pdf To: Richard Desrocher From: Diamond Calara Date: October 11, 2011 Subject: New home buyer As a recent college graduate panning to buy your first house in the Toronto area, I have provided information on how you can carry out this plan. There are is a twelve step process to buying a home that I will be explaining and providing further information on. I include information on various participants that play an important role in buying your first home. Along with paying for the cost of their services there is also other costs involved that need to be taken into consideration before purchasing a house. To start off, below is the twelve step process on purchasing a home. These steps will prepare and guide you in the direction that needs to be taken upon completing a successful purchase. Twelve Step Process: Step 1: Making Sure You Are Ready to Buy Purchasing a home is not like going shopping for smaller everyday items. Aside from being the largest purchase you may make, it is also the biggest financial ongoing obligation that requires making some sacrifices. Financially, are you responsible enough to handle the cost of purchasing a house? Upon newly graduating from college, it is essential to be an efficient saver and good at managing debt such as paying off student loans or credit cards. In addition to being financially capable managing previous or current payments, you have to be prepared to set aside a large amount of money or have accumulated a large amount of money for a down payment. Although buying a home may be intimidating, purchasing a home as a long-term investment, you are protected from short-term changes in the market such as fluctuations in interest rates. In turn, as time passes, real estate has almost always increased in value. Thus, when you have made your decision and are ready to purchase a house you will be moving on to step two of the process in buying a home. Step 2: How Much Can You Afford? Before choosing which house to purchase, you have to determine what houses are available for you depending on how you much you can afford. Knowing your true budget is the first and most important step in buying a home. With an estimate on your maximum affordable mortgage payments of principal and interest you will be able to determine the available houses to take into consideration. Using the following simple formula will allow you to estimate your maximum monthly total:

Areas such as:    Urban Suburban Rural with smaller cities and towns. This will determine whether you are approved for a bank loan for your mortgage. Step 3: What You Want to Purchase Once you are approved for a bank loan step three is determining what kind of home you would like to purchase. The second lending principle used. credit card and lease payments) should not exceed 40% of your gross monthly income. A home that is:       Single-family detached Semi-detached or linked Duplex Condo New resale Comparing and analyzing your options based on your wants and needs. The first lending principle is that your monthly housing cost should not exceed 32% of your gross monthly family income. This principle is known as the Gross Debt Service (GDS) ratio calculation. the Total Debt Service (TDS) ratio calculation. The contributing factors include the area you would like to live in. This can be determined using two lending principals. Step 4: Finding a Realtor .( ( ) ) With help on your mortgage you must determine how much a bank will lend you based on how much you can afford each month. it should narrow down choosing between the area and the type of home that will be best suited for you. decide what type of home you want. is that your monthly housing cost and payments on all of your other debts (including loans. Next.

Provide up to date information on financing and explain your mortgage options. Step 6: Sell home As you are going to be a first time buyer. In Canada. this step does not apply.Just as mentioned earlier there are carious participants that play a role in your home purchasing. Aside from the bank. you scope out which interest you the most and best suited. They ensure the highest level of service and treat their clients with honesty and integrity. licensed realtors are members of their local real estate board. Lawyers will help by:   Transferring ownership of land from one person to another making the legal transfer of the home a smooth one. you have to find yourself a realtor. Provide access to exclusive features of the MLS® Preview properties/potential homes to ensure you’re only shown homes that meet your needs and budget. a provincial association and the Canadian Real Estate Association. Step 5: What is Out There After your realtor has laid out potential homes. Realtors help by:        Reviewing your list of wants and needs and help you determine your price range. This is your position to review and analyze the homes from descriptions. Explaining legal terminology in plain language Step 8: Make the Offer . open houses and based on your objectives. Negotiate with the seller Deal with potential conflicts and draw up a legally binding contract. Answer questions about the markets you’re interested in and help you compare homes and neighborhoods. Step 7: Add a Lawyer Buying a home involves numerous legal documents and you need someone to translate the ‘legalese’ and ensure your best interests are protected.

If the seller is locked into a lower interest rate than you can get right now it is a more favorable idea. In a matter of time whether the seller will accept or reject your offer. The mortgage arrangement will deal with term. credit unions and other lenders out there and it is important to explore your options and different mortgage rates being offered. The realtor comes back in play by preparing and submitting the offer. If the offer was accepted the next step will be arranging a mortgage. Or your best mortgage might be the seller’s mortgage. When an offer is rejected the realtor will investigate for any misunderstanding or renegotiation. and interest rates. amortization. For example mortgage brokers are great resource who is highly motivated to get you the best deal since they usually don’t get paid unless you sign a mortgage through them. there will be additional costs on top of the house itself and the professional service from realtors and lawyers. one that the seller will accept. Step 9: Arrange Mortgage There are hundreds of banks. Below are a couple of examples of different mortgage rates different companies offer currently: (2) As mentioned. Other costs you will incur are as follows:      Application fee Appraisal fee Mortgage broker’s Land survey Home inspection fee .Upon finding the home you want you have to make a successful offer.

’ Although it sounds simple. there is still cost being incurred during this step. Step 12: Move In Lastly is to move in which is the date of the ‘closing date. Step 11: Close deal When satisfied with everything.       Home Insurance Title insurance Legal fees Adjustments Maintenance and utility costs Land Transfer Tax The GST and new homes Step 10: Hiring Home Inspector Additional professional help needed is a home inspector. In result. This process helps you really see what kind of condition the home is in. various participants of professional bodies and yourself along with costly expenses. As a first time buyer I recommend the above information provided to you and wish you luck on your future decisions. Home inspections range from a couple to a few hundred dollars and the service can save you from unpleasant surprises when moving in. Your realtor and lawyer will do most of the closing work and yours duties at a minimum. you have to close the deal. buying a home is a long process that acquires a twelve step process. Costs incurred are such as transportation including gas and truck rentals and any renovations. . Process running smoothly you will then receive the closing date.

n.ratesupermarket. Web.d. <http://www.p. N. "The Best Mortgage Rates in Toronto . 2011. <www.."Best Choice For Home Inspection in the Shreveport & Bossier City Area. 2." Rate>.>. . 12 Oct. n.p. N.d. "Best Choice For Home Inspection in the Shreveport & Bossier City Area.Work Cited 1. 12 Oct. Web.

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