Looking to buy a home but still have questions?
Here is some important information when you are looking to purchase a home.
Residential Title Insurance
Do I Really Need Title Insurance?
Title insurance is not a requirement in Ontario. The decision on whether or not you should purchase title insurance should be discussed with your lawyer, title insurance company or insurance agent/broker, to fully understand what type of protection title insurance can provide you, and to determine if other options exist. Once you get all the facts, you can make an informed decision based on your specific situation and needs. It is important to keep in mind that title insurance does not replace legal advice when purchasing property.
What Does Title Insurance Cover?
For a onetime fee, called a premium, a title insurance policy may provide protection from such losses as:
■ Unknown title defects (title issues that prevent you from having clear ownership of the property)
■ Existing liens against the property’s title (e.g. the previous owner had unpaid debts from utilities, mortgages, property taxes or condominium charges secured against the property)
■ Encroachment issues (e.g. a structure on your property needs to be removed because it is on your neighbour’s property)
■ Title fraud;
■ Errors in surveys and public records
■ Other title related issues that can affect your ability to sell, mortgage, or lease your property in the future. Your title insurance policy will protect you as long as you own your property, and will cover losses up to the maximum coverage set out in the policy. It may also cover most legal expenses related to restoring your property’s title.
What are the Different Types of Title Insurance?
There are two main types of title insurance policies:
- Owner’s policy – Protects the property owner from various title related losses that are listed in the insurance policy, for as long as the property is owned. An owner’s policy sets a maximum amount of coverage.
- Lender’s policy – Protects the lender from losses in the event that the property’s mortgage is invalid or unenforceable. A lender’s policy usually provides coverage for the amount of the property’s mortgage.
You can purchase title insurance for both residential and commercial properties. Types of residential title insurance include:
■ Policies for new homeowners
■ Policies for existing homeowners
■ Policies for lenders in a residential mortgage
If you are planning to purchase a house or condominium, or even if you already own a home, you may want to consider purchasing residential title insurance. What coverage does residential title insurance provide?
Residential title insurance can provide:
- Comprehensive coverage – It provides comprehensive insurance coverage against losses related to the property’s title. It may also provide coverage for your lawyer’s negligence or errors relating to title risks that are covered by your policy.
- Gap coverage – It insures you for the “gap” between the time your property purchase is finalized (home closing) and the time your title is registered in Ontario’s land registration system.
- Survey coverage – It may eliminate the need for a new uptodate survey of your property. It is acceptable to most lenders as an alternative to a survey or Real Property Report (RPR).
- Legal coverage – The title insurance company will pay for most legal expenses* involved in defending your home’s title.
- Savings of time and money – It simplifies the closing process for your lawyer, thereby saving you time and money.
When is residential title insurance normally purchased?
Residential title insurance is usually purchased when you buy your home. However, you can also purchase residential title insurance anytime after you purchase your home. Note Title insurance policies for existing homeowners are slightly different than policies that are obtained at the time a property is purchased.
How much does it cost?
The cost of residential title insurance varies based on the value of your property, and the insurance company you choose. You will need to pay a onetime fee, called a premium.
How long does the coverage last?
Residential title insurance coverage lasts as long as you own the property. Most residential title insurance policies extend coverage to your heirs through a will, to a spouse in the event of a divorce, or to children when the property is transferred from parents to children for nominal consideration.
Tips for Buyers
Keep Your Money Where it Is
It’s not wise to make any huge purchases or move your money around three to six months before buying a new home. You don’t want to take any big chances with your credit profile. Lenders need to see that you’re reliable and they want a complete paper trail so that they can get you the best loan possible. If you open new credit cards, amass too much debt or buy a lot of big-ticket items, you’re going to have a hard time getting a loan.
Get Pre-Approved for Your Home Loan
There’s a big difference between a buyer being pre-qualified and a buyer who has a pre-approved mortgage. Anybody can get pre-qualified for a loan. Getting pre-approved means a lender has looked at all of your financial information and they’ve let you know how much you can afford and how much they will lend you. Being pre-approved will save you a lot of time and energy so you are not running around looking at houses you can’t afford. It also gives you the opportunity to shop around for the best deal and the best interest rates. Do your research: Learn about junk fees, processing fees or points and make sure there aren’t any hidden costs in the loan.
Importance of a Survey
It’s absolutely essential to get a survey done on your property so you know exactly what you’re buying. Knowing precisely where your property lines are may save you from a potential dispute with your neighbours. Also, your property tax is likely based on how much property you have, so it is best to have an accurate map drawn up.
Don’t Try to Time the Market
Don’t obsess with trying to time the market and figure out when is the best time to buy. Trying to anticipate the housing market is impossible. The best time to buy is when you find your perfect house and you can afford it. Real estate is cyclical, it goes up and it goes down and it goes back up again. So, if you try to wait for the perfect time, you’re probably going to miss out.
Remember Additional Costs
The difference between renting and home ownership is the sleeper costs. Most people just focus on their mortgage payment, but they also need to be aware of the other expenses such as property taxes, utilities. New homeowners also need to be prepared to pay for repairs, maintenance and potential property-tax increases.
Importance of a Home Inspection
A home inspector’s sole responsibility is to provide you with information so that you can make a decision as to whether or not to buy. It’s really the only way to get an unbiased third-party opinion. If the inspector does find any issues with the home, you can use it as a bargaining tool for lowering the price of the home. It’s better to spend the money up front on an inspector than to find out later you have to spend a fortune.
First Time Home Buyer Incentives
As a first time home buyer you are eligible for refunds, benefits and programs not available to other home buyers. For example both the First Time Home Buyers’ Tax Credit and the Land Transfer Tax Refund for First Time Home Buyers are tax breaks that could end up saving you thousands of dollars!
First Time Home Buyers Tax Credit
Introduced in Canada’s 2009 Economic Action Plan, this tax credit is to help first time home buyers pay for costs such as legal fees, disbursements, and land transfer taxes. It is a non-refundable tax credit based on an amount of $5,000. It is calculated by multiplying the lowest personal income tax rate for the year by $5,000. For an eligible individual, the credit will provide up to $750 in federal tax relief.
Land Transfer Tax Refund
When purchasing their first home, buyers are eligible for a tax credit to offset or refund the amount of land transfer tax payable on the purchase of a new or resale home. Claims can be made at the time of registration to offset the cost or within 18 months of the purchase for a refund. Refunds can be any amount up to a maximum of $2,000 depending [as of January 1, 2017 the maximum refund amount will change to $4,000] on the purchase price of the home.
RRSP Home Buyer Plan
This program allows a first time home buyer to withdraw funds from most RRSP’s in order to buy or build a qualifying home. You can withdraw up to $25,000 in a calendar year. You have 15 years to repay the full amount to your RRSP. If you do not repay the amount due for a year, it will be included in your income for that year.
Land Transfer Tax – A provincial tax based on the purchase price of your new home.
Mortgage Insurance – If your down payment is less than 20% of your purchase price, you’ll have to pay mortgage default insurance. The cost of this insurance varies depending on the amount of your down payment and will be rolled into the cost of your monthly mortgage payment.
Legal Fees – There are a number of legal fees involved in the purchase of a home, such as paying your attorney for the title search, deed preparation and registration.
Title Insurance – Protects you from situations such as title fraud or flawed surveys.
Home Insurance – Making sure that your home is insured is a condition of your mortgageYour lender will require you to have home insurance before they release your mortgage to you.
Adjustments – Adjustments are made for things that the seller has paid for, but which you now owe part of because the home is now yours. This could include things like property taxes or rental fees for hot water heaters.
Utility Hookups and Moving – You will be responsible for any utility transfers and costs associated with moving into your new home, such as hiring a moving company.
Find Local Schools
Looking to find local schools in your area?
What My Customers Are Saying
Don’t just take it from me, let my customers do the talking!
“We began working with Ashlyn in May of 2016. It was a necessary life change for us to find main floor living and we were very drawn to Legacy Pines. Ashlyn worked diligently for us. She was highly organized, always accessible and an excellent communicator. Ashlyn worked tirelessly for us. She always negotiates in the best interest of her clients. She proved it by securing our new home in Legacy Pines in August of 2016. We were in a multiple offer situation and Ashlyn knew the sales activity in the neighbourhood intimately. We were prepared to offer 10-15 thousand dollars more than what Ashlyn insisted we offer. Ultimately, Ashlyn’s knowledge of the market ended up saving us thousands of dollars and she successfully got us our dream house.”David and Lea Rutherford
“Ashlyn Trevelyan sold our house in Kleinburg and found our new home in Palgrave. She is honest, considerate, knowledgeable, and quick to respond. Without hesitation, we recommend Ashlyn as a trusted real estate agent”Laura and Ron Pearson
“My fiancé Brad and I started working with Ashlyn in August of 2012. At that point we were interested in looking at farm properties. Ashlyn was very in tune with our needs and graciously drove us all over central Ontario trying to find the perfect farm property for us. A few months later she was successful in finding us the perfect place! We were very excited! She was thorough in how the process worked and we went through the motions with her on every step. Unfortunately this property didn’t end up working out for us due to financial reasons. Ashlyn was never deterred though!
Knowing that we both wanted to get into the real estate market, we changed our course and began looking for our first residential property. Ashlyn did so much research for us and once we narrowed down the area we wanted to live in she helped us find our perfect first home. The whole process was simple, smooth and professional. Our house in Wasaga Beach couldn’t be more perfect for us and we couldn’t have found it without all of Ashlyn’s help. She was with us every step of the way and down the road when we decide to move again we will ask her to help us again.
Thanks Ashlyn!”Melissa Bachmann and Brad Dickinson
“In 2013, early spring I decided to move out of Mississauga to Tottenham. i had heard about the pines, a retirement community and had driven through it previously. I decided I wanted to get a few appointments for viewings of some of the listings, unfortunately one of the agents I contacted was more interested in my financial well being than booking a viewing. I contacted a friend up in that area and she told me about Ashlyn. Within a day, I had 5 viewings booked with Ashlyn and I fell in love with one house in particular. Ashlyn negotiated hard knowing what I was comfortable paying for the property and got me my dream house.
One year later, a neighbour was looking to sell and I recommended Ashlyn to him. I told him she was young but knew her stuff and was very pleasant to deal with. They met, she listed and sold his home in a week.
I lived there for 3 years and Ashlyn would often pop in just to see how I was doing and if there was anything I needed, so kind of her.
I totally renovated the house but after 3 years I decided the lifestyle just wasn’t for me so I contacted Ashlyn to list my property. We listed and also sold in a week for the highest price ever in the pines, we upped the bar that’s for sure.
Finding another home to buy turned out to be a roller coaster ride but Ashlyn never lost her cool. I did, but she went right along the ride with me reassuring me we would find the right house and in time, we did. There were 8 other offers presented on the house I wanted. Ashlyn did extensive research on the area and came up with an appropriate offer for the house and explained the pros and cons of having certain conditions in my offer. Ashlyn got me the house!!!!
I have become quite fond of Ashlyn and we keep in touch, she was not only my agent, but now I consider her my friend.Michelle Redsell