Buying A home

Buying A Home

The Great White North sure has a lot to offer to its people. It is a great place to live with exceptional quality of life, thriving communities, and incomparable natural beauty.

A vital investment for most Canadians is real estate, particularly a house – a place they can call home.
If you are looking to buy a house you must be wondering where to start. After all, it is a momentous decision entailing lots of details and you really wouldn’t want to get stuck or confused right in the beginning or worse mid-way during the proceedings.

Readiness

Buying a house is not easy and owning one is a huge responsibility. Before you go ahead with a purchase, ask yourself if you are indeed ready to buy one.

Then, ensure that you have a down payment. That is the very first step towards buying a house. Even if you dont have one at hand, you definitely do need the financial means to save for one.

With a house come responsibilities related to repair and maintenance bills and other expenses. So, you require a steady income to be able to meet your own needs and pay for these costs.

Last but not the least, check your personal and professional readiness before you make such a massive financial decision in your life. Once you are sure you are ready to take this on, go ahead.

Steps to buying a house

Whichever property you decide to buy, whether it is an apartment, a bungalow, a condo, etc., the buying steps are the same. So, here we go.

1. Save up

At the very start, you will require a down payment. You are required to pay at least five per cent of the purchase amount as down payment for a house in Canada. This goes up if the purchase amount is higher.

If you already have the down payment, thats great. In case you dont, youd better start saving up or ask your family for it as a gift.

Try and save up for a large down payment as you will have more equity in your house and will be required to pay lower monthly mortgage payments and smaller mortgage default insurancepremiums. This means saving up on interest too.

Then there are closing costs too, such as title insurance, land transfer fee, lawyers charges, etc., which are three to five per cent of the houses purchase price. Do keep this amount in mind too when you are saving for the down payment.

2. Get things in order

Organise your finances and relevant documents.
For the first, do ensure that all your sundry debts are paid off, such as car or student loan. This will have a positive impact on your credit score too, which in turn will help you borrow easily and comfortably for your mortgage.
Now the second part – paperwork. You will require quite a lot of documents to apply for a mortgage. Some of these are:

a. Sources of income

b. Current employment proofs, like pay stubs, T4, etc.

c. A void cheque

d. List of debts and assets

e. In case of a fiscal gift from a family member, a letter saying the gift is not a loan

Keep these documents ready so that you are not flustered and running pillar to post once these are asked for.

3. Rebates and grants

If you are a first-time buyer, you can take a look at the rebates and grants you are eligible for. After all, why make the home-buying costlier than it has to? Canada offers several such plans and you can avail of them to lessen the burden on your pocket. These are the Home Buyers Plan, Home Buyers Amount, Torontos land transfer tax rebate, and GST/HST New Housing Rebate.

4. Shopping for the best rate

Who doesnt love discounts? Take some time and shop for the lowest mortgage rate. You can use a mortgage broker to help you find the best one. This will help you save a pretty sum in interest over years.

5. Pre-approval of mortgage

You dont have to pay anything to get pre-approved for a mortgage. This step helps you discover lots of pertinent information about the maximum monthly mortgage payment to be paid by you, mortgage interest rate, your affordability regarding buying a house, and more. This knowledge comes in handy when it is time to lock in a mortgage broker and get the deal of your dreams.

6. House hunting

Now that all the important financial and documentation processes are taken care of, it is time to search for a suitable house.

For this, you should ideally contact a real estate agent and start the search.
You can keep these pointers in mind:

  • Be flexible. No house will be ‘perfect. You can make it so once you move in!
  • If the market is competitive, be ready to move in quickly.
  • Put in a little research to convey your exact requirements to the agent so there is no waste of time and effort.

7. Seal the deal

So, you have found the house you love – great news!

You now have to submit an offer of purchase. Once it is accepted, you have to:

  • Pay a deposit
  • Plan for mortgage finalization
  • Arrange a home inspection

Once all of these are done, you have to get the title transferred to your name. This process can take anywhere from a month to 60 days, post which your real estate agent will hand over your keys.

Yippee! You are the owner of your home!

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