An important step before looking for your dream home is to know in advance what you can afford. Meeting with a mortgage specialist to get a mortgage pre-approval will get you on the right track and determine the amount of financing you are qualified for. Having a pre-approved mortgage amount will make your home search easier because you will have a realistic price range to work with. There is also a mortgage calculators online to assist you in figuring out what you can afford. Ultimately, the best way is to consult a mortgage broker - this way they can answer questions about current rates and get you a pre-approved.
Elephants aren't the only ones with good memories... A credit history can go as far back as the first loan (even those co-signed by a parent) or the first credit card. A bad credit rating can make it hard to lease a car, get a mortgage, or any type of loan. Always pay at least your minimum monthly credit card payment and pay it on time. Of course, the best plan is to never carry a balance. The lure of credit, however, can be too hard for anyone to resist especially for a young adult on a limited budget. If you can establish good habits early, think of how much you will save by avoiding years of paying 18-20% credit card interest. (That's compound interest too, by the way.)
Searching for a new home can be a long and challenging process. I will take the time to listen to what your needs and wants are. This way I won't waste your time showing you a home that won't satisfy your needs. The following are some things to consider:
Type of Home: Are you open to doing any renovations or updates, or do you prefer a move in ready home? Do your have a prefer a bungalow, bi-level or two storey? Would you like to live in a detached home or condo?
Location: Do you want to live in the city, a small town or the country? How far will the commute to work be?
Size: How many square feet would your ideal home be? How many bedrooms and bathrooms do you need? Do you require an office or garage?
Family: Do you have children, or planning on having children in the near future? Would you like to be close to family or friends? Do you need to be close to a certain school?
The following are some additional costs to buying a home. You will need to plan ahead to cover these costs.
This is "good faith money" which proves to the seller that you are serious about making the purchase. This money will go towards the purchase of the home and will be held in the listing brokerages trust account until all conditions are satisfied. (Usually at least $500)
Consult a Lawyer
You will require a lawyer to purchase real estate. Your lawyer will ensure you get exactly what you have agreed to buy at the price you have agreed to pay with the terms listed in the offer to purchase. The law firm will search title, check all documents, transfer title to your name, prepare property taxes and administer the Land Transfer Tax. Before you hire a lawyer, it's a good idea to ask for a detailed estimate of fees for service.
In all transactions, either the buyer or the seller (or their respective mortgage holder, where applicable) pays the annual tax bill to the City or Municipality.
GST is not payable used residential housing, land transfer tax or land titles costs, but is payable on new builds (or extensively renovated homes), legal fees and commission.
For information on new homes or renovations visit the Canadian Home Builders Association website at CHBA
Your mortgage lender will require you to have insurance in place for your new home on possession day. I will provide the with the information they need to have the insurance in place on time. Insurance costs will vary depending on the house.
It's always a good idea to make your Offer to Purchase conditional to a home inspection. This offers peace of mind to you as the buyer. After all some sellers have no idea that there may be issues with their home. A home inspectors job is to crawl around in the attic and other spaces we most likely didn't see when viewing. They check absolutely everything including the electrical, plumbing and other essential aspects of the home. They will provide you with a detailed report on the homes condition. This is a great way to learn everything about the house you want to purchase. These inspections can cost around $400.