On February 16, 2010, Minister of Finance Jim Flaherty introduced new mortgage rules designed to make it a harder for buyers to qualify for high-ratio mortgages and to discourage speculators. This protectionist measure is targeted at over-extended consumers.

The first rule is that all borrowers must meet the standards for a five-year fixed-rate mortgage, even if they are taking out a mortgage with a lower interest rate and a shorter term. This rule is designed to make sure buyers will be able to pay if and when interest rates rise.

If you were to buy the average price home $337,000 you will now need $9,200 more in annual income to qualify.

Rule # 2 restricts how much of your home you can refinance. Now you can only refinance 90% of your home as opposed to the previous 95%. Often homeowners will keep using the equity they have in their home to finance their lifestyle. A home is a savings vehicle where you build equity. If you still need to dip into that equity it may be time to reevaluate your finances to see where you can be cutting back.

For investors or non-owner-occupied properties you now need to have a minimum 20% down payment.

The effective date of these new rules is April 19th. Any agreements that are finalized before April 19 will be based on the old rules. Moreover, any agreements that close after April 19 but were signed before this date will be allowed to go through under the old rules. Any new deals after April 19 will be subject to the new rules.

When considering your new home, you have to set a budget, decide how many bedrooms and bathrooms you need, and pick a neighbourhood, but you also need to consider what your home has to have to meet your requirements.

I know on my wishlist I had main floor laundry and a direct garage access. Both of which I got and love.  I wish the laundry room was bigger and had a window so I could at least get a view of outside while folding my laundry, but alas, not to be. At least not in this house.

So what is on you wishlist?

• A “green” home?
• A big eat-in kitchen?
• Open concept living space?
• Master ensuite? Do you want it to resemble a spa?
• Do you work from home and need a home office?
• Finished basement?
• Outdoor living space?
• A hot tub?
• Etc.

These are just a few ideas. It is really important to consider your lifestyle and what you need in your home to make ti work for you.

The Red Hot Condos will be available for occupancy in the Summer of 2011. Being built by Camrost Feldcorp in Don Mills, this condominium project includes 1 bedroom, 1 bedroom + den and 2 bedroom units ranging in price from $172,900 to $285,900.  They are also offering furniture packages ranging from $7,000 to $13,500. If you are interested in learning more about this project, give me a call.

Built right across from High Park and only 108 suites, take advantage of this great neighbourhood. Great shops, restaurants and so much to do. The suites will range from 1 bedroom up to 2 bedroom + den. This building also has lots of terraces and balconies. Floor to ceiling windows make for some great views of the park and street. If you interested in learning more about this project, give me a call.

The Home Buyers’ Plan (HBP) is a program that allows you to withdraw up to $25,000 from your registered retirement savings plan (RRSPs) to buy or build a qualifying home for yourself or for a relative with a disability.

You have to be a first time homebuyer, meaning you could not have occupied any home as the principal place of resience.

If you are planning on making a contribution to your RRSP in 2009 you have until the end of February to do so but keep in mind you must have the funds in your RRSP for at least 89 days before you can withdraw it again to use for the HBP.

To participate fill in this Form and submit it.

Bright 4 Bedroom Home Built By Townwood Homes In Bayview North. Open Concept With Clear Storey Foyer, Upgraded Oak Staircase. High Ceilings And Crown Mouldings Throughout Main Floor. Separate Living Room And Dining Room. Eat-In Kitchen With Centre Island And Lots Of Cabinets. Main Floor Laundry With Direct Garage Access. His/Hers Closets In Master Bedroom, Double Sinks And Large Soaker Tub. Large Fenced Yard And Porch On Front Of House For Outdoor Living. Includes Bright 4 Bedroom Home Built By Townwood Homes In Bayview North. Open Concept With Clear Storey Foyer, Upgraded Oak Staircase. High Ceilings And Crown Mouldings Throughout Main Floor. Separate Living Room And Dining Room. Eat-In Kitchen With Centre Island And Lots Of Cabinets. Main Floor Laundry With Direct Garage Access. Extras: His/Hers Closets In Master Bedroom, Double Sinks And Large Soaker Tub. Large Fenced Yard And Porch On Front Of House For Outdoor Living. Includes

There is Land Transfer Tax for Ontario and if you live in the city of Toronto there is an additional tax there as well. There is a great LTT calculator here http://www.torontorealestateboard.com/LTT_splash/ltt_calculator.htm.

In Ontario:

The tax is calculated as follows:

* 0.5% of the value of consideration for the transfer up to and including $55,000,

* 1% of the value of the consideration which exceeds $55,000 up to and including $250,000, and

* 1.5% of the value of the consideration which exceeds $250,000, and

* 2% of the amount by which the value of the consideration exceeds $400,000 for land that contains at least one and not more than two single family residences.

First-time homebuyers may be entitled to a refund of Ontario’s land transfer tax, up to a maximum of $2,000. This refund is usually claimed at the time of registration.

The Toronto Land Tranfer Tax is calculated as follows:

Price of the Home

Up to and including $55,000.00      0.5%  plus

$55,000.01 to $400,000.00             1.0%  plus

Over $400,000.00                                  2.0%

FOR EXAMPLE: A home with a consideration value of $500,000.01 (excluding GST):

0 to $55,000.00                                   55,000.00 x 0.005 = $275.00

$55,000.01 to $400,000.00      $344,999.99 x 0.01= $3,450.00

$400,000.01 to $500,000.00     $99,999.99 x 0.02= $2,000.00

Total MLTT= $5,725.00

If you are a first-time purchaser of a newly constructed or re-sale residential property. The rebate for first-time home purchasers is up to a maximum of $3,725.00.

Your lawyer applies for the credits for you when registering your home.

Your credit score is used by most companies to see if you are a good credit risk or not. A credit score of over 680 is considered excellent.

What Can You Do to Improve Your Score?

1. Order a copy of your credit report from www.equifax.com or www.transunion.com to review it and make sure there are no errors.
2. Pay your bills on time.
3. If your credit history is questionable, open a few new accounts and use them responsibly.
4. Don’t open accounts and not use them. Having 6 or 7 of the same type of credit does not work in your favour.
5. Keep your balances low relative to your amount of credit available.
6. Pay off credit card debts!

What Does This Mean to Home Buyer’s?

The better your credit score the higher you buying power (income dependent as well). You will also qualify for the best mortgage products at the best rates.

To see what your credit score is and how much of a home you can afford, make sure to talk to your Real Estate Agent and Mortgage Broker before shopping for your Toronto Home.

Buying Your Home:
The Process

1.	FINANCIAL PRE-QUALIFICATION: Speak with your Mortgage Broker or Bank to answer any of your questions, to feel completely comfortable with the price to pay for your home. You’ll need a T4 & letter from your employer verifying your income. (I can suggest a number of Mortgage Brokers or Banks if you haven’t already built a relationship with one as yet.)
2.	REVIEW OF THE STANDARD COSTS:
	a)	Provincial Land Transfer Tax : First $55,000 X .005 = $275.00 $55,000 to 250,000 X .01 = $1,950.00 $250,000 to 400,000 X .015 = $2,250.00 $400,000+ X .02 = $_________
	b)	Municipal Land Transfer Tax: 0.5% of the amount of the Purchase Price up to and including $55,000.00 plus 1% of the amount of the Purchase Price between $55,000.00 and $400,000.00 plus 2% of the Purchase Price above $400,000.00
	c)	Lawyer: Allow +/- $1000.00 (maybe less)
	d)	Moving Costs
	e)	Home Inspections: General Home $350.00 and up (depending on the size of home and Sale Price). Termite inspection: allow $200. – $300.
	f)	Survey +/- $900.00 – Call me about Title Insurance $300.00 and up that will eliminate the need for a survey.
3.	THE AGREEMENT OF PURCHASE & SALE: Deposit: 5 – 10% of Purchase Price to accompany the Offer. Conditions: Finance, Home Inspection, Sale of the Purchaser’s Property. Irrevocable Date: the date and time before which the offer cannot be withdrawn Closing Date: the date that the property changes hands Requisition Date: the date allowed for title search, usually 2 weeks before closing

Buyers Net Sheet
PROPERTY ADDRESS:
PRICE:
CASH ON HAND
LEGAL FEES $1000 +/-
HOME INSPECTION $350 +/-
POSSIBLE SURVEY $900 +/-
MORTGAGE FEES
MISC. FEES
TOTAL BUYING COSTS:
PROVINCIAL LAND TRANSFER TAX (See 1 a above for calculation )
MUNICIPAL LAND TRANSFER TAX (See 2 b above for calculation.)
MISC. ADJUSTMENTS (Prepaid/Outstanding: Gas, Property tax, etc.)
LESS TOTAL BUYING COSTS:
AVAILABLE FOR DOWN PAYMENT

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Commonly Used Clauses

Purchase “Agreement of Purchase and Sale” forms

For example: Name, Property address, Legal description, Deposit,
Your choice of Clauses, Chattels, Exclusions, etc.

1. CASH OFFER
   PURCHASER AGREES TO pay the balance of the purchase price in cash or by certified cheque
   to the Vendor on closing, subject to the usual adjustments.

2. CONDITIONAL UPON ARRANGING SATISFACTORY FINANCING
   THIS OFFER IS CONDITIONAL upon the Purchaser arranging satisfactory financing on or before
   ______, otherwise this Offer becomes null and void and the deposit money shall be returned
   to the Purchaser in full without interest. The Purchaser reserves the right to waive this
   condition at his sole option within the specified time period. The said proceeds for
   financing shall be paid to the Vendor on closing as part of the purchase price.

3. CONDITIONAL UPON QUALIFIED INSPECTION
   THIS OFFER IS CONDITIONAL for a period of _____ days from the date of acceptance by the
   Vendor upon the Purchaser having the subject property inspected by a qualified home
   inspector and finding said inspection satisfactory to him, failing which, this Offer shall
   become null and void and the Purchaser’s deposit shall be returned in full without
   interest. The Purchaser reserves the right to waive this condition at his sole option
   within the specified time period.

I have a great condominium listing right now and we have had lots of traffic from Buyer’s Agents.  What surprises me the most is the calls I keep getting from Buyers who are just calling around to a bunch of listing agents to view their listings.  There is very little awareness in the marketplace as to the advantages of having a Buyer’s Agent working on your behalf.

First of all you don’t need to search the Toronto MLS for listings every day. An agent can automatically send you the listings that meet your search criteria and let you know about exclusive listings that are not available to the public.

The agent schedules the appointments for you and can work within your schedule to make sure you get to see all the homes you are interested in.  It is so much easier to be “chauffeured” around rather than randomly go see homes on your own.

An agent will also educate you on the process of buying a home.  This way when you find the perfect home for you, you will be confortable and ready to put in an offer.

The agent will prepare the Offer of Purchase and Sale for you and will include clauses to protect your interest, for example the conditions of financing or a home inspection.  They will negotiate on your behalf to get you the best possible price for the home.  A selling agent wants to get the highest possible price for their client’s home.  This is not the price you want or should be paying, a well prepared agent will pull comparables in the area to help negotiate the best possible price for you as a buyer.

In a multiple offer situation, an agent is essential to helping you form the right pricing and terms strategy to get you the home of your dreams.

And after the negotiation is over, their job is not done until closing where they work with the lawyer, the lender, and the seller’s agent to make sure that everything will be ready for closing.

So instead of going in by yourself to meet with the listing agent, hire someone you can trust to represent you and protect your interests in achieving your Real Estate goals.

When buying your home in Toronto, make sure to hire a Buyer’s Agent!