Are you about to purchase your 1st home?

Congratulations!

What an exciting and full time in your life. There are so many boxes to check and things to look for, we are here to help.

 

This page is for you – to take a little of the overwhelm out of this experience so that you can start celebrating and get comfy in your new space!

First things first

Are you financially ready to own a home? Look into these top 4 calculations and questions before you meet with your broker or lender.

How much can you afford?

Compare how much you currently spend on expenses and debt payments with the amount you have saved or invested. (According to Canada Mortgage and Housing Corporation (CMHC), your monthly housing costs should not be more than about 35% of your gross monthly income. This includes costs such as mortgage payments and utilities. Your entire monthly debt load should not be more than 42% of your gross monthly income. This includes your mortgage payments and all your other debts.)

In order to buy your first cozy place you need a down payment. You also need money to pay for the upfront costs, such as: home inspection and appraisal fees insurance costs (Get your quote here, whenever, wherever you are) land registration fees prepaid property taxes or utility bills (the buyer reimburses the seller or builder) legal or notary fees – We have a few favourite Law Firms, reach out for recommendations! potential repairs or renovations (Hey, hey new Kitchen Sink) moving costs GST/HST/QST on a newly built house or mortgage loan insurance

Make saving part of your monthly budget. Most employers deposit your pay directly into your chequing or savings account. Increase your chances of reaching your savings goals by setting up automatic transfers to a savings account each pay cheque! Use the Financial Goal Calculator to help you determine how long it will take you to reach your savings goals.

How much would you be spending each month with these new home expenses added to your current financial situation? Remember! Count in your prospective Mortgage @ the current mortgage rates, include property tax, all utilities and possible monthly repairs. Keep in mind you may need lots of little extras on this first purchase, such as Lawn Mowers, Weed Wackers, Seeding, Paint etc.

This shows lenders your ability to consistently pay bills & debts as well as your debt to income ratios. Click here for more information about your credit score.

All about mortgages

Lenders may have different interest rates and conditions for similar mortgages. Talk to several lenders to find the best mortgage for your needs! Mortgage lenders – These institutions lend money directly to you. Explore the different types of lenders that are available, including banks and credit unions. Mortgage brokers – They don’t lend money directly to you. Mortgage brokers arrange transactions by finding a lender for you. Since brokers have access to many lenders, they may give you a wider range of mortgages to choose from. The lender pays a commission to the mortgage brokers, so there’s no cost to you. Need a recommendation? Click here to chat with our super friendly team within minutes Important note! Generally when buying your first home, you can leverage the First Time Home Buyers Incentive of 5-10% for a Down Payment cost. This means that you will need Mortgage Insurance because you are making a down payment less than 20%. Keep reading!

If your down payment is less than 20% of your home’s price, you need to purchase mortgage loan insurance. Mortgage loan insurance protects the mortgage lender in case you’re not able to make your mortgage payments. It does not protect you. Mortgage loan insurance is also sometimes called mortgage default insurance. This can change your approval depending on the lender.

The Government of Canada offers two tax credits for specific types of homebuyers. Your provincial or territorial government may also offer other home-buying incentives. The Home buyers’ amount You get access to this tax credit when you purchase your first home and submit a tax return. It’s an effective means of offsetting some of the upfront costs associated with buying a home. You could receive up to $750. Find out if you’re eligible for the Home buyers’ amount.

The nitty gritty

You have to pay legal fees on your closing day. This is the day that your home purchase is complete. These fees are usually range between $400 to $2,500 but will vary depending on your lawyer’s or notary’s rates. Again, let us know if you want recommendations on where to go, we have #insurancepartnerships everywhere and would be happy to help.

Why do I Need a Lawyer? A lawyer or notary can help protect your legal interests. They make sure that the home you want to buy does not have a lien against it (A lien is a legal claim over another person’s property that someone files to ensure a debt gets paid.) They review all contracts before you sign them. They also review your offer or agreement to purchase to make sure you don’t get stuck with anything you didn’t agree to. Super important to have a Lawyer on your side!

You’ll have to have home insurance in place as a condition of getting a mortgage. Home insurance can help protect your home and its contents. It typically covers the inside and outside of your home in case of theft, loss or damage, simply put. This is a crucial step, and one that can be a frustrating. But not with us! Let’s Connect and get you coverage within minutes.

Before the sale closes, you’re required to pay to register your property’s title under your name. This may be called a land transfer tax, a deed registration fee, a tariff, or a property transfer tax. The cost is a percentage of the home’s purchase price. For example, if your land transfer tax is 1.5% and your home cost $300,000, you pay $4,500.

Generally, if you buy a new build home, you pay GST or HST. Some builders include the HST in their sale price while others don’t. Make sure to check. Otherwise, you have to pay this cost upfront on closing day!

Other things to consider

Mortgage lenders may ask you to have an appraisal done as part of the mortgage approval process. An appraiser provides a professional opinion about the market value of the home you want to buy. An appraisal fee is generally between $350 and $500. For more information on the appraisal process, read the guide from the Appraisal Institute of Canada.

You’ll have to have home insurance in place as a condition of getting a mortgage. Home insurance can help protect your home and its contents. It typically covers the inside and outside of your home in case of theft, loss or damage, simply put. This is a crucial step, and one that can be a frustrating. But not with us! Let’s Connect and get you coverage within minutes.

Before moving in, you may also have to pay for:

  • moving costs
  • storage costs
  • real estate costs for selling your home (if applicable)
  • redirecting mail
(Find out what to consider when choosing a moving company, and how to plan for moving day costs.)

Your first time home buyer incentive

This incentive offers 5% or 10% of your home’s purchase price to put towards a down payment. 

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