FIRST TIME HOME BUYERS
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!
Are you financially ready to own a home? Look into these top 4 calculations and questions before you meet with your broker or lender.
1. 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.)
2. Saving for your home
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)
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
3. 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.
4. Finally, a big kicker! What is your credit score? 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.
Other things to Consider.
Separate costs you may need to budget for include:
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.
An inspector provides a comprehensive visual inspection of a home’s overall structure, major systems and components such as:
electrical and plumbing systems
CMHC recommends that you include a home inspection as a condition when you make an offer.
Before moving in, you may also have to pay for:
real estate costs for selling your home (if applicable)