Tips for when you buy a
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Corp. and may not be reprinted without permission in writing.
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Reminder to NEW HOME buyers – did you get your REFUND?
Don’t forget to contact your builder after the City in Peel Region has assumed your subdivision, to get your REFUND for the grading deposit builder holdback funds amount that was part of your initial transaction with your builder. Did you sell the house and never requested your refund? You can still contact the builder. The refund has nothing to do with whether or not you still own the house, or whether or not you have sold it and is not part of the work your lawyer takes care of, either. There is no statute of limitations on the timeframe you have to seek your refund, locally.
Even if you buy new, get your own building inspection done as well. Read our article on Building Inspections.
An INSURANCE matter gone askew:
When you bought your new home, were you told that you had to “assume” the insurance that the builder carried during the construction of your home? You will want to check with your lawyer on this one, or at least question your own insurance company, and/or report this behaviour to the insurance watchdog in your area regarding insurance rules and regulations.
Mortgage Cancellation Insurance and Your Life Insurance Policy
If you have a mortgage, either through a bank or any other financial institution, you will be required to obtain “mortgage cancellation insurance”. The bank will insist on it. This is really just Term Life Insurance. However, it would be wise to acquire regular term insurance (at a much less cost), in the amount required to cover the mortgage in the event of your demise. Make sure that all parties registered on title are covered.
You will typically find that the bank will only require insurance on the husband “or” the wife, but not both spouses – generally on the major breadwinner’s life. Many a spouse has found themselves in a financially destitute position when the husband or wife passed away, and “then” they found out that the spouse who passed away was not the one insured regarding the payout of the mortgage.
There are plenty of case files on record to substantiate this information. Buying mortgage cancellation insurance at the bank where you have your mortgage is a very expensive way to buy insurance, because as the mortgage decreases, the insurance you are paying for is still in the initial full amount of the mortgage until it is paid in full, and is not on a decreasing value of the mortgage; and, should someone on title pass away, the only amount you can claim against the mortgage cancellation insurance policy, is the outstanding amount of the mortgage, even though you have been paying for years, based on the initial amount of the mortgage; there is no balance remainder that you can lay claim to (many folks have been caught thinking otherwise). You would also want to check to see if the insurance you purchased was higher because the bank was paying the property taxes. Ask questions.
Better done Sooner, than Later – Get Organized Ahead of Time
When you get prequalified and/or preapproved for your mortgage is the ideal time to make arrangements with your insurance carrier, for insurance on your new purchase. Then all you have to do is provide the property details when you have chosen your next location. Due to insurance underwriters no long being able to write policies once they have reached their monthly or annual quotas, you may find yourself in the position of not being able to buy property replacement insurance. This insurance is not life insurance, it is insurance on the dwelling. Many insurance companies are refusing to write new property policies at all, and many insurance companies are definitely refusing to “transfer” your existing house insurance to your new dwelling. It is vital that you get organized before you make a purchase of a new or a pre-owned home in resale.
Talk to your insurance broker before finalizing your purchase. You do not want any surprises on closing day. You don’t want to find out that your transaction CANNOT CLOSE due to your not aving been able to buy property insurance, and at the last minute discover that the property is simply “not insurable” at any cost. A chain of reactions on other contracts in a queue of closings can put you in the position of being legally responsible for all the costs incurred by the other parties on their purchases and sales.
If you have any questions contact Carolyne Realty Corp. or your own Realtor. Contact your attorney. Contact your insurance company. Make sure you are not the one held responsible for other people’s costs and expenses due to negligence caused by your inattention to these matters.
*This material is copyrighted by Carolyne Realty Corp. and may not be reprinted without permission in writing.
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