November 21, 2019

Home Ownership

So, you’re about to get your dream home. I know that feeling. You’ve waited for this moment all your life. If you are feeling a bit nervous, that is fine. Homeownership goes beyond an overnight decision. It is more of a process. There are important things to keep in mind before making your dream a reality.

Homeownership can be very exciting and very stressful at the same time. In this article, I will be sharing with you what you need to consider, so that the process is less stressful and more exciting.

1. Get Pre-Approved

This is the first thing that you need to consider before you start looking for a property. It is mandatory that this particular process is flushed out entirely before investing a lot of energy into the process.

In order to qualify for the purchase of a home or a property, you need to have a mortgage agent or a mortgage broker assess your ability to purchase a property from a mortgage standpoint. There are two things they look at when conducting this assessment.

Income Level

The first thing they look at is your income. This would be your ability to pay for the debt that you’re undertaking.

Credit Report

After your income has been ascertained to be able to handle the debt, the second stop is your credit report. Your credit score is very important because that’s an indication of your history, in terms of your habits in paying back a debt.

Down Payment

The next thing they’re going to ask is if you have proof of your down payment. As a first time buyer, you can put down as little as 5%. If you’re an investor purchasing your second or third or fourth property, you need 20% down payment.

Overall Debt

Finally, they look at your overall debt. If you have a lot of debt, that is going to diminish your purchasing power. If you have no debt, then that’s great. You’re ready to get started.


2. Consider Closing Costs

If you scale the pre-approval hurdle, congratulations. However, that is just one step. Before you sign on that dotted line and say, “Okay, I’m buying this house,” you need to consider a few things. One of these would be the closing costs.

Sometimes, because of the excitement of the purchase, we forget about the closing costs. Especially if it’s our first time buying, the closing costs would consist of:

Land Transfer Taxes

Find out if there are taxes to be paid before buying the home. In places like Ontario, you have to pay land transfer taxes when you buy your new home.

Lawyer’s Fees

Besides taxes, there’s also the lawyer’s fees that you have to take into consideration. This fee is not a fixed price. It varies from lawyer to lawyer.

Moving Expenses

Another important cost to look at are the moving expenses. If you’re moving from one city to the next or even one home to another in the same neighbourhood, you have to factor in the cost of moving yourself.

Harmonized Sales Tax (HST)

If you’re buying a brand new property that’s never been lived in before, then you may be on the hook for the HST. If you’re going to rent that property out, make sure you keep that in mind.


3. Get A Realtor

Lastly, before you start house shopping, you need to get yourself a realtor. Get yourself someone who is professional and will not cut corners. Also, ensure that you’re compatible with them.

Remember I mentioned at the outset, home buying is a process, not an overnight decision. So, if you’re going to spend two months or even sometimes a year looking for that right property, you need to ensure that the realtor that you’re dealing with is someone that you’re comfortable with.

That’s it! If you follow these three tips, they will save you a lot of stress down the line. Of course, there is more to buying a home than these. So, if you have a question or comment, don’t hesitate to drop a comment below. I am eager to be of help.

Take care!