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

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

The Lawyer/Notary

You need a lawyer (or a notary in Quebec) to protect your interests in the process of purchasing a home. This person will make sure the home you want to buy has no liens against it. He will review all the contracts before you sign them and give you a piece of mind ensuring the whole process of buying is smooth and legal. Shop around for the legal fees and rates when you are choosing a lawyer. Fees range widely and depend on complexity of the transaction. Make sure your lawyer is licensed full time lawyer/notary, familiar with local legal requirements, understands real estate law, and has reasonable fees. Again, referrals from other satisfied customers can be invaluable.

The Home Inspector

When you consider buying a particular home, make sure you hire a knowledgeable and professional inspector to inform you of the property conditions. He will tell you if anything is not functional, needs to be fixed, or if it is unsafe. Also, the home inspector can find if there were problems in the property in the past. Any repairs that need to be done should be done to your satisfaction before you buy the house or allowance should be made in the price you pay so that you can get the repairs done. Again, fees, qualifications, and services may vary from one inspector to another, and referrals can be priceless. Whatever you spend will likely be worth it in terms of peace of mind and protecting you against buying a lemon.

Not that you may even want to get two different opinions on a house you are seriously considering. Why not spend a few hundred dollars to keep yourself from spending tens of thousands on unexpected repairs. Have you ever watched the television show Holmes on Homes? Sometimes the homes he repairs have been inspected by people who missed major faults.

The Insurance Broker

Lenders insist that you maintain property insurance because your home is their insurance for your mortgage. Property insurance covers the replacement cost of your home, so premiums will vary depend on the value. House insurance is required by all lenders.

Your lender may provide you with mortgage life insurance, which is that pays out to your family (or designated beneficiary) if you die before the mortgage is repaid in full. The lender will add the premium to your regular payment. Life insurance is optional.

Make sure you compare rates between both an insurance broker and your chosen lender.

Do not confuse property and life insurance with mortgage insurance. On a mortgage where you have less than a 20% down payment, you will need mortgage insurance because the lender will be less certain that you fully intend to repay the amount you are borrowing.

The Appraiser

Appraisal may be required by the lender when you are buying a property so that the lender can be assured the price you propose to pay is reasonable and the lender won't get stuck with property worth less than the mortgage if you default on payments. This is assessment of the property, its physical condition, recent comparable sales, and the current condition of the local market. Appraisal fees can be between $250 and $350 for the typical family home. If you would like to spend money, this is a very helpful and good idea. The bank may require it of you, in which case you can try to negotiate how much of the fee you pay and how much the bank pays.

Tips on Mortgages

What you can afford is most important. If you don't have a budget, start listing all your present monthly expenses, excluding the rent and utilities-you are considering switching the rent and utilities you currently pay for payments on your new place. Include everything: monthly car costs, student loans, credit card payments, groceries, clothes, entertainment, insurance, and so on. Also, do not forget your major once-a-year expenses, such as vacations, averaged out on a per month basis. Then, subtract this amount from your net monthly pay (that is, after taxes). This will give you how much you can afford each month on a different house. Do not go beyond your means. If you are not satisfied with the affordability, you will have to reduce some of your expenses or lower your expectations regarding just how big and fancy a house you can buy.

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