Buying a home is a momentous occasion in anyone’s life. Thankfully, Canada Mortgage and Housing Corp. has some suggestions that can help you navigate the ins and outs of the home-buying process. Contact me today and I will send you a copy of their very useful information.

 1. Determining if home ownership is right for you

Recognize the real costs of homeownership

Upfront costs (e.g., down payment, closing costs, taxes)
Ongoing costs (e.g., mortgage payments, property taxes, insurance, utilities, condo fees, routine maintenance)
Major repairs (e.g., roof replacement, foundation repair)

Renting vs. buying

There are benefits and drawbacks to both renting and owning a home – make sure you understand them before you decide which option is right for you

2. Determining if you are financially ready to own a home

Calculate how much you are spending on a monthly basis

Calculate how much you can afford to spend on housing each month without putting your financial health at risk
Your monthly housing costs should be no more than 32 per cent of your average gross monthly income
Your monthly debt load should be no more than 40 per cent of your average gross monthly income

Determine the upfront costs

Have you saved enough money to cover a down payment, home inspection and appraisal, insurance costs, land registration fees, prepaid property taxes or utility bills, legal or notary fees, potential repairs and renovations, moving costs, and GST?

3. Financing your home

Get pre-approved for a mortgage

This lets you know how much you can afford, your interest rate and what your monthly mortgage payments will be

You will need the following to qualify for a mortgage

Contact information for your employer
Proof of address
Government-issued photo ID
Proof of income
Proof of down payment (amount and source)
Proof of savings and investments
Details of current debts

Know your credit score

Lenders and brokers will look at your credit history before deciding whether to approve you

Mortgage loan insurance

Required if your down payment is less than 20 per cent of a home’s purchase price

4. Finding the right home

What do you want or need in a home?

Location
Size
Special features
Lifestyle

Forms of homeownership

Freehold
Condominium (strata)
Leasehold
Co-operatives

Start your search

Via word of mouth, social media, newspaper and real estate magazines, visits to new housing developments, real estate websites, “for sale” signs, and/or a REALTOR®

Homebuying professionals that can help

Real estate agents
Insurance brokers
Home inspectors
Appraisers
Land surveyors
Builders or contractors
Lenders or mortgage brokers
Lawyers or notaries

5. Making an offer and closing the deal

Your offer should include

Your legal name, the seller’s name and the address of the property
Purchase price
Amount of your deposit
Any items you want included in the purchase
Closing date
Request for a current land survey
Date the offer expires
Any other conditions

You will need the following information to finalize the details of your mortgage

Legal description of the property
Building specifications
REALTOR.ca listing
Property tax assessment
Appraisal
Home inspection report
Land survey
Heating and utility costs
Condo fees
Signed offer to purchase

Closing day

Take legal possession of your new home

6. Maintaining your home and protecting your investment

Make your mortgage payments on time

You can make your payments weekly, bi-weekly or monthly
Late or missed payments can lead to penalties, and negatively impact your credit rating

Plan for the costs of operating a home

Maintenance and repair costs, security monitoring, snow removal,
gardening, etc.

Live within your budget

If you regularly spend more than you earn, find ways to cut your spending or increase your earnings

Save for emergencies

Set aside an emergency fund of roughly five per cent of your income every year to deal with unexpected expenses

SOURCE: Canada Mortgage and Housing Corp., “Homebuying Step by Step: Your Guide to Buying a Home in Canada.”