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Ready to build the home of your dreams & get your dream home financed in Grande Prairie? Here’s how to make the process smooth with your mortgage broker. Hopefully reading this article, along with tips from our mortgage brokers here at DLC in Grande Prairie, we can get your home mortgaged smoothly for you!
First step, go get a pre-qualification with your mortgage broker. To do this visit one of our qualified mortgage brokers at Dominion Lending Centres HT Mortgage Group.
Come prepared with:
A pre-approval will give you an idea of what your total build budget will be, and ensure that your new home matches your wish list. Remember this is all to get your dream home financed in Grande Prairie.
“Getting a Pre-Approval is super important!” Kaitlyn Moore – Mortgage Broker
Now that your pre-qualified to build a new home, it’s time to investigate who will build your home for you. We are lucky enough to have several local home builders with loads of experience, all that carry new home warranty. Many of these builders will help you to purchase the town lot you’d like to build on as well. Or perhaps you already own an acreage with an older mobile home and you’d like to build a new house on the property? Last, maybe it’s your dream to be out of town, and the goal is to buy and build on bare land. We’ve got a mortgage for all 3 options to get that dream home financed in Grande Prairie!
“Make sure your builder is NHW registered.”Gert Martens, Mortgage Broker
Don’t go with the first builder you speak to, or the cheapest builder! Do your research, whoever is building your home will impact your life for many years to come! Jodi Scotton, Mortgage Broker
Here are some of the details that will need to be hammered out before you visit your mortgage broker again:
“Get Quotes for Utilities! You can mortgage the cost of utilities, such as putting in a well, or getting a powerline out to your acreage, but you need quotes to ensure this will be included in your financing. Utility hook-ups can cost a lot, so it’s important to plan them into your build.”Doria Zacharia, Mortgage Broker
“Be really specific about what type of finishes you expect your home to have, so that the original contract matches your expectations and prevents cost overruns over time.” Megan Lemay, Mortgage Broker
You may wonder, if I’ve already gotten a pre-approval, why do I still need a financing condition on my purchase contract?
A mortgage lender needs to confirm they are comfortable with the home your building, along with the cost of this construction. To do this they have an independent appraiser review your purchase contract, plans and location. The appraiser confirm that the market value of your home, is greater than, or equal to , the cost of this construction at completion. If a home is too custom, it’s market value may be less than the cost of your build and the lender may make you do a larger down payment. The lender also wants another chance to double check your down payment and ensure you have enough assets to get a build done.
Congrats! Now that your build has been approved, your lender will advance the draw money directly to your lawyer, who will then pay your builder along the way. You are that much closer to having that dream home financed in Grande Prairie. You won’t make mortgage loan payment until your home is 100% complete. Be sure not to make any changes to your financial situation between starting your build, and your move in date.
“Be aware of your current debts and don’t apply for any credit until the build is done” Alycia Larocque
There a million different scenarios we could discuss when it comes to building a home. For example: How is the building process different when I buy a pre-built manufactured home, is this the same process as getting a local builder to construct my home on site?
To make a plan for your specific building situation, give us a call here at DLC HT Mortgage group today!
Updated March 14th, 2009
This week I will talk about the cost of buying a home in Grande Prairie.
Although I bought my home back in 2015, I’m lucky enough to work with new mortgages and purchase’s everyday here in Grande Prairie, so this will be as detailed as I can give you. Here’s a breakdown of what I spent.
I’ve signed the purchase agreement for my new home here in Grande Prairie. My mortgage broker has verified that I have enough downpayment but….
“What other cost’s should I expect when buying my home?
First I’ve called a lawyer for a quotes.
“Could I get a quote for legal fee’s on this $250,000 house I’m purchasing here in Grande Prairie?”
I would expect legal fee’s for a home purchase to run around 0.5% of the purchase price. So $250,000 home x 0.05% = $1250. A $500,000 home will have a cost around $2500. This will vary between lawyers so call for quotes!
My lawyer will help me purchase title insurance, $160 for a $250,000 home in Grande Prairie, and roughly $300 for a $500,000 home.
Next I’ve called a home & auto insurance company for a home insurance quote. If I’m lucky my new insurance company won’t make me do too much legwork. I’m prepared to answer questions like:
” How old is the roof of your new home? How old is the hot water heater? Is the basement carpeted or tiled?”
My current home insurance policy costs me $120 every month. You are required to have home insurance to get a mortgage. So expect to pay between $120 to $220 a month on homes priced between $250,000 to $500,000.
Another insurance to get is for your personal protection- life & disability insurance. For me on a $250,000 home Life Insurance was $17 a month, and disability was $37 a month. These rates will change based on your health and age. I was 25 and darn healthy.
This was an expense I never expected for my first home. You move into your lovely new house and then slowly realize…. I need a broom, kitchen scrubs, rakes, shovels! you need dish towels, disk racks, spoons, tea kettle, spices…. It adds up.
If you can try to negotiate for “Backyard Shed including contents” to avoid having to buy yard supplies. I’ve never seen a purchase agreement negotiate for the cleaning supplies closet to be left fully stocked, but I would have saved so much.
As well,Budget another $500 to stock your house up with all the cleaning supplies, brooms, mops, linens, pot and more that a house requires. You could of course spend way more than this…. Try to hold off purchasing the diamond crusted broom till month two.
This… you can spend so much on furniture so quickly! The most subjective cost out of all the categories. My best advice is take it slow. Enjoy the freedom of having no furniture. Being minimalist is very chic for 2019. Budget $500 for the first two months and see how far you can stretch it.
Don’t go out and buy all new furniture with a monthly payment plan. Wait a year.
Start calling at least two weeks in advance before your move-in date to get your services set-up.
Heat & Electric on a combined bill: $228/month
Water & Garbage Removal: $80/month
Start planning for the future. Now that you own your home, 10 years down the road you’ll need a new roof/fridge/hot water boiler/ new deck. Try to put aside $1000 a year to cover future repairs. One day you will need to replace the roof/ repaint the deck/ buy a new furnace / update the windows. Plan and set the money aside in advance, future you will be happy.
Cost of Getting a Mortgage on a $250,000 home in Grande Prairie with 5% down (Rough Numbers)
Default Insurance: $11,400 – added to your mortgage
Title Insurance: $160 -Part of your legal cost’s
Appraisal $200-$400 – not always required for a purchase.
Household Goods $500
To Furnish your home – $500 & be strategic for the first two months.
Getting a home is a big investment, and a major change to how you’ll budget and spend your money. For myself having a place of my own to decorate and host at was always worthwhile.
If this is starting to seem like too big of expense – We live here in Grande Prairie! Our rental market is thriving, and people are always looking for a room to rent. Rent a spare room out and net $600 a month. I’m renting two rooms for $700 a month right now in my house.
PS: please send me an email or message me on Facebook if you’d disagree with these numbers for a $250,000 home in Grande Prairie. Or if you think I’ve missed any of the cost’s associated with owning a home!
Grande Prairie, Alberta Mortgage Rates Feb 6, 2019
Everyone always has downpayment questions. How much do I need to put down on my first house? If I put more down do I get a lower rate? Do I need to put a different amount down if it’s not my first house? What is the downpayment if it’s a rental home? So this week we post our Grande Prairie, Alberta Mortgage Rates and talk a bit about downpayment.
As of February 2019 in Alberta, current mortgage rules are that you only have to put 5% down on your first house, or your second or even 20th home. If you are buying a home that’s meant to be your residence you can do just 5% down. Given Grande Prairie’s Residential Average Home Price (September 2018) of $320,744 that 5% would be $16,038.
That doesn’t mean it’s always a good idea to just put 5% down. If you put 35% down here in Grande Prairie instead of 5%, many companies will give you their best rate. Putting 5% down gets you a home in Grande Prairie, but not always the best mortgage rate.
If you can afford to put 20% down on a home in Grande Prairie, you can avoid having to pay for mortgage default insurance. Mortgage default insurance is mandated in law by the Canadian government. As of February 2019, it is required to have default insurance on your mortgage if you put less than 20% down. Given Grande Prairie’s Average Home Price of $320,744 when putting 5% down or $16,038 you will pay $12,188 when mortgage default insurance is added to your mortgage. Go here to calculate that mortgage default insurance for any scenario. You don’t have to pay it up front, but that mortgage default insurance does add up!
Mortgage lenders will consider your credit score when you go to get a mortgage as well. If you have excellent credit then 5% down is no issue, but maybe your score has dropped below 670 when you pull your credit report. What if your credit score is only 620? A lower credit score may mean that you have to put more than the standard 5% down here in Grande Prairie to make mortgage lenders comfortable issuing a mortgage.
How much downpayment do I need to purchase a rental home in Grande Prairie, Alberta? You will need to have a downpayment of a least 20% ready to purchase a rental home. Let’s take our average home price of $320,744 for Grande Prairie in September 2018 again that is $64,149 as downpayment. Given your credit score, the number of rentals you already own, or the condition of the home you are purchasing you may be required to put down much more than 20%. One good point, putting at least 20% down you avoid mortgage default insurance.
There are many situations that can change what amount of Downpayment is required here in Grande Prairie Alberta. For clarification, or just to have a professional run the numbers call our office here in Downtown Grande Prairie at 780-513-6611.
A few years ago, I met with my Home Equity Bank representative. He was trying to encourage me to go visit my financial adviser referral partners to offer the Chip Reverse Mortgage product. I explained that I did not know anyone who had a reverse mortgage so it was hard to promote to financial advisers or anyone.
I asked him to tell me a success story and he came back with a great one that ticked most of the boxes. A couple in their mid-70s had met with a financial adviser to go over their portfolio and financial situation. They wanted to sell some of their investments to get a little cash.
What the adviser saw troubled him. The couple had about $200 a month left over after they paid for their bills and groceries. What’s more , they were driving a 20-year-old car, their home needed repairs and they hadn’t been on a vacation in years. It was a classic case of house rich, cash poor.
The adviser contacted Home Equity Bank and they appraised the house. The couple were eligible for $200,000 based on the value of their home. They took this money and the adviser invested a little more than half in funds that would provide them with $1100 a month in income. They took $25,000 and bought a new car, did some repairs to their home and took a vacation. They took the balance and used it to help out their grandchildren with university with tuition. With one move, they were able to increase their cash flow, make their home more comfortable, do repairs, enjoy their retirement and help out family.
Now that it’s fall and the spring home-buying rush is over, perhaps it’s time for you Dominion Lending Centres mortgage brokers out there to see if you can help out another segment of the population. Contact your financial adviser partners, your certified Seniors Real Estate Specialists and past clients with elderly parents. There are a lot more people out there that could use your help.
I am often asked if it’s hard to compete with the banks. While they may offer competitive rates at times, right now we have much better rates than the banks. However, we have certain advantages which allow us to blow them out of the water most of the time.
– banks are limited to around 5 products that they can offer you. They will try to fit you into one of their products even if the financial institution next door has a better one for you. Brokers have access to banks, credit unions, trust and mortgage companies as well as private lenders.
Brokers are your champions bankers are employees. They put their employer first . They won’t offer you the best rates unless you are a good negotiator. Brokers are licenced by provincial organizations and have to follow a code of ethics which requires that we put the consumer first. We also negotiate the best rate, terms and conditions for you. If you need to break the mortgage before the end of the term, we can assist you with that and perhaps help you to avoid paying a penalty.
If you are moving into a home that is more than one year old, you probably do not have a home warranty. Brokers have 3 lenders who offer home warranties, which can cover repairs to the plumbing, heating and electrical systems with a small deductible. Two of the lenders even offer this as a complimentary service for the first year while the third lender offers it for the length of the mortgage. As Dominion Lending Centre brokers, we also have discounted rates for moving services and boxes from a large national moving company .
I saved the best for last. We offer portable mortgage life and disability insurance.
It may not sound like much but we have the same coverage as the banks offer with one important difference – portability. While we take care to place you with a good lender, circumstances change and lenders may not offer favourable terms on renewal. If you try to leave a bank after developing a condition like high blood pressure or having a heart attack, you will have to re-apply for insurance coverage and may be denied. There are hundreds if not thousands of unhappy bank clients who are stuck paying high interest rates because they are forced to stay with a lender. Broker insurance gives you the independence to move from lender to lender depending on who is willing to offer you the best rates and terms. This may not sound like much to you now but it’s a real game changer for anyone who knows someone who have had this happen to them.
Is it difficult to compete with the banks? No – we have them beat hands down.
If your in the market for a new home, that’s great – but if you’re not already pre-approved from your mortgage broker, be sure to read on.
Pre-approvals are very important for two reasons.
They give you confidence in knowing that a specific amount of financing is available for you.
A pre-approval can put you in a positive negotiating position against other home buyers who aren’t pre-approved.
Not all pre-approvals are the same, though. There are essentially three different kinds.
If you’d like to get a pre-approval, contact a Dominion Lending Centres mortgage professional! We’re here to help.
In recent years the government has made it tougher to get qualified for a mortgage. Our staff here at Dominion Lending HT mortgage group in Grande Prairie are here to help. The most recent change took effect May 9, 2018 so take a peek at the link below to understand a little more about the recent changes.
Doria Zacharias is our mortgage agent of the week!
Send us an email at firstname.lastname@example.org to ask her your mortgage related questions! Continue reading