Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Balancing mortgage rate (Comstock Images/Getty Images/Comstock Images)
Balancing mortgage rate (Comstock Images/Getty Images/Comstock Images)

Book Excerpt

Home ownership isn't for everyone Add to ...

Another important decision to make is choosing a location that is right for you. You have surely heard it before: real estate is all about location, location, location. When you decide where to live, consider whether you want to live in a city, suburb, or rural area. Think about where you work and how easy it is to commute, how close you are to your friends and family, and your proximity to recreational facilities. Many people who buy in the country eventually move to the city because they can no longer tolerate driving for hours every day to get to services and shops. If you have children, look at the schools in the area. Unfortunately, there is no guarantee the school board will keep your local school open, which may mean inconvenience for you and your children, and a lower resale value for your house.

Location is important to consider from the marketable point of view. How easy will the resale of your home be in the future and what is the market increase in the value of the home in the area.

Surround yourself with a good team of professionals throughout the process of finding, evaluating, and buying a home. Your real estate agent will play very important role finding a home. That agent will provide you with the information about the community, arrange the home inspection, write the offer, and negotiate the final price with the seller. Do not hesitate to ask questions about the agent's services, especially about possible service charges.

Normally, the seller pays a commission to the real estate agent. When you are a buyer, just make sure that you do not incur any expenses. If you are selling your home, do not hesitate to negotiate the commission. Typically, the commission is 5%, but that is not set in stone. You can ask your real estate agent for a lower commission charge, especially if you have used the person's services before. The trend these days is selling your home through private sales websites. You will pay a small amount to list the property and save a lot on real estate fees.

Remember, as a buyer, any real estate agent involved in the transfer of a home from one owner to another is actually an agent for the seller. The agent makes income based on the value of the sale. If an agent can get both sides of a deal, he does really well. If he has to split the commission with another broker, that's his loss. So, real estate agents often want first to sell houses for the highest price they can get someone to pay and to sell houses they themselves have listed for people who want to sell.

Please visit the Canadian Real Estate Association website at www.crea.ca to learn more about a real estate agent's ethical and professional obligations.

The Lender or Mortgage Broker

Many different institutions lend money for mortgages, including banks, trust companies, credit unions, pension funds, and insurance companies. Typically, you will go to the bank where you hold most of your portfolio to get pre-approval for a mortgage. Do not be so sure that place is your best option. Ask them for the best mortgage rate-remember to tell them not to check your credit score. Then, ask institutions what their best rates would be for the same terms-again, do not disclose your credit information yet and do not authorize a check of your credit score. You could be surprised at the results.

When you find the best interest rate, you can proceed with the pre-approval for your mortgage. This will give you details about your maximum purchase power, monthly costs, and insurance cost (if applicable). You will also be able to guarantee you the interest rate for some period (likely 120 days) to protect against rising rates.

A mortgage broker is another option. These people do not work for any specific lenders and their role is to find for you the lender with the best terms and rates. Make sure you find a good mortgage broker by asking friends and family for referrals. You can do a search on www.caamp.ca or call 1-888-442-4625 to find about a broker's credentials, obligations, and service provided.

A mortgage broker is paid commission by the lender. Make sure to ask about any charges applicable to you. When you contact you're the broker you intend to use, please make sure the person do not give them your social insurance number (SIN ) or your credit score before you are sure that person is your best choice. The good news is that when mortgage broker checks your credit rating, one report will be used for all lenders on the market.

Report Typo/Error
Single page

In the know

Most popular videos »


More from The Globe and Mail