Buying a home can be exciting, especially if it’s your first time. It can also be complex and frustrating because of the many steps involved. However, with the help of an experienced real estate lawyer, you can make the process seamless and secure your investment.
While you may know the basic steps of downpayment, pre-qualification, offer, and closing, do you understand what these steps entail? Below we delve into four important aspects of the home-buying process that every first-time buyer should know.
A Deposit and a Down Payment Are Not the Same
This may come as a shock to you, but a deposit and a down payment are different. The deposit is the amount paid ─ usually within 24 hours ─ after your offer to purchase has been accepted. While the deposit goes towards the down payment, the down payment is the amount you must have to secure a mortgage. Down payments are generally expressed as a percentage of the overall cost of the property. In British Columbia, Alberta and Ontario the minimum down payment is 5 percent of the cost of the property. However, if you can put forward 20 percent of the total, you may not be required to pay mortgage default insurance. This usually ranges from 2.80 to 4 percent.
You must have a stable income
Before going on MLS to look at homes, you must determine whether your income is stable enough to support the financial demands of owning a home. Unless you’re making your purchase without a loan, your income will need to be able to cover your mortgage payments when all your other expenses are considered. Whether you are self-employed or employed, banks and other mortgage lenders will require that your income be sufficient to cover your monthly payment and other expenses.
Getting Pre-Approved Is Important
The pre-approval step of the home-buying process is important, but it is not a requirement. A pre-approval is a document from a mortgage lender stating that you have met the standard for a mortgage based on the information you provided. Although it is not necessary, pre-approval helps your chances of securing the home you want. It lets the seller know that you have secured a mortgage subject to certain conditions being met. Read your pre-approval document carefully to understand these conditions. It’s always a good idea to contact a real estate lawyer who can explain any legal aspects of the document.
Your Closing Is Just as Vital as Your Offer
The closing process of buying a home is just as crucial as your offer being accepted. Working with a real estate lawyer will ensure all is in order, legally, before you sign on the dotted line. They will gather the relevant information on the property, such as title details that could potentially affect the deal. After doing the necessary checks, they will then prepare closing documents to ensure the agreement is ironclad and protects your interests. A real estate lawyer can also make arrangements for key handovers and funds transfers.
Thinking of Buying a Home? One80 Law Can Help!
If buying a home is your dream, One80 Law Group is here to help you make that dream come true. Our team of experienced legal professionals will guide you through each step of the process to ensure your investment is protected. We offer comprehensive real estate services designed to make the home-buying process seamless.
Complete our contact form to schedule a consultation today! Your dream home awaits.