Are you a first-time home buyer?

Here are some things you need to know!

Before you start looking for homes, make sure to create a budget, stick to it and save up for your down payment. To figure out what a good number will be, we need to remember that your down payment is determined by your home’s purchase price and the absolute minimum that you are allowed to put down is 5% for homes under $500,000. If you want to save for a home over $500,000, then you will need to save a larger down payment. Saving up the most you can will be beneficial as the larger the down payment, the less amount you need to borrow but it also helps to have some extra funds to cover any extra unforeseen costs. 

Before you start looking online at homes, it’s a good idea to sit down with a mortgage professional and discuss getting pre-approved for a mortgage. This will help you determine what you can afford and what price range you can look at. This will help make sure that you don’t get too attached to homes outside of your budget. 

Be realistic about the kind of home you can afford. Once you have a good idea of the numbers for a downpayment and a house, then you need to look at your personal monthly expenses, home costs like property taxes, any strata fees, and utilities that you will be paying. These additional costs will affect your monthly budget and may affect your overall home budget. 

As a first-time home buyer, you are eligible for various programs that may help depending on your situation. This includes the land transfer tax rebate, as well as the Canadian Home Buyers’ Plan that allows you to borrow from your RRSP for a down payment tax-free. 

Be aware of additional costs with buying a home such as closing costs, and CMHC insurance. Even if you have enough saved for a down payment, it’s advised to keep saving up some more. A good rule of thumb is to reserve 3-5% of your home’s purchase price to cover closing costs. And don’t forget about moving costs and any immediate repairs that may need to be done on your new home! 

Find the process overwhelming or need some guidance or help? Connect with me and I am happy to answer your questions! My years of experience has shown me every kind of situation and I can help you navigate this exciting new transition!