and visit the official Government of Ontario website to get more information. Under the Helpful Tools Tab, there is a Land Transfer Tax Calculator to help get an estimate on Land Transfer Tax, based on the province, city and property value.
What is an advantage of working with a Buyer Agent?
What is the average cost for a Home Inspection?
Where can Top Mississauga Schools be found?
A list of top elementary and secondary schools can be found on the Fraser Institute Website. If you are planning to buy in Mississauga, contacting the Peel District School Board is also recommended to get more information of a school. Pratham Kalia finished all of his Schooling in Mississauga (elementary, middle, secondary and post secondary). Please contact us if you need help finding the right neighbourhood and school district.
How to find Homes near Top Mississauga Schools?
Homes near Top Public Mississauga Schools can be found on the Peel School District website. On this website, public schools can be found near the specified address of where you are looking to buy a home. If Catholic Schools are of preference, then please visit Dufferin Peel Catholic School District website.
- What is a Pre-Approval Mortgage Letter?
- How can one get a Pre-Approval Mortgage Letter?
- Typical Down Payment Increments?
- How does Conventional Mortgage differ from High Ratio Mortgage?
- Mortgage Loan Insurance, what is it?
- What is the difference between Fixed Term Rate and Variable Term Rate?
- What is the difference between Term and Amortization?
- Based on income, what can a Buyer expect in terms of affordability?
- Are there different Mortgage Payment options?
A Pre-Approval Letter is a Pre-Qualification Letter which shows what mortgage amount the individual can be Pre-Approved for based on Credit and Income. The benefit of the Pre-Approval Letter is that both you and your Real Estate Professional can look at properties based on the information in the Letter. This allows for better preparation and knowing the price range of homes that will be within affordability to you.
How can one get a Pre-Approval Mortgage Letter?
The Pre-Approval Mortgage Letter can be obtained from your bank or Mortgage Broker.
Typical Down Payment Increments?
Based on CMHC Premium Rates, the typical Down Payment range from 5%, 10%, 15% 20% and anything over 20%. To figure out specific Down Payment figures based on the purchase price of the property, check out the Mortgage Payment Calculator.
How does Conventional Mortgage differ from High Ratio Mortgage?
Any Down Payment that is less than 20% is considered as a High Ratio Mortgage and is subject to insurance premiums. A maximum amortization is 25 years for Insured Mortgages. Where as, Conventional Mortgages are given when the Down Payment is 20% or more. In this case, Mortgage Insurance is not needed and Amortization can be up to 30 years. Check out the Mortgage Payment Calculator to see the difference on payments based on the Down Payment and Amortization years.
Mortgage Loan Insurance, what is it?
As discussed in the previous question, Mortgage Loan Insurance is simply the Insurance Premium that the Home Buyer has to pay in the instance that their Down Payment is less than 20%. This one time Insurance Premium is added to the Mortgage amount.
What is the difference between Fixed Term Rate and Variable Term Rate?
The Difference between Fixed Term Rate and Variable Term Rate is that a Fixed Term Rate are Mortgages where the Rate and Payment remain consistent throughout the term of the Mortgage and Variable Term Rate is based on a Bank's Prime Rate, where the Rate and Payments change whenever the Bank changes their Prime Rate.
What is the difference between Term and Amortization?
Term is the period within the Amortization period for which the Home Buyer can choose and negotiate rates with a Mortgage Lender. Typically, this Term can be from 6 months to 10 years. Amortization is the total number of years it will take for the Mortgage to be paid off, completely. Based on your Down Payment, the Buyer can note the estimated time their Mortgage will be paid off completely.
Based on income, what can a Buyer expect in terms of affordability?
Rule of thumb is that your Mortgage may be approved for up to 4 times of the Buyers Gross Income, if the Buyer is putting less than 20% of Purchase Price as a Down Payment. If the Buyer as at least 20%, than the Buyer can hope to obtain a mortgage up to 5 times their Gross Income. But, it is always highly recommended to speak to a Mortgage Professional to find out exactly how much one can be approved for.
Are there different Mortgage Payment options?
Yes, there are different Mortgage Payment options and methods. Typically payment options available are monthly, semi-monthly, biweekly and weekly.
Courtesy to Vikram Gupta (Mortgage Professional) for the answers provided
- Any advice on choosing a Real Estate Lawyer?
- How do we choose a Real Estate Lawyer that also has experience with Builder New and Resale Condos?
- The breakdown of Legal Fees and what are the typical charges?
- What are the typical rates for Mortgage Registration and Transfers?
- What is Title Insurance and is it required?
- How does Title Search help the Buyer and what is it?
- Are there HST Rebates when Buying a Builder New Condo, if so where can a Buyer get more information?
- What is a Condo Status Certificate and what why does a Lawyer review this?
- What are some Red Flags in a Condo Status Certificate?
Before you retain a lawyer for your real estate transaction, you should contact the lawyer and ask him/her for a breakdown of the legal fees and other closing costs. Check to make sure that the lawyer has experience with handling real estate closings. Do you own homework and check out the lawyer’s website and reviews from previous clients. Buying a property is one of the most significant purchases that most people make and retaining an efficient lawyer with experience and expertise in the field will ensure that your transaction proceeds smoothly and that you obtain good title to your property.
How do we choose a Real Estate Lawyer that also has experience with Builder New and Resale Condos?
Purchase of pre-construction condominium is highly specialized. You should always choose a lawyer who has handled such transactions before and who is willing to review the Agreement of Purchase and Sale and to discuss all the pertinent provisions of the Agreement with you. Remember that typically a pre-construction purchase will close 2-3 years after the date of the Agreement of Purchase and Sale.
On a standard residential real estate purchase, the closing costs consist of:
- Legal fees – you can contact the lawyer and obtain a quote on the fees.
- Disbursements – this consists of items such as title search costs, couriers, photocopies, bank charges etc.
- Registration charges – there is a fee of $76.55 for each document to be registered on closing. In most transactions, there would be 2 documents to be registered – the Transfer and the mortgage.
- Title Insurance – this is based on the purchase price and whether the lender is an institutional lender or a private lender. Most lawyers, who have experience handling real estate transactions, will be able to give you an estimate of the title insurance premium.
- Land Transfer Tax - this is also based on the purchase price. If you are a first-time home buyer and will be occupying the property as your primary residence, then you may be eligible for the first-time home buyers’ rebate on Land Transfer Tax.
There is a fee of $76.55 for each document to be registered on closing. In most transactions, there would be 2 documents to be registered – the Transfer and the mortgage. In some transaction, the lender may require a Notice of Assignment of Rents to be registered or if documents are being executed under a Power of Attorney, then the Power of Attorney would have to be registered prior to closing.
Title insurance is not mandatory. You may opt for a lawyer's opinion on title or you may choose to purchase a title insurance policy from one of the various title insurance companies operating in Ontario. You should discuss with your lawyer the advantages of obtaining title insurance and what the costs of the same would be as compared to obtaining the opinion on title.
How does Title Search help the Buyer and what is it?
Prior to the closing of your purchase transaction, your lawyer is required to carry out certain title searches. These searches are to verify that the Sellers named on the Agreement of Purchase and Sale are in fact the owners of the subject property and whether there are any encumbrances on title such as existing mortgages, construction liens, tax liens, etc. Your lawyer will also search for writs of executions against the Sellers. Your Agreement of Purchase has 2 important dates in it – there is the Closing Date or Completion Date and then there is the Title Search Date or the Requisition Date. Ideally, you should retain a lawyer at least one week prior to the Title Search Date in order to allow the lawyer sufficient time to complete all the required searches and to contact the Seller’s lawyers before the Title Search Date.
Are there HST Rebates when Buying a Builder New Condo, if so where can a Buyer get more information?
The Harmonized Sales Tax (HST) is included in the Purchase Price and any rebates that you may be entitled to are to be assigned to the Vendor on Final Closing. (Note: you will be eligible for the HST rebate if the Property will be the primary residence of yourself or an immediate family member, you are a resident of Canada, and will occupy the property within a certain time after Closing). If you will not be occupying the property as your primary residence, then you will not be eligible for the HST rebate and will be required to pay to the Vendor on closing an amount equal to the HST rebate amount in addition to the Purchase Price. If the property is rented out, then you may be eligible for a rental property rebate instead and will have to apply for the same directly from Canada Revenue Agency post-closing. You can get more information from Canada Revenue Agency.
What is a Condo Status Certificate and what why does a Lawyer review this?
The Status Certificate is a document provided by the condominium corporation which sets out the all the important financial facts of the condominium. It will usually be part of a package that includes the condominium declarations (rules, regulations and bylaws), insurance information, financial statements and an analysis of the state of the reserve fund. It will also let you know if there are any pending lawsuits against the condominium corporation, and give you a bit of insight into how the building is being managed.
Each condominium unit has its own status certificate, and includes details specific to that unit: the maintenance fees, what's included in ownership (legal description of the condo), and any prepaid fees or arrear amounts the current owner of the unit has. Your lawyer will review the Status Certificate to determine whether there are any unpaid common expenses and to verify that the correct common expenses amount is given in the Agreement of Purchase and Sale.
The lawyer will also confirm that the legal description of the unit (and if applicable, of the parking and locker) is given on the Agreement of Purchase and Sale. After a thorough review of the Status Certificate, your lawyer should be able to tell you whether any increase in the common expenses or any special assessments are expected in the near future, whether the condominium corporation is involved in any litigation and what the balance of the reserve fund is. Many condominium corporations have specific rules relating to pets, short-term rentals, smoking etc. and your lawyer should be able to draw your attention to these.
What are some Red Flags in a Condo Status Certificate?
If the Seller is in default on the payment of common expenses, then this will be stated on the Status Certificate and your lawyer will have to ensure that all common expense arrears are paid on or before closing. The Status Certificate will disclose when the last reserve fund study was completed and what the estimated increases in the contributions to the common expenses will be over the next 3 years. If the condominium corporation is involved in any litigation, that will be disclosed in the Status Certificate. If there are any special assessments which have been levied against the unit or are expected to be levied in the near future, this will be disclosed in the Status Certificate.