Are you ready to buy your first home in Canada? After all there is no better way to feel at home than having a place of your own. This new home may be a stepping stone for a bigger adobe in the future for you or maybe you have found the perfect nest to settle down. Whatever is your plan you want to make the right and informed decisions because trying to buy a house in the most populous metropolitan area in Canada like Greater Toronto Area (GTA) and nearby cities can be challenging for any young family, but is even more so for newcomers to Canada. Remember, making the transition from tenant to homeowner can be scary, but it can also be exciting!
Buying a new home is an important milestone in life and it’s about taking the most suitable and viable decisions that is right for you. The great thing about finding a new home is discovering all the options out there. When you are in the housing market shopping for a new home the prices can be a shock and then the process of qualifying for a Canadian mortgage can be complicated and confusing. However, once qualified, new home buyers are able to borrow at competitive market rates.
At the onset unless you have the ability to pay for your new house without a loan, you’ll require financing in the form of a mortgage. Before you even begin to shop, you should obtain a pre-approval from a Canadian lender. Whether it be through one of the major banks or an alternate lender, you’ll want to find out exactly how much money you’ll have to shop with. Having an established credit worthiness is important but contrary to what many believe, an established credit history in Canada is not necessary to obtain a mortgage, however, it will certainly help and possibly give you access to a better interest rate. You’ll also have to provide a minimum down payment in order to obtain your financing. Typically, this will range from 5%, if you already have a Canadian employment and credit history to 35%, if you have no history whatsoever.
Other costs to consider are Mortgage Loan Insurance which will roughly add an additional 1-3% to your mortgaged amount if your down payment is less that 20% of the home’s purchase price. You should also be aware of some hidden costs such as legal fees and land transfer taxes. While your legal fees will often cost less, you should budget approximately $2,000. Land transfer taxes, however, will cost you more. It’s important to note that you’ll be responsible for paying a Provincial Land Transfer Tax and an additional Municipal Land Transfer Tax if you are buying a home in Toronto.
As you can see the process and complexities for a first time home buyer, it becomes important to choose a real estate agent. There’s no shortage of real estate agents in GTA to choose from. In fact, there are many thousands, but you’ll want to make sure the agent you choose is a good fit for you.
How do you choose a good agent? For starters, your agent should be able to demonstrate a working knowledge of the cities and neighbourhood’s you are considering. This knowledge is extremely important, especially if you’re new to the area. Your agent should have knowledge of the pros and cons of different neighbourhood’s, knowledge about the schools, the amenities, transportation and the demographics. They should also be knowledgeable about the various laws, regulations, construction styles and techniques found in your preferred location. It’s also very important to feel like your agent understands your needs and is quick to respond to you when you have questions, because you’ll likely have plenty of them along the way.