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Canada Home Purchase

Purchasing a home is complicated process. There are many individuals and companies coming together to make the whole transaction a success. Some participants are obvious and others are not so obvious.

The list starts with seller and buyer. Obviously seller wants to sell the property while buyer is looking to acquire property.

 In most cases each of them will have real estate agent though this is not a requirement.

Mortgage originators who help finance the purchase by matching the buyer with lenders willing to lend money for the purchase. The mortgage originator can be an agent working with many lenders or bank employee arranging mortgages with his or hers bank alone. He or she will advice the borrower on the many choices available and help choose the mortgage product best suited for given borrower based on individual situation as well as future plans and goals.

The lender will have underwriters, employees who will review documentation submitted and decide whether the deal can be financed within the risk the lender is willing to undertake.

The lender might bring in appraiser whose job is to determine the property value based on its condition and the selling price of comparable homes recently sold in the area to make sure that it provides sufficient security for the money loaned.

Some buyers will also bring in property/mechanical inspector to advise them on the condition of the property in question and any possible issues there might be with the property. Usually the inspector will look at the interior and exterior structure including plumbing, electrical work, insulation, heating and cooling system, roof and structural stability. Typically the potential purchaser will contact and pay for a property inspector, but such an inspector may also be retained by the seller of a property.

Another individual playing key role in purchase/sale of a property is lawyer who will assist in review or the Contract of Purchase and Sale, assist with the preparation and review of mortgage documents, ensure all documents have been completed properly, explain all closing documents, check the property against any defaults and to make sure there is no lean placed against the property in the form of loan, bills to be paid for repairs, obtain signatures and record all document with the appropriate local governments, validate identity of borrowers and prepare final Statement of Adjustments. 

Some mortgage providers will also require title insurance which is usually chosen instead of survey to protect the title of the property in good standing. Title insurance compensates the insured for losses resulting from the title not being as stated in the policy. For one time fee title insurance protects the lender against survey error, contravention of municipal by-laws, defects in title, fraud or forgery and other related problems.

And last but not least mortgage insurer might be required to complete the transaction. In Canada high ration mortgages (those representing more than 80% of property value) must be insured against default by either Canada Mortgage and Housing Corporation, Canada Guaranty or Genworth Financial Canada. The borrower as part of mortgage borrowing process will obtain and pay for the insurance.

As you can see real estate transaction is complicated process with many individuals being involved to make everything work out smoothly. Having the right professionals working on your side can make all the difference.

If home purchase is in your plans or if you just want to get more information on the options available to you do not hesitate to contact me for free no obligation expert advice.

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Walter Pawlowski Ontario Mortgage Agent M11002486