... at the centre of your financial wellnessHome Buyers Guide

Axis Mortgage Inc is an independent member of the Verico Mortgage Broker Network

Introduction

Who We Are

Purchasing Support

The Home Buying Process

Your Support Team

Required Documents

Closing Costs

Checklists

Payment Calculations

Suggested Websites

INDEX

AXIS MORTGAGE INC!

Congratulations!

Buying a new home can be such a rewarding experience. This guide has been created to help you through the steps of purchasing your new home. Whether you are buying a condo, house, fixer-upper, or building a new home, this guide will help you navigate the process. It will explain who the participants are in the home buying process and what they do. It will also help you understand the mortgage approval process, and the costs involved in purchasing a home. The guide will provide you with reliable answers to your questions. Congratulations on buying your new home.

HOME BUYERS GUIDE"

Axis Mortgage Inc.We have been providing clients with leading mortgage solutions since 2001. Our commitment to your overall financial wellness is evidenced by the vast number of services and exclusive programs we offer.

When looking for the best interest rate and product it is important to work with a company with significant buying power. Axis Mortgage Inc. is an independent member of the Verico Mortgage Broker Network, Canada’s largest Mortgage Network. We will shop your mortgage to any number of lenders until you end up with the package best suited for your vision.

Every Axis Mortgage associate is working towards or is in possession of their AMP designation. The Accredited Mortgage Professional designation is an indication of the high level of standards and ethics we follow. In addition to your substantial mortgage savings you may be eligible for FREE cash and other incentives if you enroll in our bundled service program. You will be happy you asked about this exclusive offering!

Who We Are

Who We Are#

Purchasing Support

So you have decided to purchase a new home and you are stressed out. Don’t worry, whether you are purchasing privately, with a Realtor, or from a home-builder there will be support in place. You may have many questions, such as when and where do I give my down payment money?, when do I sign papers at the lawyer’s office?, etc. Our team at Axis Mortgage Inc. will see to it that these questions are answered. If you are working with a Realtor or home-builder we will be in contact with them to see that the timing of your transaction is smooth.

Your offer will be subject to the approval of your mortgage qualification. In this process we will be in contact with your Realtor or home-builder to see that we have the proper documentation to work with. We will also see that they are “kept up to speed” on the progress of your file. They will be notified just after you are notified that your financing is in place.

The Lawyer that you have selected to register your new mortgage will be an integral part of your transaction. Your Axis Mortgage planner will see that the lawyer receives the required documents in a timely fashion.

If you are looking for the ultimate in purchasing support then remember to ask about our exclusive Bundled Service Program. With this program we will be your main point of contact. In allowing us to work directly with the other required participants in your home purchase you will receive FREE cash at closing while you can just sit back and relax knowing all your needs are taken care of.

Purchasing Support

If you are looking for the ultimate in purchasing support then remember to ask about our exclusive Bundled Service Program.

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The Home Buying Process

Step 1: Pre-ApprovalWhen you first decide you want to purchase a home, it is wise to get a pre-approved mortgage. The pre-approval will tell you how much you qualify for, ensuring you are looking at homes in your price range. This will also act as a rate hold for you. Most lenders will hold your rate for 90-120 days. If you require a longer rate hold that may be available, it is important to ask about it.

The Home Buying Process

Step 2: House HuntingOnce you know your price range, your Realtor will begin researching the available properties and will show you homes that fit your criteria.

Step 3: Offer In and AcceptedOnce you’ve found the home you are interested in, you will make an offer. The offer will be “subject to financing,” meaning that the offer depends on whether or not you are able to obtain a mortgage. Your offer may also have other conditions, such as “subject to a satisfactory home inspection” or “subject to review of the condominium documents.” Once the offer is accepted, you will provide a copy of the purchase agreement along with the property feature sheet to your mortgage planner.

Step 4: Lender, Insurer, AppraisalYour mortgage planner will work with the lender, insurer, and appraiser (if required) to get you final approval on the financing. Your mortgage planner will ask you for further documentation at this time. You will need to collect the requested paperwork and submit it in a timely fashion.

A pre-approval will tell you how much you qualify for and will act as a rate hold

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The Home Buying Process

Step 5: Firm SaleOnce you have met all of your financing conditions, your mortgage planner will instruct you to remove the “subject to financing” condition from your purchase contract. This is done with your Realtor. You may remove other conditions at the same time (if they have been met), such as “subject to a satisfactory home inspection.” Once all of the conditions are satisfied, you have a “firm sale.” Instructions from the lender as well as our office will be sent to the lawyer’s office at that time.

Step 6: Moving DetailsThe lawyer is now receiving and preparing the mortgage documents. Use this time to start preparing for the move. See the moving checklist for some of the steps you may need to take.

Step 7: LawyersThe lawyer will call you in to sign, usually as soon as they can have you in. This is when the lawyer will ask for the remainder of your down payment. The completion date is the day the money is given to the sellers and the property is transferred to your name.

Step 8: Move InUsually your possession date will be the day after the completion date. This is the day that you receive keys and can move into your new home.

Step 9: First Mortgage PaymentUnlike with rent, which is paid at the beginning of the month, you make your mortgage payment at the end of the month. For example, if the purchase of your home was completed on June 1, and you chose monthly payments, you will not have a mortgage payment until July 1 (at the end of one month). If you chose weekly payments, the payments would come out at the end of every week. You will receive the details of the mortgage repayment from your mortgage lender.

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Your RealtorYour Realtor is your partner in the home buying process. Once your Realtor understands what type of home you are looking for, he or she will begin researching the market on your behalf. The Realtor will search all of the available properties for sale and will show you the ones in your price range that meet your criteria. Once you have found the home you are interested in, your Realtor will prepare an offer and represent you in the negotiation process.

Generally you do not pay a fee to the Realtor who represents you. The Realtor is paid by the seller of the home. Realtors are licensed through provincial bodies and are knowledgeable about the markets they work in.

Your Support Team

If you enroll in our Bundled Service Program we will see to it that you are set up with a Realtor who specializes in the area and type of home you are looking to purchase. The Realtor will have purchase options available for you before you even meet them.

Your Mortgage PlannerYour Axis Mortgage Planner is another key partner in the home buying process. He or she will take time to understand your financial needs and will research the market to find the best mortgage for you. Your mortgage planner will represent you to the lenders, and will negotiate terms on your behalf. Usually there are no fees to use a mortgage planner, as they are paid by the lender, however there are instances where fees are required to secure your financing. If this is the case, fees will be disclosed to you long before you make your final decisions.

When you purchase your home, there are a number of key players who will help you throughout the process.

LenderYour mortgage planner, based on your input, will choose the lender that best suits your requirements. Any contact with your lender can be done in one of a number of ways. Continue to use your mortgage planner for full service, use an online banking program provided by the lender, or contact the lender directly.

Your Support Team(

InsurerIf you have less than 20% of the value of the property as your down payment, you will be required to have mortgage insurance. Mortgage insurance protects your lender against any losses incurred. Your mortgage planner and lender will arrange this insurance for you. The mortgage insurance companies in Canada are Canada Mortgage and Housing Corporation (CMHC), Genworth Financial and Canada Guaranty. The insurer charges the lender a premium for this coverage and the lender then charges you that same premium amount.

AppraiserThe appraiser’s role is to provide the lender with a market value of the home. The market value is the price at which the home would sell with reasonable exposure on the market to a large number of buyers. Your mortgage planner will arrange the appraisal for you. If you are putting less than 20% down there will likely not be an appraisal required as the insurer will appraise your home with their internal computer systems. If you are putting 20% or more down the appraisal will carry a cost to you.

Home InspectorA home inspector provides you with information on the construction of your home. The inspector will inform you of any repairs that need to be done in the near future, and will let you know what types of repairs you can expect in the next few years.

LawyerYour lawyer (or notary) will transfer the property to your name, and will draw up and register the mortgage documents. Your lawyer liaises with your lender and Realtor to ensure they have all of the required paperwork to process the sale.

Required Documents

Required Documents

In order to process your mortgage application, mortgage planners require documentation to support your mortgage application. Required documents can be as individual as your mortgage and may mean the following list would need to be expanded.

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Proof of IncomePlease provide the following documents for proof of income: Employees: Employment confirmation letter

- If you are salary, confirm your salary amount and length of employment - If you are paid hourly, confirm your pay per hour, number of hours worked per week, and length of employment 2 most current pay stubs

Previous 2 years Revenue Canada Notice of Assessment*

Commissioned or self-employed:

Three years of financial statements Three years of Notices of Assessment

Down Payment VerificationThe insurer usually does not allow a down payment to be borrowed. This is why we verify the source of your down payment. Please provide the following documents:

If your down payment is from savings in your bank account, provide three months of bank statements. The statements must state your account number and name and be the three most recent statements.

If your down payment is from investments (RRSP, GIC, stocks, bonds), provide a copy of a recent account statement. For those who have not owned a home in the previous 4 years you are eligible to use your RRSP tax FREE under the Home Buyer’s Plan. You don’t want to miss out on this opportunity.

If your down payment is a gift, a “gift letter” is required together with proof that the funds have been deposited into your bank account. Again please make sure that your bank statement has your name and account number on it.

Additional DocumentationPlease provide the following additional documentation:

Offer to Purchase and MLS listing for the new property

Offer to Purchase and all condition removals for the existing residence if you are selling one Void cheque for the account from where your mortgage

payment will be withdrawn

Name and number of the lawyer you will use for this transaction

*Notice of Assessment is the summary form Revenue Canada sends after your income tax has been filed. It specifies what you claimed on your taxes last year. If you do not have a copy of your Notice of Assessment, you can call Revenue Canada at 800-959-8281 or visit them on line from the link in our resources section to obtain a copy.

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1. Legal Fees A lawyer or notary will be necessary in the home buying process. Your lawyer will prepare the mortgage documents, have you sign the documents, and will transfer the property to your name. The cost may vary depending on the lawyer and the work required. Our estimate is approx. $800-1200. Axis Mortgage does not set the price of legal work.+ +2. Appraisal FeesAn accredited appraiser will look at your home and determine if the price you have offered is what the home is worth. The appraiser will compare recent sales of similar properties to determine the estimated value of your home. He or she will provide a report to your lender that confirms the value. This is only required if you are putting more than 20% down (in most cases). Costs are estimated at $300-400.

Closing Costs

3. Property Purchase TaxN/A in most provinces.

4. Property Tax AdjustmentYou may have to pay some of your annual property taxes at the time of closing. This would be done when you sign at the lawyer’s office. Because every situation is different, it is best to confirm with your lawyer and mortgage planner what you will owe.+

The following is a list of closing costs homebuyers can expect with their mortgage. Be prepared for:

5. Interest AdjustmentIf you have chosen monthly mortgage payments, and your payment comes out on the first day of the month, you may have an interest adjustment. If the purchase of the home closes on May 29, for example, you will have to pay for three days of interest on your mortgage (May 29-31). If the purchase closes earlier in the month, you may have a larger interest adjustment. Interest adjustments are calculated using the interest rate of your new mortgage. It is best to find out from your mortgage planner what your interest adjustment will be.

6. Title Insurance Title insurance is sometimes used instead of a survey or real property report, and may be requested by your mortgage planner, lender, or lawyer. Your mortgage planner, lender, or lawyer will discuss title insurance with you if it is applicable for your transaction. Costs are estimated at $200-300.+ + + +

7. Fire Insurance Fire insurance ensures you have adequate coverage to pay off your mortgage in the case of fire. The lawyer will want proof that there is fire insurance in place when you go in to sign the papers. Ask your mortgage planner for a referral to an insurance agent who will be able to assist you. Cost will vary depending on the value of the home and the insurance provider.

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Closing Costs

8. High Ratio Insurance PremiumWhen borrowers have less than 20% of the value of the property as a down payment, they must pay a mortgage insurance premium. The premium varies, so you should check the amount with your mortgage planner. Most people will add this premium onto their mortgage, however you also have the option of paying this amount up front. This premium is charged to you by the insurer, through the lender.

9. Home InspectionMany people choose to have a home inspection, although most of the time it is optional. A home inspector will look through your home and provide you with his or her professional opinion on the construction of the home. They will advise of any maintenance required, and will let you know what kind of maintenance you can expect in the next few years. Costs will vary but are estimated at $300-400.

10. Mortgage Processing Fees+Depending on your application, you may have a mortgage processing fee. This is a fee charged by the lender and/or mortgage planner to process your application. These fees will be disclosed to you prior to you proceeding with a mortgage commitment. These fees are a rarity with Axis Mortgage Inc., and are only applicable under certain circumstances.+

11. Survey+Most financial institutions require surveys or real property reports. Surveys confirm where the home is sitting on the lot and make the lender aware of anything unusual about the property. You may be able to get an acceptable copy of the survey from the previous owners, and save the survey fee. Title Insurance is often used in place of a survey.

12. Utilities Connection Charges Some utility providers charge a move or connection fee. You will need to contact each utility provider to find out their charge.+

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Legal Fees $

Appraisal Fees $

Property Purchase Tax (if applicable) $

Property Tax Adjustment $

Interest Adjustment $

Title Insurance $

Fire Insurance $

High Ratio Insurance Premium $

Home Inspection $

Mortgage Processing Fees $

Survey $

Utilities Connection Charges $

Other $

Total estimated cost $

Cost & Moving Checklists

The following list allows you to keep track when you buy your home.

Checklists)#

Service TelephoneDate

Completed

Movers

Fire Insurance Company

Gas Company

Power Company

Telephone Company

Internet Service Provider

Post Office

Car Insurance Company

School(s)

Credit Card Providers

Bank

Magazine Subscriptions

Employer(s)

Sporting/Recreational Groups

Health Care Provider

Use the following list as a reminder of those you need to contact. Notify these providers approximately 1-3 weeks prior to your move

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Payment Calculations)$

Payment Options & Calculations

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!!!!!!!!! % Factor ($)

2.00 $ 3.69

2.25 $ 3.81

2.50 $ 3.94

2.75 $ 4.07

3.00 $ 4.20

3.25 $ 4.34

3.50 $ 4.47

3.75 $ 4.61

4.00 $ 4.75

4.25 $ 4.89

4.50 $ 5.04

4.75 $+5.18

5.00 $ 5.33

5.25 $ 5.48

5.50 $ 5.63

5.75 $ 5.79

6.00 $ 5.94

6.25 $ 6.10

6.50 $ 6.26

6.75 $ 6.42

7.00 $ 6.58

7.25 $ 6.74

7.50 $ 6.91

7.75 $ 7.07

8.00 $ 7.24

8.25 $ 7.41

8.50 $ 7.58

8.75 $ 7.75

9.00 $ 7.92

9.25 $ 8.10

9.50 $ 8.27

9.75 $ 10.15

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Payment Rate

Payment Amount

Years to Pay Off Mortgage

Estimated Interest Paid over

the Mortgage’s Lifetime

Monthly $639.87 25 years $91,940.85

Bi-Weekly Accelerated

$319.93 21 years $74,927.96

This example is based on a $100,000 mortgage with a 6% interest rate calculated semi-annually, not in advance, and assumes that the interest rate remains constant for the full 25 year amortization period.

Factor ! = Monthly payment

e.g.) 4.47 ! = $447

100,000

Mortgage Amount

1000

1000

Advantage of Frequent Payments !Paying off your mortgage is a more flexible process than you may think. By taking advantage of options that allow you to pay more frequently, you will pay the mortgage faster and save thousands of dollars on interest.

To estimate your monthly payment, follow this example:

You can calculate your estimated monthly mortgage payments, using the following table, considering the amount borrowed, interest rate, and amortization period. For truly accurate payments you should contact your Axis Mortgage Planner.

Homebuyer’s GuideAxis Mortgage Inc.

201, 704 5th Avenue SouthLETHBRIDGE a

AB T1J 0V1Phone 403.381.3790 Fax 403.381.3798

Home Buyers Guide

Axis Mortgage Inc.201, 704 5th Avenue SouthLethbridge AB T1J 0V1Phone 403.381.3790 Fax 403.381.3798

... at the centre of your financial wellness

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