Archive | August, 2012

Registration

August 29, 2012

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Way back when we first started this blog, almost exactly a year ago, I wrote this post on what a real estate lawyer does. Today, I thought I would expand on the last point I haven’t already: what exactly is registration?

In Ontario, we have electronic registration through Teraview. In order to close a deal, both lawyers sign it electronically, and then the purchaser’s lawyer registers the deed. When that happens, it is sent electronically over to the Land Registry Office, where the registration is checked to ensure there are no errors and then filed. From that moment, if I want to find out who is the owner of a property, I can enter the address and look it up to see what is registered on title. Mortgages, easements, restrictions, etc. are all registered the same way.

Cesia

Cesia is a real estate lawyer at Wall-Armstrong and Green, a boutique law firm in Barrie focusing on real estate and estates. When she’s not online, she can usually be found in her garden.

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10 Closing Costs When Buying a Home

August 27, 2012

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Article courtesy of Genworth Canada.

 

  1. Land transfer tax. When a home changes hands, many provinces and a few municipalities charge a property transfer tax or title transfer fee. Rates are usually on a scale of 0.5% to 2% of the home’s value and can add thousands to your purchase price. First-time homebuyers qualify for rebates or exemptions in some provinces.
  2. Appraisal fee. Your lender may ask you to have a home appraised to confirm its market value. Fees vary depending on a property’s value and complexity, but are typically around $400.
  3. Legal fees. A lawyer or notary will help protect your interests by reviewing your purchase agreement, searching the property title, and ensuring that all documents are completed properly. Basic legal fees start between $500 and $800, plus disbursements, with added services as needed.
  4. Home inspection. An inspection can help make you aware of issues related to a house’s structure and systems, such as plumbing and electrical, and recommended or necessary repairs. Fees range from about $350 to $450.
  5. Home/fire insurance. Your lender will require proof that the property is insured in case of fire and other damage. Insurance costs vary, depending on the coverage needed, but budget for at least $500 a year.
  6. Costs for newly constructed homes. If you’re buying a brand-new home, be prepared to settle any items not quoted in the original price, including upgrades or paving and landscaping fees. New homes are also subject to 5% GST or 13% HST, although this is often included in your purchase price. A federal rebate reduces the GST or the federal part of the HST to about 3.5% for homes valued at $350,000 or less.
  7. Prepaid costs. If the seller has paid property taxes, water bills, or utilities in advance, you’ll need to reimburse these at closing. This can add hundreds to your upfront costs, but means these bills will be paid for your first months in your new home.
  8. Tax on mortgage insurance. If you have less than a 20% down payment, your lender will require that you obtain mortgage default insurance. You can roll the cost into your mortgage payments, but the PST is due at closing. For example, if your mortgage insurance is $5,000 and the PST is 8%, you’ll pay $400.
  9. Title insurance. Title insurance can safeguard you against fraud and problems with your property title or survey. Fees range from $150 to $350.
  10. Moving-in costs. Before the big day, budget for all those last-minute things: $100 or more to rent a van or a few hundred for professional movers, $50 to $60 for a locksmith to rekey your locks, and cleaning supplies. Such incidentals can easily come to $500 or more.

Tim

Tim is a mortgage agent in Barrie who specializes in helping first-time home buyers. He works with a variety of lenders and can help customize a mortgage with the best rates & options that fit the needs of each customer.

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Going digital

August 22, 2012

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In Ontario, all real estate transactions are done through the electronic registration database, otherwise known as Teraview. Everything is done electronically: preparing deeds and mortgages, signing them, and registering them. So why do you have to sign so much paper when you are buying or selling a house?

The main issue is being able to give proof to a seller or buyer that you have in fact approved of the terms of the agreement. There is currently no way to do so electronically, and so we have to have you sign many documents before we can complete your purchase or sale.

Cesia

Cesia is a real estate lawyer at Wall-Armstrong and Green, a boutique law firm in Barrie focusing on real estate and estates. When she’s not online, she can usually be found in her garden.

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Mortgage Monday Rate Update – August 2012

August 20, 2012

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Whether you like it or not, stats and numbers are a part of the world of mortgages. When rates change even the slightest of percentage points, it could cost or save you thousands of dollars. Every once in a while, here on the Mortgage Monday posts, I’ll update you on what’s going on in the world of mortgage rates. If this kind of stuff doesn’t really interest you, I won’t be offended if you just skim through it – I’ll try to make it as painless as possible. 😉

  • The Bank of Canada interest rate continues to hang out at 1.00%.  Not a big surprise here.   Next meeting date is on September 5th, 2012.
  • The Bank of Canada prime lending rate is also holding steady at 3.00%. It has also been holding steady since Fall 2010 – if the bank rate goes up, the prime lending rate will follow.  At the earliest, we’re probably looking at late 2012/early 2013.
  • The qualifying rate (the rate you would need to qualify at for a variable mortgage) for a 5-year mortgage is still at 5.24%.  Not many folks are getting into a variable mortgage these days (though we’re starting to see some better rates in the variable department now).
  • The current best variable rate (changes daily) is in the prime-0.35% (2.65%) ballpark, though many lenders are still currently offering ‘prime’ as their variable rate.
  • The current best 5-year fixed mortgage rate (changes daily) hasn’t really moved around much and is still in the are of 3.09% – again, always contact your mortgage broker for current best rates for your situation (and as we’ve talked about previously, The Best Mortgage Rate is Not Always the Best Option).
  • The “hot term” in Canada these days is still the full-featured, 10-year fixed mortgage with rates as low as 3.99% (check out my post from a couple of months ago on the 10-Year Mortgage Below 4% and a more recent one: Should You Consider a 10-Year Mortgage?). If you want to lock in for a decade and record-low rates, definitely take a look at locking in for 10 years at less than 4%.

If you’ve been following along with my rate updates, this has probably been one ofmthe most boring to date.  Essentially, none of the numbers have changed from last month other than the variable rate becoming a little more competitive again – though some of these numbers can change monthly and even daily. While I’m happy to provide an update on what’s going on as rates, if you’re interested on getting personalized mortgage advice, speak to your favorite mortgage broker who can help you decide the best rates and options for you.

Tim

Tim is a mortgage agent in Barrie who specializes in helping first-time home buyers. He works with a variety of lenders and can help customize a mortgage with the best rates & options that fit the needs of each customer.

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Choose wisely

August 15, 2012

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Today, I thought I would blog about something that’s been taking over my life a bit lately: the busy summer season and choosing your closing date.

It is traditional for real estate to be busy in the summer; people frequently go house hunting in the spring once the weather turns nice, and the deals close 4-6 weeks later. We are always (very gratefully, I should add) busy from May until September with closings. What I wanted to specifically talk about today was choosing the day you close, rather than the date.

Most people want to close on Friday, because they can have the whole weekend to unpack and sort before going back to work. Long weekends are particularly attractive, because they offer three free days. However, there are distinct advantages to closing on a different day of the week:

  1. Your lawyer will be less busy. If you are the only deal I am closing on a Tuesday, I will have your deal closed the moment your money arrives. If I have ten deals closing the same day, simply because there is only so much time, I will have to wait until two or three are ready to go at once before I can go to the bank.
  2. One day of delay vs. three (or four). No one likes to think of the worst case scenario, but sometimes it happens: there is a power failure at the bank, or for some other reason your money doesn’t arrive before the end of the day, and we cannot close your purchase. In that situation, if you were scheduled for a Wednesday, we can close Thursday morning. If you were scheduled for a Friday before a long weekend, you’ll be stuck in a hotel until Tuesday.
  3. Moving may be less expensive. Trucks and other moving services may offer a discount if you move your things over on Thursday evening instead of Friday. You can always wait to unpack until the weekend rolls around.

If there is a particular reason you want to close on a Friday, by all means do so – your closing date should be as convenient as possible. However, it is worth considering other days of the week in order to make the closing go maybe a little more quickly.

Cesia

Cesia is a real estate lawyer at Wall-Armstrong and Green, a boutique law firm in Barrie focusing on real estate and estates. When she’s not online, she can usually be found in her garden.

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