11 Dec

Five Things to Know Before Purchasing a Rural Property

Home Purchase

Posted by: Jack Dawson

Five Things to Know Before Purchasing a Rural Property

.Buying a Rural Property

 

Buying a rural property can be appealing to a lot of people. Whether you’re looking for more land for your dollar or want to get away from the city, buying a rural property can be appealing for many people. However, there are a few important items to check off when looking to purchase your piece of country living.

Zoning

It’s important to check the zoning before purchasing any property. This will determine how you’re able to utilize the land,  what kind of buildings are allowed, and how they can be placed. Zoning could affect your lending options and what you’d qualify for, as well as what you could do with the property. Because of the lending or foreclosure process differences, some lenders may be hesitant to finance mortgages in agricultural or rural residential zones.

Property Boundaries

Once zoning is determined, the next important item to look at is the land itself. A legal survey requisitioned early in the process will mark your property’s exact boundaries to avoid future disputes.

Lender Policy

Many borrowers don’t realize the effect land has on lender policy. In fact, most prime lenders will mortgage one house, one outbuilding, and up to ten acres of land on a given property. If you have a second building or extra land purchased, you may need to consider alternative lenders.

Water and Sewage

Many people draw water from private wells when it comes to rural living and utilize septic tanks for sewage. To ensure everything is safe and in working order, it’s advisable to inspect the septic tank and water quality as a condition on the purchase offer. Due to the nature of rural properties, inspections may cost more than they would within a city. However, it is important as they may be a lender requirement.

Insurance

When it comes to rural properties, there are two types of insurance to consider:

Home Insurance – This may cost more than insuring city homes due to the size and location of the land and distance from fire stations and hydrants.

Title Insurance – This is vital for rural purchases and will protect you from unforeseen incidents with the deed or transfer. It will also alert you to any improper previous use of the property (such as dumping for waste).

If you are thinking about purchasing a home in a rural area, be sure to consult a mortgage specialist beforehand. They can often recommend a realtor who specializes in rural properties and knows the area best. A mortgage specialist can also help ensure you understand any differences in the mortgage process and qualifying that come with rural purchases.

4 Dec

Six Steps to Home Ownership

Home Purchase

Posted by: Jack Dawson

It never hurts to see where you stand when it comes to buying a home, and a mortgage specialist will let you know what you can qualify for, or what you’d need to qualify for the home you plan to purchase. Outlined below is the entire process broken down into six steps.

STEP ONE: Not just how much but how much is enough. Work with a mortgage specialist to find out how much you qualify for and what you should budget for.

STEP TWO: Let the hunt begin. Work with your favourite realtor to find the perfect home for you.

STEP THREE: Accepted Offer: Your Realtor has worked for you to negotiate favourable terms and purchase price, and your offer has been accepted! Now you have the time laid out in the contract to remove subjects such as “subject to financing” or “subject to inspection” and need to work with the right professionals to ensure you’re satisfied and subjects can be removed.

STEP FOUR: Subject Removal: This is an important day. Your mortgage broker and realtor have been working diligently with you to make sure all your conditions can be removed safely. Usually, once the subjects are removed, you will have 24 hours to submit a deposit held in trust by the buyer’s real estate brokerage. Your mortgage should now be fully approved with all required documents signed off on by your broker and lender. Once you remove your subjects and conditions, your deposit becomes part of your down payment and is the owner’s property if you do not complete the transaction.

STEP FIVE: The Fine Print: Once you have finalized all your mortgage financing requirements, your official legal documents are off to the lawyer or notary. You will want to see them preferably a few days before the closing date so that all legal arrangements can be met in time. Your lawyer will compile all your closing costs and finalize the transaction.

STEP SIX: You’re home: On possession date, your realtor will meet you with the keys to your beautiful new home and a big warm smile. Congratulations!

20 Nov

Benefits Available for First-Time Home Buyers in Canada

Home Purchase

Posted by: Jack Dawson

There are several benefits available in Canada for home buyers, given the home buyers and subject property meet the criteria required for each benefit. Below are the four means available to possibly help in the purchase of a first property.

 

Home Buyers’ Plan

Up to $35,000 can be borrowed tax-free from your RRSP to go toward the down payment. You have up to 15-years to repay, with minimum repayment periods starting the second year after the year when you first withdrew these funds, i.e., if you withdrew funds in 2021, your first year of repayment would be 2023. Any minimum amount not repaid during a repayment period will be considered taxable income. Further details here.

 

Home Buyers’ Amount

 A tax credit of $5000 can be claimed by a sole purchaser or between two co-purchasers. If eligible, this credit will provide up to $750 in federal tax relief. Further details here.

 

First-Time Home Buyers’ Incentive

The Government of Canada can loan 5% (or up to 10% if the property is new construction) of the value of your home and retain an interest in the same percentage of the value as it changes over time. The home must be owner-occupied, and after 25 years, or when you move or sell your home, the loan must be paid back in full in the same percentage of the current value of the home, i.e., if you received a $25,000 loan for a $500,000 home, $40,000 would have to be paid back if it sold for $800,000. The limiting factor for most people here is that the loan amount must be no more than four times your qualifying income, so a home buyer would need an income of $100,000 per year to take on a $400,000 loan. Further details here.

 

First Time Home Buyers’ Progam

If the property purchasing is valued at $500,000 or less, first-time home buyers can be completely exempt from paying property transfer tax. Partial exemptions can be in place for homes from $500,001-$525,000. Any home purchased above $525,000 is subject to full property transfer tax. Further details here.

 

As with any government program, it’s important to read each benefit’s specific criteria to ensure that you qualify beforehand.