We can help you pave the way to finding your dream home
Consider life insurance and critical illness insurance before buying your home to guarantee your future insurability and protect your family’s financial security.
Before taking steps to buy a property, ask yourself if it’s something you really want or if it’s just something you feel you have to do.
Here are some examples of pros and cons to consider:
| Advantage | Inconvenience |
|---|---|
|
Owning your home is usually a sign of stability, since a landlord can end your lease. |
You will lose the flexibility that a tenant has, who can give short notice to move out. |
|
Your home will accumulate equity every month, rather than paying your landlord. |
If repairs are necessary, you will have to pay the related costs, rather than your landlord taking charge of these expenses. |
Before embarking on the great adventure of buying a home, it is important to take certain elements into consideration, such as the person with whom you are buying it, your financial situation and your other bills to pay.
Here are a few things to think about:
Is my job stable?
If you have a job where income fluctuates or you are unsure about having a medium-term job, now may not be a good time to take out a mortgage.
Will I have to use all my savings?
If possible, always try to have a separate emergency fund representing 3-6 months of living expenses. If you are unable to do so, it is recommended to save a little more.
Will other changes occur in the short term?
Ask yourself if you will have to move again in the short term. If this is a possibility, buying property now is not recommended. Also think about changes in your life that could affect your finances and property needs, such as having children.
Will this move entail other expenses?
Establish a monthly budget to finance this new stage of your life. Start with your mortgage payment, not to mention property taxes, condominium fees, maintenance and hidden costs, such as the cost of a longer drive, or the purchase of a new car that you may need.
What is a down payment?
This is the initial payment you make. This will be paid to your real estate lawyer and will be deducted from your total mortgage covering the rest of the cost of the house (capital).
What is the down payment required?
In order to avoid getting mortgage loan insurance, you will need at least 20% of the purchase price as a down payment. For example, if you buy a house for $500,000, you should have saved at least $100,000. It’s important to remember that the bigger your down payment, the lower the mortgage will be and the less interest you’ll pay in the long run.
However, it is possible to make a lower down payment, depending on the purchase price. If the cost of the house is less than $500,000, the minimum down payment required is 5%. Between $500,000 and $999,999, it will be 5% of the first $500,000, plus 10% of the second $500,000. If the amount is greater than $1,000,000, it will be 20%.
Before you go looking for a real estate broker, ask a mortgage specialist to determine the amount you qualify for. A pre -approval will allow you to obtain an overall picture of the amount for which you may be eligible and the amount of your mortgage payments. Once pre- approved , some lenders offer the ability to lock in an interest rate on the spot, valid for 60 to 130 days.
The pre- approved amount takes into account certain elements:
Now is the time to choose your home according to your personal taste. To help you, here is a quick checklist.
Can you really afford it?
Although you have been approved for a mortgage, make sure this amount does not take up too much of your income. Having leeway will allow you to overcome more difficult times.
Does the house suit your lifestyle?
Most of the time, buying a home means you may have to make some compromises. Think about the distance between your work and your home, your growing lifestyle or the need for renovations.
Is it a good investment?
Your home will be one of your biggest assets. However, it is important to be on the lookout for market fluctuations, real estate bubbles and overpriced homes compared to similar homes in the same area.
Special incentives for the purchase of a first property
In order to be considered a first-time home buyer, you must not have purchased or owned a property within the last five years. If you are a couple, one of the two people may have bought or owned a property during this period. If this is your case, some unique incentives and rebates may be available to you, such as the First-time Home Buyer Incentive, Home Buyer’s Amount , or the Home Buyers’ Plan (RAP).
If the market you are in is hot, you may need to bid repeatedly. Conversely, if the market is not boiling, you might trade the asking price lower.
Before making an offer, however, it is advisable to send the advertisement for the house to your mortgage specialist. Factors such as property taxes and condominium fees could affect the amount offered by a lender.
Duration
Depending on a particular type of mortgage loan, you can determine the length of your commitment. This period can range from six months to ten years and affects how long your interest rate is locked in, determining the stability of your payments each month.
Interest rate
The interest rate represents a percentage of the amount borrowed, repaid monthly in addition to paying the balance of your mortgage loan. The lower the interest rate, the less you will pay for your home. It is important to consider that interest rates fluctuate. Keeping this in mind will help ensure that you cover your payments if your interest rate increases.
Before you officially own, you’ll need a lawyer to deal with the legalities of closing the deal. This service includes total closing costs, including fees such as HST or other taxes, disbursements and attorney’s fees.
Also, other sums such as property appraisal and inspection fees, land transfer taxes, property insurance and professional movers must be taken into consideration.
The information on this page is for informational purposes only. If your situation is unique, you should consult an appropriate legal, accounting or tax advisor.
An advisor can help you with everything you need to know about planning for homeownership so that all that’s left for you to do is find your dream home.
