Help Me Find a Home

Gurnek - Credit Specialist

A credit bureau score is used by banks, or other companies - like cable providers, insurance companies or landlords - to determine how risky it is to do business with you. It gives them a picture of how well you manage your money because it's based on information pulled from all the lenders you do business with. The better the credit score, the more attractive you are as a client. And this means you're more likely to qualify for that loan or mortgage you're applying for, or even to get a preferred rate or package from a cell phone company. So how does it work exactly? Well the first time you borrow money, a credit rating report is created. They are maintained by credit reporting agencies and include whether you've paid your bills on time, whether you've missed payments, and what your outstanding debt is. Over time, this data will form a pattern of how well you pay - or don't pay - your debt. Information that appears on your credit rating is kept for 7 years. This is why it is important that you pay all of your bills on time, even the ones that seem small and insignificant. And even if it is just the minimum payment. Regularly staying on top of your bills reflects a good pattern of behaviour. If you often - or even sometimes - miss bill payments, this can negatively impact your credit score. And a lower score means you're less likely to qualify for financing down the road. If this is a concern, consider setting up automatic transfers on payday so you don't let a payment slip by. Your credit score is your score. It is good to know what your current score is. You can request a copy of your credit report from either of the two agencies in Canada - Equifax or TransUnion. It's actually a good idea to review your credit report once in a while, in case of any errors or fraudulent activity. If you keep on top of your credit information, and maintain good credit habits, you'll benefit in the long run.

Victor - Mobile Mortgage Specialist

If you haven't been a homeowner before, there is a program available from Revenue Canada that allows you to withdraw money from your RRSP, up to $25,000 per person or $50,000 per couple, in order to purchase your home. This is a great option for you if you're struggling on the decision on whether to rent or own. You have the ability to tap into some resources in your RRSP and perhaps avoid paying a default insurance premium by having 20% down or more. It's very important to make sure that it's the right time to withdraw and that we're really exhausting all other alternatives for a down payment before we immediately go to withdrawing RRSPs as the only solution. This withdrawal is repaid over fifteen years, so you would repay one-fifteenth a year minimum to your RRSP and not have any tax disadvantages from taking that withdrawal from your RRSP. By working with us as an RBC mortgage specialist, we'll make sure that we bring in the right financial advice either through a financial planner or an investment advisor to help make the decision that's right for you and your family.

Leanne - Branch Manager

Expense wise, there's more to owning a home than just the mortgage payment every month. Home ownership costs fall into two categories: one time costs and regular recurring costs. When it comes to some of the one time costs, here are a few examples you can expect to pay at or around the time you purchase your home. You will incur: closing costs and additional home costs like legal and appraisal fees. Your lawyer or notary will be able to give you details. Whether you've hired movers or you do it yourself, there will be expenses associated with your move. Then you need to think of all the things you want and need to make your new home feel like home. Everything from decorating the interior to exterior enhancements. These things all add up. As for recurring costs here are some of the things you can expect to pay monthly: your mortgage payment is probably your largest monthly cash outlay and is dependent on the amount you finance, the term, rate and amortization your payment schedule. Work with your lender or mobile mortgage specialist to help determine what's right for you and your budget. Depending on your location you'll receive a property tax bill 3 or 4 times a year. You can pay your tax bill: by cheque, through online banking or an automatic debit from your account. Your lender will require that property insurance is in place at time of closing but it is important to note that this is ongoing expense as long as you own your home. If you buy a condo your costs will most likely include a monthly fee to help pay for maintenance and upkeep of the common and public areas. Some municipalities integrate school taxes into your property taxes, others collect them separately. Check with your local municipally to find out what process they follow and of course, there's utilities and maintenance. A well maintained property helps to preserve your home's market value and enhances the neighbourhood. Maintenance can range from lawn care and snow removal to roof repairs and regular heating system maintenance. To learn more about the cost of home ownership, visit our website at the end of this clip for some great advice and money saving tips.

Mortgage Basics: Conventional or low down payment?

Another consideration for first-time buyers is whether to choose a conventional mortgage or a low down payment mortgage. It's generally a decision dictated by the size of the down payment you are able to put together. A conventional mortgage requires a down payment of 20% or more. If you are putting down less than 20% (the minimum is 5%) your mortgage is referred to as low down payment or "high ratio" and the Government of Canada requires that you have something called "mortgage default insurance." In simple terms this kind of insurance protects your lender against "default" - which most often means the borrower not making their mortgage payments. Because low down payment mortgages must be insured to cover potential default their carrying costs are higher than a conventional mortgage because they include the insurance premium. This amount is charged as a one-time premium on closing. It isn't necessarily an amount you have to come up with all at once - it is often added to the total amount of your mortgage at closing, making a small change to your monthly payment costs. The premium - as well as any applicable provincial sales tax on it - will be calculated for you so that you have no surprises on closing day. Your RBC mortgage specialist will work with you to help you determine the down payment that's best for your unique situation and show you all of the costs associated with any choice you make.

Gina - Account Manager

If you're serious about purchasing a home, getting a pre-approval that actually puts your mind at ease because then you know exactly what you're working with. A lot of us, when you're looking to buy a house, have an idea of that ideal home, the white picket fence, the big backyard, the swimming pool potentially. But can we actually afford that home? Getting pre-approved will set your benchmark or your price range, so you're not wasting your time and you're not getting disappointed down the road when you see the house of your dreams and find out after the fact that you can't afford it. Sitting with an RBC mobile mortgage specialist will give you that peace of mind and the confidence when going in to purchasing a home, you'll know exactly what the process is and exactly what's expected of you so that you end up with the house of your dreams and the mortgage to finance it. They can help you walk through the entire process from the down payment to all the other expenses that come up with home buying like land transfer tax, lawyer fees if there's real estate commission, to the mortgage payments, whether they're monthly, biweekly, the benefits of picking a certain payment schedule and then once you've signed that purchase agreement what the next step is. Coming in to get a pre-approval is a no-cost, no-obligation process. What it does do is provide you with information and ease your mind so that you have confidence when you're looking to buy that home.

Buying your first home is exciting, at the same time it can be a little overwhelming and while it's easy to get carried away with the thrill of stepping into that perfect space for the first time, it's important to remain level headed about the home buying process so that you spend within your means.

As great as owning your own home is, you'll want to have a life too. As you look at your housing options be sure to consider all of the costs associated with owning a home. First, there's your mortgage of course. If you're currently renting, be careful not to automatically think that your mortgage amount can equal your rent with the same financial impacts. For example, there may have been costs that were included in your rent such as heat, cable, electricity, which you'll now have to pay separately. And as a home owner you'll incur other regular expenses like property taxes, cost to maintain your home, and if your buying a condominium, condo fees.

You'll also want to think about the first things you'll need to buy for you home. Like do you need a lawn mower? What about window coverings or light fixtures? Individually these items aren't too expense but they can add up quickly. It's also very important to take a look at the state and age of your furnace and appliances. If they are old or need to be repaired or replaced soon, you will want to set funds aside. In fact, having an emergency fund for unplanned expenses is smart, if not essential.

Once you have your home expenses figured out, think about your life style, what's important to you? Do you have a passion for travel? What about sports, dinning out, entertainment, or other activities that cost money? Once you become a home owner you want to be sure you still have money available to enjoy the things that are important to you. Taking into consideration all of your expenses, home related or not, is important if you're going to find the right balance between owning a home and maintaining a fulfilling lifestyle.

Buying a new home is very exciting event and likely one of your biggest financial investments. Before you buy your home, consider if the home needs repairs, or is a higher insurance risk. You may be able to negotiate a lower purchase price, based on anticipated expenses. For example, some things to consider are...

+ Older homes with aluminum, or knob and tube wiring could be considered a fire risk and can increase your insurance rates.

+ A home with oil heating can be an environmental liability risk.

+ Both of these things can be updated to reduce your insurance costs, but they may be expensive and should be factored into your final costs.

+ Another consideration is whether the home you want to purchase has a history of water damage. Certain areas are known for flooding and sewer back-ups which could increase your insurance rates, so you may want to adjust the purchase price accordingly.

+ Before you make your final decision, be aware and ask questions, what you learn could help you save money and ensure you pay the right price for your home.