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Do You Know the Answers to These Questions?
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What is, being "Pre-approved"? |
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When a purchaser has been "pre-approved" for a mortgage, the lending institution
has already analysed his or her financial situation, and determined the amount of
money they would qualify for. This amount, plus your down payment, will give you
an idea as to how much you are able to afford in the purchase of your home.
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What benefit do I have by being "pre-approved"? |
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Besides knowing your comfort level of affordability, being "pre-approved"
could help in the presentation of your offer. For example, if there are two offers
on a property, the offer that has the best terms and conditions for the owner, would
be accepted. Thus, if both offers were identical, except for subject to financing,
the offer without the subject would be looked at more carefully by the owner. Because
you are "pre-approved", it would not be necessary for you to put a subject
to financing clause in your offer. It is important you have a letter from your lending
institution confirming your approval.
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Is the term and amortization of a mortgage the same? |
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No. The term of a mortgage refers to the period of time that your interest rate is
calculated before renewing. For example, 6 month, 1 year, 5 year, etc. Before the
pre-determined term expires, you renew at the current rates in effect at that time.
The amortization of a mortgage means the number of years (or months) that it takes
to repay the mortgage by making regular mortgage payments. This is calculated with
the current rate of interest you have chosen with the term. Then your payments (principle
and interest) are blended over the amortization of the mortgage.
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How can I reduce my mortgage without penalty? |
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Talk to your lending institution to find out, in writing, what pre-payment privileges
you are allowed on your mortgage. Some pre-payment privileges that may be available,
are:
- Paying an extra 10% of the original amount of the mortgage, or less (every little
bit extra, saves), on each yearly anniversary date.
- Making bi-monthly payments instead of one payment a month.
- Reducing the amortization period upon renewal.
By taking advantage of these privileges, you could save thousands of dollars in interest
over the life of the mortgage, and own your home quicker
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What expenses could I have when I purchase Real Estate? |
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Here are a few:
- The Property Transfer Tax of 1% of the 1st $200,000 and 2% of the balance. (First
time buyers may be exempt)
- Lawyer, appraisal, survey, inspection, mortgage application fees must be paid
in cash on completion.
- Mortgage Insurance fees, may be added to the mortgage principle.
- Any statement of adjustments calculated by your lawyer (taxes prepaid by owner,
etc.).
This is a basic expense list. Each property purchased will have
different expenses. Check with the appropriate authorities, or better
still, ask a RE/MAX 2000 Realtor to assist you.
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Should we use several Realtors in our search for a property? |
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Generally speaking, sit down with a few Realtors and discuss your plans and what
it is you are looking for. After the initial meetings, try to select a Realtor that
you feel most comfortable with, and arrange to view properties with him or her.
By using one Realtor, you may reduce the time necessary to find that special property,
because that Realtor will know and understand your wants and needs, thus you will
avoid viewing unnecessary properties. Also, when you have found that special property,
you and your Realtor will have established a rapport, and you will feel more comfortable
in making an offer with someone you have spent a lot of time with, and who understands
your financial situation.
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How do we establish "value" in making an offer? |
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After viewing properties that best suit your needs, you will develop
a sense of value of one property over another. Your Realtor will also
assist you in determining an offer, by showing you comparable sales
or similar properties for sale now, thus establishing a range of values
for the property you are interested in. When you are ready, your RE/MAX
2000 Realtor will write an offer with the proper terms and conditions
that suit your needs, and negotiate with the seller on your behalf. |
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