• What is, being "Pre-approved"?
• What benefit do I have by being "pre-approved"?
• Is the term and amortization of a mortgage the same?
• How can I reduce my mortgage without penalty?
• What expenses could I have when I purchase Real Estate?
• Should we use several Realtors in our search for a property?
• How do we establish "value" in making an offer?

What is, being "Pre-approved"?

When a purchaser has been "pre-approved" for a mortgage, the lending institution has already analysed his or her financial situation, and determined the amount of money they would qualify for. This amount, plus your down payment, will give you an idea as to how much you are able to afford in the purchase of your home.


What benefit do I have by being "pre-approved"?

Besides knowing your comfort level of affordability, being "pre-approved" could help in the presentation of your offer. For example, if there are two offers on a property, the offer that has the best terms and conditions for the owner, would be accepted. Thus, if both offers were identical, except for subject to financing, the offer without the subject would be looked at more carefully by the owner. Because you are "pre-approved", it would not be necessary for you to put a subject to financing clause in your offer. It is important you have a letter from your lending institution confirming your approval.


Is the term and amortization of a mortgage the same?

No. The term of a mortgage refers to the period of time that your interest rate is calculated before renewing. For example, 6 month, 1 year, 5 year, etc. Before the pre-determined term expires, you renew at the current rates in effect at that time.

The amortization of a mortgage means the number of years (or months) that it takes to repay the mortgage by making regular mortgage payments. This is calculated with the current rate of interest you have chosen with the term. Then your payments (principle and interest) are blended over the amortization of the mortgage.

How can I reduce my mortgage without penalty?       

Talk to your lending institution to find out, in writing, what pre-payment privileges you are allowed on your mortgage. Some pre-payment privileges that may be available, are:

* Paying an extra 10% of the original amount of the mortgage, or less (every little bit extra, saves), on each yearly anniversary date.
* Making bi-monthly payments instead of one payment a month.
* Reducing the amortization period upon renewal.

By taking advantage of these privileges, you could save thousands of dollars in interest over the life of the mortgage, and own your home quicker

What expenses could I have when I purchase Real Estate?      

Here are a few:

• The Property Transfer Tax of 1% of the 1st $200,000 and 2% of the balance. (First time buyers may be exempt)
• Lawyer, appraisal, survey, inspection, mortgage application fees must be paid in cash on completion.
• Mortgage Insurance fees, may be added to the mortgage principle.
• Any statement of adjustments calculated by your lawyer (taxes prepaid by owner, etc.).

This is a basic expense list. Each property purchased will have different expenses. Check with the appropriate authorities, or better still, ask Maggie Marra to assist you.

Should we use several Realtors in our search for a property?

Generally speaking, sit down with a few Realtors and discuss your plans and what it is you are looking for. After the initial meetings, try to select a Realtor that you feel most comfortable with, and arrange to view properties with him or her.

By using one Realtor, you may reduce the time necessary to find that special property, because that Realtor will know and understand your wants and needs, thus you will avoid viewing unnecessary properties. Also, when you have found that special property, you and your Realtor will have established a rapport, and you will feel more comfortable in making an offer with someone you have spent a lot of time with, and who understands your financial situation.

How do we establish "value" in making an offer?

After viewing properties that best suit your needs, you will develop a sense of value of one property over another. Your Realtor will also assist you in determining an offer, by showing you comparable sales or similar properties for sale now, thus establishing a range of values for the property you are interested in. When you are ready, Maggie Marra will write an offer with the proper terms and conditions that suit your needs, and negotiate with the seller on your behalf.