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(October 1, 2021)

Intro (pre-amble): up to 7:05 mark of podcast (Rent vs Buy debate…is it even up for debate? | how much mortgage will $100,000 get you? | Interest rates went up last week | 15,000 Canadians relocated to BC | $250,000 over asking!? …wtf)

Be aware of the minimum down payment requirements

5% up to $500,000, then 10% on the balance thereafter up to $999,999
20% for $1M purchases up to $2.5M, then 40% on the balance thereafter

2. Be aware of closing costs

Closing costs are ancillary expenses throughout the process of completing your real estate transaction. In addition to your down payment funds, the lender will also request document verification for closing costs. All of the following costs are out-of-pocket and not included in overall mortgage:
- Pre-Closing Date Costs: Home Inspection Fee ($200-$400), Home Appraisal ($300-$400)
- Closing Date Costs: Land Transfer Tax (this will vary depending on city/municipality). In British Columbia, the property transfer amounts to 1% of the first $200,000, then 2% on the amount over $200,000 up to and including $2M, and 3% thereafter (i.e. for a $900,000 property purchase, your Land Transfer Tax would amount to $16,000). If you are a Temporary Resident in Canada and want to purchase in Vancouver, you will also be subject to an additional Foreign Buyer Tax of up to 20% of the purchase price (the foreign buyer tax does not apply to all Canadian cities, it is primarily applied to Canada’s higher priced markets; Vancouver, Toronto and surrounding areas). Legal Fees and disbursements (at least $1,200), Title Insurance ($100 to $300), and potential reimbursement of Property Taxes to the previous home owner if they have already paid in full for the prior year.

3. Be aware of all available First Time Homebuyer Programs and Rebates: (the following pertains only to BC First Time Homebuyers)

Government of Canada First Time Homebuyers Program (helps reduce your overall monthly mortgage payment)
First Time Home Buyers’ Tax Credit (take advantage of a $750 tax rebate)
Home Buyers Plan (use up to $35,000 of your RRSP for downpayment without tax being withheld from your RRSP issuer)
GST New Housing Rebate (receive GST rebates on newly constructed homes)
BC First Time Home Buyers Program (partial or full exemptions on Land Transfer Tax up to $525,000 purchases)
Home Owner Grant (tax relief on annual Property Taxes)
Newly Built Home Exemption (reduces or eliminates the amount of property transfer tax for newly built homes up to $800,000)

4. Get pre-approved for a mortgage and make sure it is LEGIT!

Do not confuse a rate hold with a pre-approval (rate holds simply reserve an interest rate and are not adjudicated)
Your pre-approval is legit, if:
- you have provided income documents (pay stub, employment letter, etc)
- you have verified your source of down payment (bank statements, gift, etc)
- you have provided consent to have your credit checked

5. Use a Realtor!

an offer on a property is considered to be a CONTRACT. Realtors are certified, trained and specialized in reading and interpreting Purchase Agreement contracts. Take advantage of their advice and guidance as they have a fiduciary duty to act in your best interests.

6. Have your down payment proceeds sorted and ready when you place an offer

upon removing conditions on your offer, prepare to expedite your deposit funds immediately thereafter to secure the deal (deal with all the administrative steps of withdrawing your money ahead of time, not on the day its required)

7. Request financing conditions in your offer (for at least 5 days)…even if you have a LEGIT pre-approval!

submitting an offer on a property without financing conditions is never recommended (unless you are purchasing with cash, outright)
pre-approved mortgages are not formally underwritten until an offer on a property is placed at which time your mortgage application (pre-approval) becomes, live. Therefore, do not assume you are 100% bullet proof with a legit pre-approved mortgage. Pre-approved mortgages are simply a strong precursor to the outcome of a formal and successful mortgage approval.

8. Once your offer is accepted, the clock starts ticking…be ready, available, and cooperative.

when an offer is presented and accepted with conditions (financing, home inspection, etc) it’s go-time! Be responsive and react to document and information requests as promptly as possible – time is of the essence.