1. Financial Planning To avoid any future surprises, you can do some financial preparation to see where you stand. It includes: calculating your net worth, your current monthly expenses and your current monthly debt payments.

Knowing your net worth is important because you will need this information when you discuss a mortgage with your mortgage provider. Your net worth is the amount left over once you've subtracted your total liabilities from your total assets. It will also give you a snapshot of your current financial situation and show you how much you can afford to put down as a down payment.

Next, determine your current expenses and debt payments. This will help you see what your actual monthly obligations are and what kind of mortgage payment you can comfortably fit into your budget.

The first affordability rule is that your monthly housing costs shouldn't be more than 32% of your gross household monthly income. Housing costs include monthly mortgage principal and interest, taxes and heating expenses - known as P.I.T.H. for short. If applicable, this sum also includes half of monthly condominium fees and the entire annual site lease (in the case of leasehold tenure). Mortgage providers add up these housing costs to determine what percentage they are of your gross monthly income. This figure is known as your Gross Debt Service (GDS) ratio. Remember, it must be 32% or less.

The second affordability rule is that your entire monthly debt load shouldn't be more than 40% of your gross monthly income. This includes housing costs and other debts, such as car loans and credit card payments. Mortgage providers add up these debts to determine what percentage they are of your gross household monthly income. This figure is your Total Debt Service (TDS) ratio.

There are also costs required to purchase your home. You want to budget for them.

The upfront fees are:

• Mortgage loan insurance (if you are putting less than 20% of the house price as a down payment you will likely require mortgage insurance to protect the mortgage funder. The amount can be included in your mortgage).
• Inspection

  Inspection

  The examination of the house by a building inspector selected by the purchaser.

  fee (a report on the condition of the home - $250-400)
• Appraisal

  Appraisal

  The process of determining the value of property, usually for lending purposes. This value may or may not be the same as the purchase price of the home.

  fee (gives you a sense of the worth of the property - not always required)
• Deposit

  Deposit

  When making an offer, the purchaser must deposit a sum of money to be held in trust by the vendor’s agent, broker, lawyer or notary until the closing of the transaction.

  (when you sign the offer to purchase - 5% of purchase price will be required)
• Down payment (typically 5% to 25% of the property price)
• Estoppel Certificate (only if you are buying a condo - $100)
• Land registration fees (commonly referred to as land tax). Most provinces levy a one-time tax when you buy a home (subject to change). The tax is based on a percentage of the purchase price of the property, and varies from province to province. In Ontario, for example, the rate is ½% on the first $55,000 of the purchase price, 1% on the next $195,000, 1.5% on the next $150,000 and 2% on the remainder.
• Prepaid property taxes and/or utilities (an adjustment to cover the seller for the portion of the fees paid)
• Property insurance (to protect your home against damage. e.g. fire insurance)
• Survey

  Survey

  The legal written and/ or mapped description of the location and dimensions of your land. The survey should also show the dimensions and placement on the lot of any structure, including additions such as pools, sheds and fences. An up-to-date survey is often required by a lender as part of the mortgage transaction.

  certificate (may be required - $1000 to 2000).
• Legal fees and disbursement fees ($500+GST)
• Title insurance

Additional fees may include:

• Moving expenses
• Window coverings
• Service hook up fees
• Renovations and repairs
• Appliances
• Condo fees

2. Mortgage Pre-approval The mortgage provider will look at your finances and conduct a credit bureau to uncover whether you qualify for a mortgage.

The mortgage provider will give you a written confirmation or certificate for a fixed interest rate good for a specific period of time.

Some buyers may not wish to pursue a mortgage pre-approval until they have found the home they want to buy. However, the idea of having a pre-approved mortgage amount makes the search for your new home much easier and less time-consuming because you have a good price range in mind.

Some of the things you will need to have with you the first time you meet with a mortgage provider are:

• Your personal information, including identification such as your driver's license
• Details on your job, including confirmation of salary in the form of a letter from your employer
• Your sources of income
• Information and details on all bank accounts, loans and other debts
• Proof of financial assets (e.g. copies of bank account statements)
• Source and amount of down payment and deposit
• Proof of source of funds for the closing costs (these are usually between 1.5% and 4% of the purchase price)

3. Real-estate Services No one will play a more important role in helping you find a home than your real estate agent. Your real estate agent's job is to:

• Help you find the ideal home.
• Write an Offer to Purchase.
• Negotiate on your behalf to help you get the best possible deal.
• Provide you with important information about the community, arrange and coordinate the home inspection and essentially save you time, trouble and money.

4. Offer to Purchase Once you have found the home you would like to purchase, you need to present the vendor with an Offer to Purchase or an Agreement of Purchase and Sale.

Any Offer or agreement will typically include:

• Your legal name, the name of the vendor and the legal civic address of the property.
• The purchase price offered.
• The chattels that will be included in the purchase price (e.g.: window coverings, appliances or a satellite dish). Whatever items in or around the home that you think are included in the sale should be specifically stated in your offer.
• The amount of deposit.
• The closing day (date you take possession of the home) - usually 30 to 60 days from the date of agreement. It can also be 90 days or longer.
• Request for a current land survey of the property.
• Date when the offer becomes null and void.
• Any other conditions that go with the offer, including property inspection and approval of mortgage financing.

When you make an Offer to Purchase, your real estate agent or your lawyer/notary will most likely add certain conditions to it, making it a conditional offer. This means that the contract will only become final when the conditions are met. The following three conditions are generally standard in an Offer to Purchase, especially for first-time buyers:

• A satisfactory home inspection report
• A property appraisal
• Mortgage provider approval of mortgage financing to finance the purchase

Once these requirements are met, the conditions are removed and the Offer to Purchase becomes final.

There are three situations that could play out during your presentation of an Offer to Purchase:

Situation 1:The seller accepts your offer. The deal is concluded.

Situation 2:The seller may make a counteroffer, asking for a higher price or different terms. You sign the offer back to the vendor with a higher price than your original offer, but lower than the vendor's counteroffer. The vendor accepts this counteroffer. The deal is concluded.

Situation 3:The seller may make a counteroffer. You reject the counteroffer and decide not to make a subsequent counteroffer. The sale doesn't go through and your deposit is returned.

5. Home Inspection The home inspector's role is to inform you on the property's condition. He will tell you if something is not functioning properly, needs to be changed or is unsafe. You will also be informed of repairs that need to be done and he/she may even be able to tell you where there may have been problems in the past. When you receive the home inspection report, you and your real estate agent will have to discuss how required repairs may affect the sale price that was agreed upon. Every inspection should include an evaluation of at least the following:

• Foundation
• Doors and windows
• Roof and exterior walls
• Attics
• Plumbing and electrical systems
• Heating and air conditioning systems
• Ceilings, walls and floors
• Insulation
• Ventilation
• Septic tanks, wells or sewer lines
• Any other buildings such as a detached garage
• The lot, including drainage away from buildings, slopes and natural vegetation
• Overall opinion of structural integrity of the buildings
• Common areas (in the case of a condominium/strata or co-operative)

6. Home Appraisal Having an independent appraisal done on a property before you make an offer is a good idea. It will tell you what the property is worth and help ensure that you are not paying too much. Your mortgage provider can also ask for a recognized appraisal in order to complete a mortgage loan.

The appraisal should include an unbiased assessment of the property's physical and functional characteristics, an analysis of recent comparable sales and an assessment of current market conditions affecting the property.

7. Full Mortgage Application A pre-approved mortgage certificate is not a guarantee of being approved for the mortgage loan. Even if you have a pre-approved mortgage certificate, you must still meet your mortgage provider during the conditional offer period to get a final mortgage approval. To ensure that the process goes smoothly, make sure you bring: A copy of the property listing, a copy of the signed Offer to Purchase and confirmation of your income.

Your mortgage provider will update/verify your financial information, the property and other information required to complete the mortgage application. Your mortgage provider may require an appraisal and/or a survey. Title insurance may also be required. Your mortgage provider will also review the commitment letter from the mortgage provider and inform you on the various types of mortgages, terms, interest rates, amortization periods and payment schedules available.

You will then sign the required documents which the broker will then forward to the mortgage provider.

Information required:

• Social Insurance Number
• Current address
• Previous address (if current address is less than 3 years)
• Current employment information (e.g. employer's address, telephone number).
• Previous employment information (if current employment is less than 3 years)
• Sources of verifiable income (e.g. pay stub, employment letter, bank statement confirming direct deposit, investment statement). If self-employed, the last 2 years Notice of Assessments from your Income Tax return
• Value of properties, automobiles, investments, and savings
• Most recent mortgage/loan statements
• Current banking information
• Most recent credit card statements
• Estimated value of your home
• Housing expenses (e.g. Property tax, annual condo fee, heating costs)
• Financial information for your co-borrower if applicable vAddress and contact information for your lawyer or notary
• Copy of MLS listing
• Evidence of your down payment amount

8. Get Insurance An insurance broker can help you with your insurance needs, including property insurance and mortgage life insurance. Mortgage providers insist on property insurance because your property is their security for your loan. Property insurance covers the replacement cost of your home, so premiums may vary depending on its value.

You are required by the mortgage lender to have fire insurance effective at the time you legally take possession of your new home. Some insurance companies may demand proof of a home inspection or may not insure certain types of dwellings. Make sure that you enlist your insurance agent early.

Your mortgage provider may also suggest that you buy mortgage life insurance. Mortgage life insurance provides coverage for your family should you die before your mortgage is paid off. This type of insurance is often available through your mortgage provider, who then simply adds the premium to your regular mortgage payments. However, you may want to compare rates between both an insurance broker and your mortgage provider.

The insurance company will require the following details which you can likely get from your inspection certificate, If not, make sure you ask your inspector for the answers:

• Complete address with postal code
• Age of House
• Structure (detached, semidetached, …)
• # of Stories (bungalow, 2 story, split level, …)
• Square footage without basement
• If finished basement was % is finished
• What type of roof shingles (asphalt, clay, metal)
• Garage (detached, semi, # of cars)
• Swimming pool
• Fireplace
• Heat pump
• Central Air conditioning
• If furnace oil or gas.

If property is older than 35 yrs:

• Years of update for roof, heating, wiring and plumbing.
• Wiring material (e.g. copper or knob and tube)
• Circuit breaker or fuses
• Amp service level (e.g. 200 Amps)
• Oil tank or wood stove or furnace
• If oil tank or wood stove, year installed and location
• Material of hot water pipes and waster pipes
• Any water pressure problems

Your lawyer will require your insurance binder number

9. Get a Lawyer You need a lawyer (or a notary in Quebec) to protect your legal interests such as ensuring the property you are thinking of buying does not have any building or statutory liens or charges or work or clean-up orders associated with it. He or she will review all contracts before you sign them, especially the Offer (or Agreement) to Purchase. Having a lawyer/notary involved in the process will give you peace of mind and ensure that things go as smoothly as possible.

Closing day is the day when you finally achieve your goal -you take legal possession and finally get to call your new house your own. You are sure to feel great relief and satisfaction but remember that the homebuying process isn't over just yet. There are quite a few things that need to be done on closing day:

• Your mortgage provider will provide the mortgage money to your lawyer/notary.
• You must provide the balance of the purchase price to your lawyer/notary along with the closing costs.
• Your lawyer/notary pays the vendor, registers the home in your name, provides you with a deed and the keys to your new home.

10. Essentials This is the perfect time to review your communications needs and to explore getting a better deals for the services that you require.

11. Renovations:

12. Logistics: It is now time to hire a mover. Ask the mover for references. You will also want an estimate and outline of fees (flat rate or hourly charge, etc.). Once you've selected a mover, it is a good idea to have the representative come to your home to see what will be moved and revise the estimate if necessary.??During the move, you'll want to ensure that your belongings are insured. Your home or property insurance may cover goods in transit but call your broker or insurance company to be safe and to ask about the extent of coverage. Many moving companies offer additional insurance coverage. Be aware that professional movers are not responsible for items such as jewelry, currency or important papers. You will have to move these yourself.