Canada is inviting many immigrants every year from India, Pakistan, Bangladesh, China, Philippines and from all over the world. If you are new to Canada and are looking to purchase your own home, it can be challenging. You would have to do your research well and find the experts , like myself who have served 100s of clients in my career. My objective is to help you find your dream home with affordable options. However, there are several things to consider before making a choice to purchase a property in Canada.
- Find a Real Estate Agent to Help Check Your Affordability
Find the Right Real Estate Agent is important. They'll help you assess your affordability and apply the basic rule to every kind of shopping. When making a move to purchase a house, you must first evaluate your financial standing and how much you can afford. You will have to consider renovation costs, on top of the purchase price and the costs for making minor amendments to the house facilities. You should contact a mortgage broker to understand how it works and what your current affordability is. After considerations and consultations with the experts, set your ceiling purchase price, accordingly.
- Decide what you are looking for in a house:
First, you should decide the size of your home; the number of bed and baths, kitchen, dining and living space etc. Consider your special needs as well such as hobby and storage spaces, workspace, swimming pools and others. Decide if you would like to move into a city or a suburb, how far you are willing to commute for work, schools you would like your children to be registered with and if you would want to move close to specific cultural community centers. You may also want to seek the help of a real estate agent to help you make better choices in terms of suitability of location, house size requirements and price negotiation. MLS.ca (Multiple Listing Service) is a nifty site to check out to see the current housing market situation.
- Decide the type of home:
You can opt for a condominium, townhouse, semi-detached, single/detached or a duplex/triplex house. A condominium (condo) is a less expensive option and very attractive to first time buyers. A point worth noting is that there are monthly condo fees due to condo corporations, which is utilized for the maintenance of the building as and when required. Townhouses are a series of homes, whereas semi-detached houses have a separate land. Both have separate entrances, but are attached wall-to-wall with other houses. Single detached homes can be expensive because they stands separate and free, so you own the house and the land. You are also responsible solely for all costs involved. A duplex/triplex is a single home with multiple units. You own the property and can also rent out the additional units.
- Make a Purchase offer
Once you have found the house according to your budget and your lifestyle, it is time to put your Offer to Purchase. This can be done with the help of a real estate agent, or you may also do so with the help of a lawyer or a notary. The document generally includes the purchase price offered, amount of the deposit, chattels (that includes refrigerator, stove, washer and dryer that you are additionally purchasing from the seller) and the closing date for possession of the house, (which is usually 30 to 60 days from the day the purchase offer is made), request for survey of the land and property, the date when the offer becomes null and void, mortgage financing and home inspection conditions that go with the offer.
- Financing the home:
You typically seek the help of a financial institution such as banks and credit unions to help you pay the purchase price via a loan. The loan termed as a mortgage can be repaid by you through regular payments over a period of time, typically around 25 to 30 years, termed as amortization period. Your regular payments will be topped up with additional interest rates that you need to pay on top of the principal amount. However, to avail the loan, you need to have good credit history. Therefore, finding the right mortgage broker is crucial for you to be able to get pre-approved. A pre-approval does not bind you. It still leaves you open to pursue other arrangements.
- Find a mortgage broker:
They secure you the best mortgage terms and conditions. The amount of your mortgage is calculated based on the price of the home subtracting the initial down payment. If the down payment is less than 20% of the value of your new home, your lender (i.e. the bank) will require Mortgage Loan Insurance. For availing the mortgage, you must have credit and stable (valid) source of income. You must open a bank account and use it regularly. Pay your bills on time, including insurance payments. Apply for small loans to prove you pay on time and apply for a credit card as well. If you stay with the same employer for an extended time period, it is also a very good history that will add up to availing mortgage easily. Also, remember that the minimum down payment for purchase of a property in Canada is 5% of the actual home price for purchases up to 500,000.00 CAD. In case of less than 20% down payment, your bank requires you to purchase mortgage default insurance through either CMHC, SAGEN, or Canada Guaranty (CG).
For more information call Ricky Bola, who have been offering expert solutions for years now and have been Rated the Top 15 Individual Real Estate Agents with Re/Max West Realty - 2023.