You’re ready to buy a home! Before you begin searching for a home, make a detailed "wish list" of what you want. I will help you prioritize your list and suggest features you may overlook. First, you need to decide the neighborhood you’re going to call home. Location is just as important as the property you choose. Decide what you need in a neighborhood. Do you have children that are school age or will soon be? Are you single without a vehicle and using local transit? Are you downsizing from a large home in the suburbs? When you have determined your requirements, I can quickly source information about potential neighbourhoods, pricing trends and community information and suggest areas that seem best suited to your requirements. Second, think about the type of home you want, for example, condominium, townhouse or single family, new or resale, and the amount of space you need.
What you can afford?
Before you start looking for a home, determine how much you can afford. The main home buying expenses include the down payment, the mortgage and the completion costs. Current interest rates will affect the amount you can afford.
Down Payment
For a conventional mortgage, you must pay at least 20% of the purchase price as a down payment. However, you can find mortgages that require as little as 5% down payment that are fully insured by CMHC.
The Home Buyers' Plan, a federal government initiative lets eligible home buyers withdraw up to $25,000 from their RRSP to buy/build a qualifying home. If you buy the home with your spouse or common-law partner, or other individuals, each individual can withdraw up to $25,000 from his or her RRSP, provided each of you meet the HBP conditions. For information go to www.cra-arc.gc.ca and in the search box enter home buyers’ plan or phone 1-800-959-8281.
Mortgage
Most homebuyers will need a mortgage. Ask Tom Kotarac to calculate how much you’re eligible to borrow based on your income and level of debt. And even if you are self-employed, you can still qualify.
Completion and Other Costs
There are additional costs when you buy a home. These include mortgage insurance, taxes, legal fees, house insurance, inspection reports, appraisal and survey fees. If you are a first time homebuyer, you may be exempt from the Property Transfer Tax.