Information for Home Buyers
Whether you're an experienced homebuyer or you're buying your very first home, it pays to do a little research up front! If you have questions related to buying your home please give us a call.
ASSESS YOUR FINANCIAL READINESS
Assess your present household budget and your annual income to determine if you are eligible for a mortgage and how much you can comfortably afford. CLICK HERE for a quick assessment.
Have you been preapproved?
Getting pre-approved for a mortgage before looking at properties gives you a more realistic expectation of what you can afford. Speak to your financial consultant or.CLICK HERE to get preapproved. A financial advisor will also explain all of your mortgage options so you can choose the one that works best for you
Do you know your credit rating? Order a copy of your credit report to make sure it does not contain any errors. For tips on how to order your credit report visit www.itpaystoknow.gc.ca
Are you planning to purchase a property with less than 20% down?
If yes, you will require mortgage default insurance which generally adds .6% - 3.85% to the cost of the mortgage depending on the total amount borrowed.
Mortgage default insurance enables you to purchase a home with a minimum down payment of 5% with interest rates comparable to those of a conventional mortgage.
Major providers of this insurance include CMHC (Canada Mortgage and Housing Corporation), Genworth Canada and Canada Guaranty Mortgage Insurance Company.
The federal government has assistance programs to help homebuyers. Research government program requirements to see if you are eligible.
The First-Time Home Buyers' Tax Credit is a $5,000 non-refundable income tax credit on a qualifying home. The credit provides up to $750 in tax relief to assist first-time buyers with purchase costs.
The Home Buyers' Plan is a one-time withdrawal up to $25,000 from an RRSP by first-time buyers to help purchase or build a home. Generally you have to repay all withdrawals from your RRSP within 15 years.
The CMHC Green Home program - when you use CMHC-insured financing to buy or build an energy-efficient home or make energy-saving renovations, you may qualify for a premium refund of 10% on your mortgage default insurance and a premium refund for a longer amortization period (if applicable). Check out CMHC's website for more information: www.cmhc.ca
FINDING YOUR NEW HOME
Finding your perfect home can be a long process. Your realtor will help you identify the right type of home for you and continually research new listings in neighbourhoods that meet your needs.
Where do you want to live? Urban, suburban or country? Will you need to commute? Access to public transit? Are they schools nearby? These are the questions that your realtor will ask to get a clear picture of your wants and needs.
Based on your preference and price range your realtor will help you decide which type of home works best. To take a look at properties currently listed for sale visit our property search engine, you'll find a quick search on our home page or under the buyer's tab.
MAKING AN OFFER
After seeing many different homes, you have finally found one that you love and have decided to make an offer. What are the next steps?
An offer is a formal, legal agreement to purchase a home. It becomes legally binding once accepted by the seller. Offers can be conditional on one or more factors such as financing or a home inspection. If any of the conditions are not met the contract can be changed or cancelled even if the seller has already accepted it.
You will need to present a deposit along with your offer. The amount varies based on the home's purchase price and the market.
You will need valid government issued ID. Realtor are required to identify clients involved in the buyer and selleing of real estate. They will record your name, address, date of birth and occupation for their files which are kept for at least five years.
Closing costs are the legal, administrative and disbursement fees associated with buying a home. Understanding these fees will help you budget more accurately. Remember that these costs are over and above the price of the home.
The land transfer tax is a one-time tax levied by your province when you purchase a property. The tax is based on a percentage of the purchase price of the property and varies from province to province. Some municipalies (ex. Toronto) charge an additional land transfer tax.
Ontario Land Transfer Tax Explained
0.5% - on the first $55,000
1.0% - on portion between $55,000 - $250,000
1.5% - on balance over $250,000
2.0% - on anything over $400,000
Qualifying first time buyers receive up to a $2000 credit
Legal costs cover your lawyers fees for reviewing the terms of the offer, conducting a title search on the property, registering a new title, obtaining relevant documents such as surveys and evidence of liens on the property, They will also check the statement of adjustments for taxes, utility and fuel bills and other costs that have been pre-paid by the seller at the date of closing.
Other costs that can be incurred are GST/HST on a new home or a home that's been extensively renovated, service charges from utility companies for hook-ups on electricity, gas, internet and telephone services, Appraisal fees, Moving costs, Storage costs if you require them, furniture and appliances.