When buying a new home, you are faced with a multitude of decisions—the first one is whether you are prepared to purchase a home. Once you have determined that you are ready to buy your first home, the rewards are unquestionable.
1. Decide why you want to buy a home. Do you want to stop paying rent? Start building equity? Raise a family? Find more space?
2. Target a location. Going from general to specific—do you prefer a busy city center? A suburban area? Rural farm? On an island? Schools, rec facilities, transportation, shops, daycare, are also big considerations when deciding your preferred location.
3. Home styles. How much space do you need? Would you prefer a townhouse? A condo? A house? New versus renovation? How many bedrooms? Do you have a pet? Make a wish list.
4. Loan prequalification. This is a big challenge right now, with stress tests and higher interest rates. Talk to your bank or a mortgage advisor so you are comfortable with what you can afford. Get your mortgage rate locked in for 3 months. Be sure to have your down payment available in your bank account as well as your deposit for the purchase contract. If your parents are helping with your down payment you will need a letter of confirmation from them.
5. Your costs before or upon completion are also considerations.
Those expenses include:
• Property inspection.
• Lawyer or notary fees for title registration.
• Survey or title insurance, if required by your financial institution.
• Cost of mortgage (appraisal).
• CMHC Insurance if your down payment is less than 20–25%.
• Home insurance.
• Property Transfer Tax; 1% 1st $200,000, 2% balance, 3% of market value greater than $2,000,000 up to $3,000,000 and 5% of portion over $3,000,000.
• Foreign buyers are prohibited for the next two years.
• Property tax adjustments. You may need to reimburse the seller for taxes paid for the year.
• Moving costs.
Once you are prequalified and know your comfortable price range, your realtor can help you determine which property fits your needs and fulfills your wish list! The top priority is to be sure that your home-buying experience is pleasant, cost efficient and successful.