A quick guide to buying your first home in Canada
Deciding to purchase your first home may seem like a daunting task, but it doesn't have to be. Knowing what resources to gather before starting your search is key. So before you buy, make sure you know the basics.
The right home for you
Deciding on what type of property is right for you is the first of many steps. You'll also need to answer the following questions before any decisions are made: how many people will reside there? Do you want to live in a city centre or in the suburbs? Are transportation, local amenities and nearby entertainment priorities? And finally, are you buying for the long or short term? A condo may suit your needs now, but will it in 10 years? How about a house? If your children are already in their late teens, consider all the extra space you'll have in a few short years.
What is a good buy?
This is certainly a question you need to ask yourself before purchasing a home. Decide on the main features you absolutely must have - not what your dream home would have. For example, do you need a backyard for pets or children, or do you want it for the occasional al fresco dinner party? How about parking? If you don't drive, then why pay more for a condo with a parking space? Assess what your key requirements are, then list them in order of priority. But be prepared to compromise on the frills such as that luxury jacuzzi bathtub or walk-in closet you so desire.
What can you afford?
This is probably the most crucial question - and you must be honest about it. How much can you honestly afford now? Sure, your income may may increase in a few years, but do you really want to be house-poor? Ask yourself how much you are capable of paying for a mortgage (the standard is about 30 to 40 per cent of your pre-tax monthly income), not to mention other potential financial obligations like children entering university, travel, health concerns, etc. Always begin with speaking to a mortgage professional before getting started. They will help you with a financial assessment to determine affordability.
Working within your budget
So you've determined how much you can afford. Now you need to think about a budget. When buying your first home, a budget will help you prepare for your down payment, any unforeseen costs and boost your chances for the best mortgage rates possible. Lenders want to see prospective home owners who are money-savvy and savings-smart.
Assessing the housing market
How do you know when is a good time to get into the market? There's no simple answer to this question, but you will most certainly want to check out the market in your desired area. Doing some initial research such as contacting a real estate company, your bank, reading the newspaper and asking other homebuyers will all help you decide if now's the time to take the plunge.
Who will be involved?
This question is often a shocker to most first-time homebuyers. You start off thinking it's only you, but then you realize there's a whole team involved in successfully purchasing a home. The main players will be a real estate agent, mortgage broker, lender, mortgage insurer, property/mechanical inspector, appraiser and lawyer. And that's if you're not planning on dealing with any potential building/renovating issues
You can also go online and visit the Condos By The Lake website which provides myriad tools and resources to get you started on your search for the perfect home for you and your family.
The Ontario Government has a Settlement assistance program available online here.
Guidance and Programs are also available on line for your job search and education requirements thru Newcomer Magazine