The Edmonton Sun
Page: H6
Section: Homes
Byline: BY CNW

With new MLS listings up 9.4% in January from December, the spring house hunt is not only early, it's off to a roaring start. New MLS listings reached their highest annual level on record in 2004 - an indication that the momentum in January will keep the real estate market hot in 2005. With these competitive conditions, homebuyers need to prepare themselves before they start their house hunts.

The following tips are a "must know" for homebuyers navigating the home buying process:

1. Know what you can afford: A mortgage pre-approval offers peace of mind by helping you determine the price range of homes you can shop for and the maximum mortgage you can afford, but it is not a financing guarantee. Final mortgage approval is based on your information and the property that is to be mortgaged. Mortgage calculators can help you determine the maximum mortgage amount you qualify for based on your income.
   
   
2. Lock in a mortgage rate before you begin shopping for a home: Most financial institutions will lock in a rate for 120 days when pre-approving potential borrowers for a mortgage. Remember to renew the 120-day period if mortgage rates fall during this time, or better yet let a mortgage consultant do this for you.
   
   
3. Be specific about your lifestyle needs: Remember to consider not just the home itself but the property as a whole, including the neighbourhood and its proximity to work, shopping, restaurants and other important places where you'll be spending your time.
   
   
4. Place conditions on your offer: Conditions provide you with the flexibility of withdrawing your offer if you are unable to obtain the necessary financing, or if the inspection reveals structural problems with the home. Even with pre-approval, homebuyers who make an offer without conditions do so at their own peril.
   
   
5. Don’t confuse an appraisal with a home inspection – you need both: An appraisal determines the worth of the property by estimating the market value of the land and building. A home inspection inspects the adequacy and condition of the building .
   
   
6. Have a firm strategy for a bidding war: In today's competitive market, it is not uncommon for vendors to not accept offers until a particular date.
   
   
7. Understand closing costs: When buying a home, it pays to be informed about closing costs, which can represent up to three per cent of the purchase price, including: land transfer tax, lawyer's fees, appraisal fees, title insurance and home inspection fees.
   
   
8. Borrow up to $20,000 for your down payment from your RRSP – tax-free: If you are a first-time buyer, the Home Buyers' Plan (HBP) allows you to withdraw up to $20,000 from your RRSP to buy or build your home.
   
   
9. Know your financing options: Many lenders offer mortgages that feature a five per cent down payment, or in some cases 100% financing. If you borrow more than 75% of the purchase price, your mortgage must be insured by the Canadian Mortgage and Housing Corporation (CMHC) or Genworth Financial.
   
   
10. Don’t do it alone: Mortgage brokers act as a one-stop shop for planning advice and the best rates. Invis (www.invis.ca) mortgage consultants work with prospective homeowners across Canada to provide valuable advice before and during the home-buying process. You can speak to an Invis mortgage consultant directly by calling 1-866-84-INVIS.
    

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604-879-0228

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E: Steven Moyes