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Mohammad S. Mian, Broker Royal LePage R. E. services Ltd. Brokerage Dear Buyers Please feel free to cantact me for a best deal, if looking to buy a Plaza, Hotel, Gas Station, Land, Apartment Building, Office Building, Medical Building, Resorts or water front properties. I need your TRUST, that is the key. Tel: 905-275-9400, Toll Free: 1888-228-9669 Fax: 905-275-1481, Cell: 416-414-6875 Email: mianms@yahoo.com mohammad@mohammadmian.com Here is some valuable information, tips and Glossary for Residential Buyers. For Buying or Selling Commercial properties, please call for any kind of questions. GLOSSARY FOR HOME BUYERS Mortgage Approval: A pre-approved mortage certificate is not a guarantee of being approved for the mortgage loan. Even if yu have a pre-approved mortgage crificat, you ust stil met your lender during the conditional offer priod to get a final mortgage approval. To ensur that the process goes smoothly, make sure you bring: * A copy of the property listing * A copy of the signed and accepted offer to purcase Your lender will update / varify your financial informaion, the property and other information required to complete the mrtage application. Your lendr may require an appraisal and / or a survey. Title nsurance may also be required. Your lender will also inform you on various types of mortgage , terms, interest rates, amortization periods payment schedules available. Depending upon your down payment, you may have a conventional or high ratio mortgage. CONVENTIONAL MORTGAGE: A conventional mortgage loan that does not exceed 80% of the lending value of the proerty. The lending value is typically the lesser of the property's purchaser price and the market value. Your down payment is at least 20% of the purhase price. HIGH - RATIO MORTGAGE: If you contribute less than 20% of the home price as a down payment --- and as little as 5% --- you will need a high - ratio mortgage . This type of mortgage usually requires mortgage loan insurance, which is available from CMHC or a private company. Your lender may add the mortgage insurance premium to your mortgage or ask you to pay in full upon closing. As shown in the table below. How Much Does CMHC Mortgage Loan Insurance Cost?To obtain CMHC Mortgage Loan Insurance, lenders pay an insurance premium. Typically, your lender will pass these costs on to you. Your lender will give you the exact price when you apply for a mortgage. The CMHC Mortgage Loan Insurance premium is calculated as a percentage of the loan and is based on the size of your down payment. The higher the percentage of the total house price/value that you borrow, the higher percentage you will pay in insurance premiums. Remember: without mortgage insurance you may avoid the insurance premium but you’ll typically pay much higher interest rates and additional administrative fees. At the end of the day, for the vast majority of borrowers, the cost of CMHC Mortgage Loan Insurance is more than fully offset by the savings achieved. Table of CMHC Mortgage Loan Insurance Premiums | Loan Size
(% of Lending Value) | Single Advance Premium
(% of Loan) | Up to and including 65% | 0.50% | Up to and including 75% | 0.65% | Up to and including 80% | 1.00% | Up to and including 85% | 1.75% | Up to and including 90% | 2.00% | Up to and including 95%
Traditional Down
Payment Flex Down | 2.75%
2.90% | Up to and including 100% | 3.10% |
FIXED, VARAIBLE OR ADJUSTABLE RATES: Mortgage interest rates are either fixed, variable or adjustable. Afixed rate is locked-in rate that will not increase for the termof the mortgage. A variable rate fluctuates based on the market conditions while the mortgage payment remains unchanged. With an adjustable rate, both the interest rate and the mortgage payment vary based on the marker conditions. CLOSED MORTGAGE: A closed mortgage may be a good choice if you'd like to have a fixed payment that will allow you to adjust your budget to your new lifestyle. However closed mortgages are not flexable and there are often penalties or restrictive conditions attached to prepayments or additional lump sum payments. It may not be the best choice if you decide to move before the end of the term or if you want to benefit from a potential decrease of interest rate. OPEN MORTGAGE: This type of mortgage is flexible and can usually be pre-paid by any lump sum or paid off at any time without penalty. An open mortgage can be a good choice if you plan to sell your home in the near future or to pre-pay with a larg lump sums. Most lenders will allow you t convert to a closed mortgage at any time, although you may have to pay a small fee. TERM: Your lender will also inform you on the term options for the mortgage. This is the length of time that the agreed-upon mortgage contract conditions, including interest rate, will be fixed. It can vary from six months to ten years. Choosing a longer term (e.g. five years gives you the chance to plan ahead and protects you from interest rate increases while you adjust to home ownership. Weigh your options carefully and don't be afraid to ask your lender to work out the difference between a one, two, five year or longer term. AMORTIZATION: This is the amount of time over which the entire debt will be repaid. Most mortgages are amortized over 15, 20, or 25-year periods. The longer the amortization, the lower your schedule mortgage payments the more interest you pay in the long run. PAYMENT SCHEDULE: A morgage loan is often repaid in regular payments, either monthly, biweekly or weekly. Payment schedules that are more frequent can save some interest costs by reducing the outstanding principal balance more quickly than with monthly payments. The more payments you make in a year, the lower the overall interest you have to pay on your mortgage. LAND TRANSFER TAX IN ONTARIO On For residential properties
Purchase Price | Calculation of Land Transfer Tax | 0 to $55,000 | .005 x Amount | $55,001 to $250,000 | (.01 x Amount) minus 275 | $250,001 to $400,000 | (.015 x Amount) minus 1,525 | Greater than $400,000 | (.02 x Amount) minus 3,525 |
| Purchase Price | Calculation of Land Transfer Tax | 0 to $55,000 | .005 x Amount | $55,001 to $250,000 | (.01 x Amount) minus 275 | Greater than $250,000 | (.015 x Amount) minus 1,525 |
Example: Purchase Price = $275,000 Land Transfer Tax = (.015 x $275,000) minus $1,525 = $2,600 
For commercial properties Example: Purchase Price = $375,000 Land Transfer Tax = (.015 x $375,000) minus $1,525 = $4,100
GENERAL HOMEBUYING WORDS AND TERMS amortization—the period of time, most often 10, 15, or 25 years, needed to reduce a debt to zero when payments are made regularly appraisal—an estimate—by a trained appraiser—of the market value of a property Approved Lender—a lending institution authorized by the Government of Canada through CMHC to make loans under the National Housing Act. Only Approved Lenders can negotiate mortgages which require mortgage loan insurance. assumption agreement–a legal document signed by a homebuyer requiring the buyer to assume Responsibility for a mortgage by the builder or original owner blended payment—a mortgage payment that includes principal and interest. The regular payments stay the same during the life of the mortgage, but the principal being paid off increases as the interest portion decreases. building permit—a certificate issued by a municipality giving permission to build or repair a building closing costs—costs additional to the purchase cost of a home, such as legal fees and transfer fees. Closing costs usually range from 1.5 per cent to four per cent of a home’s selling price. closing date—the date on which the sale becomes final and the new owner takes possession commitment letter—mortgage approval– written notice from the mortgage lender to the borrower that approves the advancement of a specified amount of mortgage funds under specified conditions conditional offer—conditions of sale—an Offer to Purchase that has conditions, such as the sale being conditional on arranging a mortgage conventional mortgage loan—a mortgage loan up to a maximum of 75 per cent of the lending value of the property. A conventional mortgage does not require mortgage loan insurance. deed—a legal document signed by the seller and the buyer transferring ownership of the house. The deed is registered as evidence of ownership. default—failure to live up to the terms of a mortgage. Not making mortgage payments may force the mortgage holder to take legal action to take the property—foreclose deposit—money placed in trust by the buyer when an offer to purchase is made. The money is held until the sale closes, when it is paid to the seller. discharge of mortgage—a document signed by the lender and given to the borrower when a mortgage loan has been repaid in full down payment—the portion of a house price the buyer must pay before getting a mortgage. A down payment usually ranges from five per cent to 25 per cent of the purchase price. easement—a right acquired for access to, over, or to use another person’s land for a specific purpose, such as a driveway, a pathway or public utilities foreclosure—a legal procedure in which the lender gets ownership of the property if the borrower defaults on the mortgage loan holdback—an amount of money held back by the lender during construction of a house to ensure that construction is satisfactory at every stage. Usually, the holdback is 10 per cent of the total cost of construction. lien (mechanic’s)—a claim against property for money owing. A supplier or subcontractor who has not been paid can file a lien, which may maturity date—the last day of the time period of the mortgage, and the date on which the mortgage loan must either be paid in full or renewed option agreement—an agreement saying that in to buy the property within a specified period of time: if you do not buy within the specified period, you lose your deposit planning regulations—municipal regulations, under zoning bylaws, about types of buildings and use of land principal—the amount of money actually owed refinance—to pay off a mortgage and arrange for a new mortgage survey—a document that shows property boundaries and measurements, specifies the location of buildings on the property, and shows easements or encroachments title—a freehold title gives the holder full and exclusive ownership of land and building for an indefinite period. A leasehold title gives the holder a right to use and occupy land and buildings for a defined period. zoning bylaws—municipal or regional bylaws that specify or restrict land use TYPES OF HOUSING AND HOUSING CUSTOMS IN CANADA Canadian cities and towns Usually, towns and cities set aside or “zone” specific areas for highrise apartment buildings. You will see clusters of highrises in the downtown core. Some are apartment buildings. Some are office buildings and stores. You will also find highrise apartment buildings on the outskirts— suburban areas or suburbs—of towns and cities. Land costs in big cities are high. For that reason, there are usually many apartment buildings in big cities. Apartments can be ideal for people who cannot afford to buy a house. Young adults and newcomers often live in apartments in the centre of a city, where services and public transportation are close by. Suburbs are typical features of Canadian cities. People build homes on the cheaper land outside the downtown core. Suburbs can spread far beyond the downtown city core. Over time suburbs develop their own characteristics. Some are almost entirely residential communities. Others have factories and office buildings. Many of Canada’s older suburbs have developed into cities with a range of cultural activities, shopping and recreation. The advantage of suburbs is larger apartments for less rent. The disadvantage is that you may need a car for transportation. Location of housing & Neighbourhoods Canada is a country of great ethnic diversity—in some cities more than 40 per cent of the population is recent immigrants. They come from many countries and from many different cultures. It is the different cultures that create neighbourhoods. It is possible to live in an area where many people from your culture live. The advantages are great. Your neighbours speak your language. You will probably be near familiar shops, restaurants and places of worship. If apartments are available, it is likely that landlords will be familiar with your culture. You will probably find that people from other cultures shop in your neighbourhood for the variety of products offered. In urban centres, residents are not only of mixed cultural backgrounds, but of varied socioeconomic backgrounds. Universities are usually in the city centre, so there is often a large student population. This adds to the exciting diversity. Choosing a neighbourhood There are many non-governmental agencies that help immigrants make the adjustment to Canada. The agencies are familiar with your culture and the city. They can help you find the right neighbourhood for you. Here are some things to keep in mind when you choose a neighbourhood: Doctor, dentist Are you close to medical and dental care? Fire department Are firefighters nearby? Is it easy to find addresses in the neighbourhood? Place of worship Is there a place of worship for your faith in the neighbourhood? Public transportation Is the neighbourhood close to public transportation? Will the public transportation system take you where you need to go and do it quickly? Recreation Are there public parks, playgrounds, playing fields, arenas, community centres and other recreational areas and centres in the neighbourhood? Schools Are schools within walking distance? Do schools have language instruction to help your children do well? Do you feel comfortable with the students and the student mix? Shopping If you do not have a car, can you walk to stores? Are stores on the public transit route? Do the stores sell the foods you want? Work If you don’t have a job, are there businesses in the area where you might find a job? TYPES OF HOUSING There are many different types of housing in Canada. Housing types are similar across the country. Often, different words describe the same type of housing in different parts of the country. In Canada, each level of a house or a building is a storey. A storey is one level. The ground level or ground floor is the first storey, the second floor is the second storey. A basement is not a storey. Canadian houses almost always have finished or unfinished basements. A basement is not the same as a cellar. To Canadians, a cellar is an unheated storage space below ground. Basements are heated and usually only partly below ground level. In the part above ground level there are small windows. Basements usually have a utility or laundry space or room for a clothes washer and dryer. The furnace is usually in another part of the basement. Homeowners store bulky items, such as bicycles, tools, trunks, and sports equipment in unfinished basements. Some homeowners keep winter clothing in the basement in the summer. A finished basement is insulated and finished, usually to the same level as the rest of the house. Homeowners use finished basements as family rooms, TV rooms or additional bedrooms. Basement apartment A basement apartment is a basement converted to an apartment. It may have a separate entrance. The apartment may have its own bathroom, kitchen, laundry room and heating system, or share with the rest of the house. Detached A detached house is not attached to any other house and is usually one or two storeys high. A detached house is also called single-detached or a single family dwelling. A one-storey is called a bungalow. There are many styles of bungalows. A ranch-style bungalow is a large, spread out bungalow. Highrise apartment A highrise apartment is an apartment in a building that can be from six to 30—or more—storeys high. Highrise apartment towers have elevators and security systems to monitor entry and exit. Because they are newer buildings they often have laundry facilities, sports and recreation facilities, and so on. Highrise buildings are well built and have efficient electrical, heating, sewage and plumbing systems. Rooming House A rooming house rents rooms by the week or month. Often there is a refrigerator—usually called a fridge—in the room to store food. Usually, roomers share the kitchen and bathroom. A single person is more likely to use a rooming house. Semi-detached or duplex A semi-detached house (or “semi”) is attached to another, similar house. The common wall is thick enough to prevent sound passing between the units. Semis can be either one or two storeys and usually have yards in the back. In some cities, such as Montréal, semis are called duplexes. In other parts of Canada, a duplex is a two-storey house with separate dwelling units on each storey. If there is a yard, it is usually for first floor residents only. Single-room occupancy (SRO) Similar to a rooming house, but with kitchen and bathroom in each unit. Townhouse or row house Townhouses—sometimes called row houses—are several houses with common walls between each house. They are usually two storeys. A stacked townhouse is one townhouse sitting on top of another. Each townhouse is two storeys. Walk-up or lowrise apartment A walk-up or lowrise is an apartment building that does not have an elevator. Generally, monthly rent for a walk-up is less than monthly rent for a highrise apartment. Walk-ups are usually older buildings less than five storeys high. They usually have fewer conveniences, such as laundry rooms or storage lockers. HOUSING CUSTOMS Canadians take care of their houses and gardens. They expect their neighbours to take care of their houses and gardens. In most cities and towns, municipal bylaws require homeowners to keep their property neat and tidy. Some cities require owners to shovel the sidewalk in front of their house in winter. If you rent an apartment, this is the landlord’s responsibility. Most Canadians want to eventually buy a home. When Canadians grow older, they often sell their houses and use the money from the sale to buy a condominium or rent an apartment. Many Canadians keep their distance from their neighbours. Children are not as reserved as adults. If you have children, they will probably get to know other children—and their parents—in the neighbourhood very quickly. Most Canadians do not expect people to visit without an invitation. In an emergency, however, neighbours usually offer help quickly.If you have problems with a neighbour, your landlord or superintendent, try to solve the problem before going to any authorities. Canadians generally like to work things out in person. Settling disputes through the legal system is generally a last resort. Pace of life A fact of life in Canada, especially in the large urban centres, is time pressure. Many Canadian cities occupy large geographic areas. People commute to and from work by car or public transit. Commuting takes time. Most Canadians don’t have as much time as they would like for friends, families and neighbours. This has affected the way of life, so that for some immigrants, Canadians appear to be less willing to take time for leisure activities. Many newcomers to Canada find this very different, especially if they are from cultures which place an emphasis on personal and social interaction, where they tend to walk rather than drive, and where they tend to visit friends without calling first. This time pressure is a big consideration when looking for the right location. TYPES OF OWNERSHIP Tenure is the word in Canadian law that means the legal rights you have over your house. The three most common types of tenure in Canada are freehold ownership, condominium ownership and rental. Ownership Ownership means you can sell your house any time you want. Detached and semi-detached homes, duplexes and townhouses are usually owned freehold. Freehold means that one person (or two, such as joint ownership by spouses) owns the land and house outright. There is no space co-owned or co-managed with owners of other units. Freehold owners can do what they want with their property—up to a point. They must obey municipal bylaws, subdivision agreements, building codes and federal and provincial laws, such as those protecting the environment. Condominium ownership Condominium ownership is ownership of a unit, usually in a highrise. Condominiums can also be townhouses or lowrises. Condominium ownership means you own the unit you live in and share ownership rights for the common space of the building. Common space includes areas such as corridors, the grounds around the building, and facilities such as a swimming pool and recreation rooms. Condominium owners together control the common areas through an owners’ association. The association makes decisions about using and maintaining the common space.
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