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Mortgage Regulations Have Changed . 

Mortgage regulations have changed significantly over the last few years, making your options wider than ever. Subtle changes in the way you approach mortgage

shopping, and even small differences in the way you structure your mortgage, can cost or save  you literally thousands of dollars and years of expense. Get the Right Information

Whether you are about to buy your first home, or are planning to make a move to your next home, it is critical that you inform yourself about the factors involved. 

Industry research has revealed that there are 6 common mistakes that most homebuyers make in mortgage shopping that can have a significant impact on the outcome of this critical negotiation. If handled correctly, these issues could result in a mortgage that will cost you less over a shorter period of time. 

6 Things You Must Know Before Obtaining a Mortgage

Before you commit your hard earned dollars to monthly mortgage payments, consider these 6 issues. Effective consideration of these important areas can make your payments

work much harder for you.

❶ You can, and should, get preapproved for a mortgage before you go looking for a home. Preapproval is easy, and can give you complete peace-of-mind when shopping

for your home. Your local lending institution can provide you with written preapproval

for you at no cost and no obligation, and it can all be done quite easily over-the-phone. More than just a verbal approval from your lending institution, a written preapproval is as good as money in the bank. It entails a completed credit application, and a certificate which guarantees you a mortgage to the specified level when you find the home you’re looking for.

❷ Know what monthly dollar amount you feel comfortable committing to. When you discuss mortgage preapproval with your lending institution, find out what level you qualify for, but also pre-assess for yourself what monthly dollar amount you feel comfortable committing to. Your situation may give you a preapproval amount that is higher (or lower) than the amount of money you would want to pay out each month. By working back and forth with your lending institution to determine what this monthly amount is, and what value of home this translates into at today’s rates, you won’t waste time looking at homes that are not in your price range.

❸ You should be thinking about your long term goals, and expected situation, to determine the type of mortgage that will best suit your needs. There are a number of questions you should be asking yourself before you commit to a certain type of mortgage. How long do you think you will own this home? What direction are interest rates going in, and how quickly? Is your income expected to change (up or down) in the near term, impacting how much money you can afford to pay to your mortgage? The answers to these and other questions will help you determine the most appropriate mortgage you should be seeking.

❹ Make sure you understand what prepayment privileges and payment frequency options are available to you. More frequent payments (for example weekly or biweekly) can literally shave years off your mortgage. Simply by structuring your payments so that they come out more frequently, will significantly lessen the amount of interest that you will be charged over the term. For the same reason, authorized prepayment of a certain percentage of your mortgage, or an increase in the amount you pay monthly, will have a major impact on the number of years you will have to pay and could shorten your payment term considerably These two payment options can cut years off your mortgage, and save you thousands of dollars in interest. However, not every mortgage has these prepayment privileges built in, so make sure you ask the proper questions.

❺ Ask if your mortgage is both portable and/or assumable. A portable mortgage, where available, is one that you can carry with you when you buy your next home and avoid paying any discharge penalties. This means that you will not have to go through the entire mortgage process again unless you are making a move up to a much more expensive home. An assumable mortgage is one that the buyer for your home can take over when you move to your next home. This can be a very powerful tool at the negotiating table making it much easier and more desirable for a buyer to buy your home, and again saves you any discharge penalties.

❻ You should seriously consider dealing with a Mortgage Expert.

Consider dealing only with a professional who specializes in mortgages. Enlisting

their services can make a significant difference in the cost and effectiveness of the

mortgage you obtain. For example they can make the process faster thereby avoiding

costly delays. Typically there is no cost or obligation to enquire.

If you’re like most homebuyers, you have two primary considerations in mind when you start looking for a home. First, you want to find a home that perfectly meets your needs and desires, and secondly, you want to purchase this home for the lowest possible price.

When you analyze those successful  homebuyers who have been able to purchase the home they want for thousands of dollars below a seller’s asking price, some common denominators emerge. Although your agents negotiating skills are important, there are three additional key factors that must come into play long before you ever submit an offer.

Make sure you know what you want . . . As simple as this sounds, many homebuyers don't have a firm idea in their heads before they go out searching for a home. In fact, when you go shopping for a place to live, there are actually two homes competing for your  attention: the one that meets your needs, and the one that fulfills your desires. Obviously your goal is to find one home that does both. But in the real world, this situation doesn't always occur. Far too often people buy a home for the wrong reasons, and then regret their decision when the home doesn't meet their needs.

Don't shop with stars in your eyes: satisfy your needs first. If you're lucky, you'll find a home that does this and also fulfills your desires. The important thing is to understand  the difference before you get caught up in the excitement of looking.

Find out if your agent offers a “Buyer Profile System” or “Househunting Service,” which takes the guesswork out of finding just the right home that matches your needs. This type of program will cross-match your criteria with ALL available homes on the market and supply you with printed information on an on-going basis. A program like this helps homeowners take off their rose-colored glasses and, affordably, move into the home

of their dreams. 

For you to understand how much to offer for a home you’re interested in, it’s important for  you to know how sellers price their homes. Here are 4 common strategies you’ll start to recognize when you begin to view homes:

❶ Clearly Overpriced: Every seller wants to realize the most amount of money they can for their home, and real estate agents know this. If more than one agent is competing

for your listing, an easy way to win the battle is to overinflate the value of your home. This is done far too often, with many homes that are priced 10- 20% over their true market value. This is not in your best interest, because in most cases the market won't be fooled. As a result, your home could languish on the market for months, leaving you with a couple of important drawbacks:

• your home is likely to be labeled as a "troubled" house by other agents, leading to a lower than fair market price when an offer is finally made

• you have been greatly inconvenienced with having to constantly have your home in "showing" condition . . . for nothing. These homes often expire off the market, forcing you to go through the listing process all over again.

❷ Somewhat Overpriced: About 3/4 of the homes on the market are 5-10% overpriced. These homes will also sit on the market longer than they should. There is usually one of two factors at play here: either you believe in your heart that your home is really worth this much despite what the market has indicated (after all, there's a lot of emotion caught up in this issue), OR you've left some room for negotiating. Either way, this strategy will cost you both in terms of time on the market and ultimate price received.

❸ Priced Correctly at Market Value: Some sellers understand that real estate is part of the capitalistic system of supply and demand and will carefully and realistically price their homes based on a thorough analysis of other homes on the market. These  competitively priced homes usually sell within a reasonable time-frame and very close

to the asking price.

❹ Priced Below the Fair Market Value:  Some sellers are motivated by a quick sale. These homes attract multiple offers and sell fast - usually in a few days - at, or above, the asking price. Be cautious that the agent suggesting this method is doing so with your best interest in mind.

What You Should Know BEFORE You Buy

Before deciding that your next home must be a fixer-upper, you should do some homework into what to expect when purchasing these types of homes. Many prospective homebuyers tend to have a romanticized version of the entire process, and are quite

shocked when confronted with the hard reality. Fixer Upper homes can often represent a

good deal, but there are some points that a homebuyer should be aware of before making that offer.

MYTH #1 . I can make a “killing” in the real estate market by buying a run-down home, for tens of thousands of dollars less than the average home, fixing it up, and then immediately selling it for full price, or more.

FACT #1 .  Most homeowners looking to sell their “fixer upper” home understand that they will have to list their home at a price that reflects the cost involved in restoring the home to its original condition. The asking price of a fixer upper is usually calculated so that the savings represented by the lower than average market price is roughly equal to the amount of money that a buyer could expect to spend on necessary renovations. Updating the “look” of a home, or upgrading to higher-end finishes, is not included in these calculations, and you should be careful not to spend so much money on

renovations that you are unable to recoup your investment.

MYTH #2 .  If I’m buying a fixer-upper home, I don’t need to bother with the added cost and aggravation of a home inspection because I already know what I’m getting.

FACT #2 .  A home inspection should always be included in an Offer To Purchase and Sell agreement, and it is arguably even more important to include one when you are looking to buy a fixer upper. Structural defects are normally not visible to the untrained eye, yet will cost much more to repair than the obvious cosmetic fix-ups. Most licensed home inspectors will not only detail the defects that they uncover, but can also give you a good idea of the costs involved in fixing them.

MYTH #3 .  It’s better to pay a lot less and buy a “fixer upper” in an undesirable area, than to pay more for a comparable “fixer upper” in a better neighbourhood.

FACT #3 .  Most of us have heard the quote, “the three most important things to look for when buying a home are: location….location…and location!” While this is obviously meant to be funny, and is a somewhat oversimplified rule of home buying, it does drive home the point of how important it is to consider where you will buy your home. Purchasing a fixerupper in a desirable neighbourhood will cost you more initially, but the payoffs -- personal peace-of-mind and higher return on your home investment when you sell -- should not be overlooked.

MYTH #4 .  Once I fix this house up, I can turn around and sell it for double the price I paid.

FACT #4 .  A home will only sell for what the market can bare. What this means is that no matter how many upgrades were made, or how much money has been invested in the upgrades, a home will only sell for what the majority of homebuyers are willing to pay. Factors to consider when calculating your possible return on investment:

1. Location: What kind of a neighbourhood is the home in? The type of neighbourhood

will determine which type of buyers you will attract when you decide to sell. For example: An area consisting of mostly “first time buyers” will attract buyers who have a strict and limited budget. They are looking for affordability above all else – including high-end finishes and perfectly landscaped gardens.

2. Neighbours: What are the neighbouring homes like? A beautiful home surrounded

by unkempt, run-down homes will sell for much less, than a beautiful home surrounded by wellkept, nicely maintained homes. 

3. Surroundings: What are the surrounding features? Buyers are willing to pay more for a home that is in a convenient, yet quiet locale. While you may find it convenient to side onto a school, many potential buyers would eliminate such a location due to the noise level associated with the presence of hundreds of excitable children, and the congestion

caused by school buses and parents dropping off and picking up students.

MYTH #5 .  I can make a lot more money by turning this single family home into a multi-family dwelling.

FACT #5 .  While this statement is for the most part true, it may not be possible. Most towns and cities have strict zoning laws that not only dictate the maximum allowable occupancy within any given area, but also dictate the size and design of a home when building new, o recreating additions to an existing structure.

If your intent was to purchase the house shown in the example above, make the repairs, and immediately list the house for sale, your Actual Profit shown is only $500.00. If, however, your intent was to purchase the same house, but actually live in it for a few years before selling, you would normally expect to turn a much better profit for two reasons:

• First, historically speaking, the real estate market normally goes up over time and your

anticipated sale price would be higher - affording you more profit.

• Second, the money that you would have been paying in rent to live elsewhere - with no

return - is actively paying down your mortgage and increasing your equity.

As with all investments, though, nothing is guaranteed. So when looking to finance a 

home, keep in mind that the real estate market has taken some big hits in the past. Never

overextend yourself financially.

When you’re looking to buy a home, the first thing most homebuyers do is start the process of househunting. However, experience proves that this is one of the last steps you should be taking if you want to get the most home for the least amount of money. In fact,

shopping for the best financing should start long before you start shopping for a home.

This report outlines 3 important steps you should take to obtain the best financing rates when you buy a home. Read on to find out where you can enquire, what questions

you should ask, and how to manage the process to your personal advantage.

3 Critical Questions to Ask

When you’re looking for an agent to assist you in finding a home, make sure you find out the answers to these important questions:

1. Can you get me quick, easy and FREE mortgage preapproval?

2. Can I get preferred access to special low down payments, monthly payments and interest rates?

3. Can I get special advance notice of listings that computer-match my homebuying criteria?

You owe it to yourself to benefit from these cost saving benefits.

❶ Get Preapproved for a Mortgage . . . Getting preapproved for a mortgage will

give you a number of important benefits including emotional security in the house-hunting process, and insurance against rising interest rates in the market place. Preapproval is easy, and can give you complete peace-of-mind when shopping

for your home. Mortgage brokers can obtain written preapproval for you at no cost and no obligation. More than just a verbal approval from your lending institution, a written preapproval is as good as money in the bank. It entails a completed credit application, and a certificate which guarantees you a mortgage to the specified level when you find the home you're looking for. Preapproval means no last minute shopping around for money and rates. With a preapproved mortgage, if rates go up, you still get the 

preapproved rate, but if rates go down, you receive the lower rate.

❷ Receive Preferred Access to Special Low Financing . . . Agents that conduct hundreds of real estate transactions every year may be able to offer you certain negotiating advantages with lending institutions. These lenders are often anxious to do business with such agents and their clients, and may be willing to extend better than average rates.

This can make purchasing a home much easier and more affordable for many buyers to qualify for a minimum down payment, and low monthly payments. Therefore many more buyers can own the home of their dreams much sooner than they ever thought possible.

❸ Househunting Service… Most agents offer a house-hunting service to make it easier for you to find the home you want. Through these programs you can find out in advance which homes on the market match your homebuying criteria. To do this you simply provide your agent with a brief description of the type of home you’re looking for, for

example, number of bedrooms, price range, neighborhood and so on. Then you should receive advance notice (including pictures) of all the homes for sale that match your requirements. This will give you the competitive edge to find out before other buyers which homes that are likely to be of interest to you. Because you are there before most other buyers, perhaps you can even negotiate a better price. You can then drive by these homes, without the assistance of an agent, to see which ones you want to view. Then it’s simply a matter of you advising your agent about which homes you like and want to see.