FAQ about Residential Real Estate answered by Albert Arkilanian

We have put together a list of the top frequently asked questions that most home buyers and sellers have

I’m thinking about buying my first home. Where do I start?
Step 1 is to get pre-approved for a mortgage. A pre-approval lets you know how much you can spend and locks you in at the current interest rate for 90 days or more, allowing you to shop with confidence. This is especially important with a potential interest rate hike by the Bank of Canada in 2022, which may impact your mortgage rate and ultimately, your home-buying budget. Contact me should you require names of mortgage brokers.
Is there a “best“ time of year price-wise to buy a home?
There really isn’t. Prices depend on a number of factors like supply, demand and other housing market conditions. These can vary greatly from city to city, and from one neighbourhood to the next. Rather than season, the numbers of days on market is the biggest indicator of your negotiating power. If the home was recently listed, the seller will have had less time to test the market and gauge buyers’ response to the price, and will be less likely to negotiate. When you decide to move, start the process by cutting the timeframe in half. For example, if you want to move in 6 months start the necessary steps in 3 months. First step is to call me whether you are selling or buying or both.
Can I buy a home with no down payment?
Save up at least five per cent of the purchase price, and consider reducing your home-buying budget to make it more affordable. Aside from your own savings, you can also take advantage of the first-time Home Buyer’s Plan to borrow from your RRSPs – tax free! For more information on this…contact me.
How does mortgage loan insurance work?

There is a common misconception that mortgage loan insurance protects the borrower. This is not the case. Mortgage loan insurance is there to protect the lender against default in payments by the home buyer. If the buyer has a down payment of less than 20 per cent of the purchase price, the lender will purchase default insurance and pass that cost on to the borrower. This can be paid up front or tacked on to the mortgage payments and stretched out over time. Mortgage loan insurance is offered by companies like Canada Mortgage and Housing Corp., Genworth Financial Canada, Canada Guaranty, or another approved private insurer.

The minimum amount you need for your down payment depends on the purchase price of the home. If your down payment is less than 20% of the price of your home, you must purchase mortgage loan insurance.

The minimum down payment based on the purchase price of your home.

Purchase price of your home   Minimum amount of down payment
$500,000 or less
  • 5% of the purchase price (mortgage loan insurance req’d)
$500,000 to $999,999
  • 5% of the first $500,000 of the purchase price (mortgage loan insurance req’d)
  • 10% for the portion of the purchase price above $500,000 (mortgage loan insurance req’d)
$1 million or more
  • 20% of the purchase price(mortgage loan insurance not available for over $1 million)
*Note: Mortgage loan insurance premiums range from 0.6% to 4.50% of the amount of your mortgage. Your premium depends on the amount of your down payment. The bigger your down payment, the less you pay in mortgage loan insurance premiums. Contact me for more information.
How much will I need for closing costs?
Closing costs will typically range from 1.5 to four per cent of the home’s purchase price. These include things like legal and administrative fees and are payable on closing. You can expect to pay for your home inspection, mortgage default insurance if your down payment is less than 20 per cent of the purchase price, the Land Transfer Tax (Welcome Tax), notary fees, and property taxes, among other things. Make sure you budget for this! Feel free to contact me on more clarification on this.
Should I lower the list price, or offer an incentive to sell my home faster?
Reducing the listing price is the way to go, even in a hot seller’s market. It’s critical that you list your home for the right price, in order to attract interest from buyers and generate serious interest in your listing. It would be my pleasure, as your real estate broker, to help you set the right price that is competitive with comparable homes in your area.
What colour of houses sell fastest?
Exterior Paint Colour

Browns or yellows indicate the house was built in the 70’s or early 80’s. Black or grey indicate that the house was either built or repainted in the past decade (which is what we see more often these days).

Front Door

You may want to paint that front door black. According to a 2018 survey black or grey front doors stood to make approximately $6200 more for the seller.

What should I look for in a lucrative investment property?
Whether you’re thinking about resale value down the road, a quick reno-and-flip, or for long-term rental, as a landlord, location is the golden rule of real estate. For investment purposes down the road, it might be tougher to sell a nice house in an unappealing community. Homes near public transit lines typically sell faster and for a higher price.
What does the new mortgage stress test mean?
The new mortgage rules require that all mortgage applicants qualify at a rate that’s two per cent higher than your contracted rate or the Bank of Canada’s five-year benchmark rate. This is to ensure that borrowers will be able to make their mortgage payments should interest rates increase. For more clarification on this, you should discuss with a mortgage broker. I have great ones that I work with which I can refer you to.
Does a higher credit score mean a better mortgage rate?
Your credit score is a measure of your financial health. According to the Government of Canada, your rating indicates the risk you represent for lenders, compared with other consumers…The credit-reporting agencies Equifax and TransUnion use a scale from 300 to 900. High scores on this scale are good. The higher your score, the lower the risk for the lender. Therefore, a higher rating will typically secure a better mortgage rate, since you’re considered to be more likely to make your scheduled payments.

Have questions that are not listed here?

Get in touch with me and I’ll be happy to help you.

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