Roadmap for new comers why and how to buy House in GTA
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| Roadmap for new comers why and how to buy House in GTA By: sarmaalo I am an IT guy and was not knowing anything about mortgage/house buying. Recently I bought a house after one and half year of immigration to Canada, and it is better than what I thought. Hence, I would to share my thoughts which might help or at least get a different perspective. article.php?id=266 |
Posted on: 15-02-07 13:46:07
Very informative post Alok.
The main thing I see that first time home buyers tend to under budget are the other carrying costs for the home (utilities, cable, telephone, water, insurance, maintenance etc.)
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Vimal Patel, Realtor
Homelife Royalcorp Real Estate Inc., Brokerage
Cell: 416-887-3745
Office: 905-856-6611
Fax: 905-856-6232
vimal.patel@gmail.com
http://www.vimalpatel.ca" rel="nofollow">LINK
Alok,
I have been in this business (Financing) almost 30 years and I find with time that homebuyers are more educated about the product and services as each year goes by.
you Alok have taken the cake!
As a trustee for your family's finances, you have been a good father & a husband.
Excellent job.
Please let me know( by privare email) if I can use your article in charcha for training purposes for the newcomers at my ofice.
thanks & kind regards
S Kanji
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S. kanji
I may not agree with your opinions, but I will fight to death for you be able to air your views.
Nice article man 
You covered most of the Realtor's stuff 
Good to learn that many other professionals complemented your work - real estate salesperson, mortgage broker/ bank, lawyer, home inspector, insurance professional etc. Hopefully that you had some good experience.
Good job!
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Amit Kalia, Broker, REALTOR®
RE/MAX Real Estate Centre., Brokerage
independently owned & operated
100 City Centre Dr, Unit 1-702
Mississauga, ON L5B 2C9
Phone No.: 905-339-5111
Website: https://www.realestate-ontario.com/
Condo Blog: https://condopundit.com/blog/
Good effort for putting down the experience in a organized way ( IT Guy way to go).
The most important credit rating section needs to be added.
Look like it is assumed here that most newcommers are from India but I see a lot from middle east which do not have the same economic situation and it needs to be considered.
-Mercury
Quote:
Originally posted by Mercury
Good effort for putting down the experience in a organized way ( IT Guy way to go).
The most important credit rating section needs to be added.
Look like it is assumed here that most newcommers are from India but I see a lot from middle east which do not have the same economic situation and it needs to be considered.
-Mercury
Hi Mercury,
Yes, the credit rating I assumed to be very good, and I missed it. The reason is I had always best credit rating.
Middle east people economic condition....how it is relevant here ? I mentioned that you have to calculate your financial strength before taking this risk. Appreciate if you can clarify more. May be I am missing something.
Regards
Alok
Must say, that was an invaluable wealth of info - Extremely commendable…
Quote:
Originally posted by sarmaalo
Quote:
Originally posted by Mercury
Good effort for putting down the experience in a organized way ( IT Guy way to go).
The most important credit rating section needs to be added.
Look like it is assumed here that most newcommers are from India but I see a lot from middle east which do not have the same economic situation and it needs to be considered.
-Mercury
Hi Mercury,
Yes, the credit rating I assumed to be very good, and I missed it. The reason is I had always best credit rating.
Middle east people economic condition....how it is relevant here ? I mentioned that you have to calculate your financial strength before taking this risk. Appreciate if you can clarify more. May be I am missing something.
Regards
Alok
Hi Alok,
Sorry for the delay as I was tied up. I will try to elaborate in a piece meal.
Why we need to buy it desperately -->
-Rent cost and mortgage payment cost varies somewhere between 25-30%. With a little bit of effort and very good planning you can buy house instead of wasting the money in rest. I was paying rent of $1100 x 12 = $13200 per year which was almost one fourth of my salary.
-Treat it as investment and think having a fixed shelter on your head as bonus. You should be willing to sell it after some years to go for a better house or move to a place near to your job location. But buy something now to start saving right away.
Mercury's comments- The mortgage payment will depend significantly with the down payment and that ratio of 25-30% cannot be applied as a rule of thumb but is is a good guideline. The new immigrants coming from the middle east can own a house in the first month with 35% down payment. They usually tend to save more as there are no state taxes.
House as an investment is good but again it depends on the market situation. I bought my first house for 200K 7 years ago. I checked the records, previous owner bought the same in 1988 for 290K. 92 crash was behind it. It appears to happen in a a cycle with unknown frequency. Housing market in the U.S. has starting falling dramatically. Canada is being lucky until now and I hope it will absorb the wave. With 80% dependency for trade it is more then likely it might happen here. So as far as market is concern you never know. I mean to say it is a risk now may be less risk 6 years ago seeing the volatility of the market.
Who can get loans?
-You must have a stable income, working and earning record for last 1 year.
-Shop around. All Banks and lot of financial institution are ready to give you loans. Use internet extensively for this.
-Spend some time to compare.
Mercury's comments - As I said, stable income for 1 year is not the only criteria. It varies with your debt situation, credit rating, down payment and stability in the same line of business (3 years is preferred). You have different product to deal with each situation. i would tend to say not 1 year earning record but you should be out of your probation period and preferably in the same line of business. ( i.e. a mech. engineer doing mail distribution then tried call center for a while is looked at differently).
Due to varying nature of individual circumstances many time people get surprises when they apply. That's where a mortgage brokek can help. Just like the real estate brokers for buying/selling. If you have good ratings and down payment you do not have to pay the brokers. You get only one hit in your credit rating and the broker can simultaneously shop around for the right product. For e.g. Someone came from the U.K. signed up for the cheapest rate and agreed to all other conditions to buy a condo. These person had intention to pay the full amount after a year which he did not reveal. He had to break the contract for 5 years and paid big fine. If he would have gone through a broker he would get a product which is open and fits his need.
Various avenues to get money -->
Mercury : Raise the income is bang on. It is easier done then said for big amount. part time/weekend jobs , I am not sure how far you can go with it. It is better to take up a job or ready ourselves for the same field job( Working professionals). Minimum down payment is not necessary good. As you know less then 25% is rated as high risk. If anything changes in the market, these people are usually first to loose the house. Getting line of credit is not an avenue to "get money". It is the debt you are incurring. You cannot use that for down payment and the financial institutes looks for your money and not borrowed. It also impacts your borrowing power for mortgage. Making sure you would be able to carry the mortgage through is the key. Credit cards are good for convenience but for emergency it is better to plan for the emergency funds.Yes, some banks give you the down payments but at a premium. Nobody is here for charity. There are hidden things which the brokers usually are aware of. Like the Real estate broker is recomended as you are protected should something undesired situation happen. You may have disputes also. They can guide you through thoose situations. Financial transactions are not always smooth. If you are one person who happen to be the victim the you would know how difficult it is.
-Plan to raise your income
-Get ready to put your spouse to earn something if needed and plan for it.
-Check whether you can do some partime, weekend work etc if needed for the time being.
-Check how much Line of Credit you can have and apply for it
-Check who can give you minimum down payemnt. Some bank gives your down payments too. Only $5000 you require to have.
-Get some credit cards applied for emergency
House selection -->
Mercury's comments: I try will get to it in the following post.
Alok, I am adding my 2 cents and not undermining you effort in putting the things together.
-Mercury
