Buying your first home is a huge milestone in life, so it’s only right that you get the most out of it. There are many benefits and incentives that come with that first purchase, and my tips for first time home buyers in Ontario will cover everything that you need to know to have a successful first experience in the real estate game.
Don’t Rush Into It
The excitement of buying a home can get the best of a person, but the key to getting the best deal on a property that you love is to be patient. You’ve probably heard the saying ‘good things come to those who wait’, and this applies perfectly to buying a home. You may see some properties for sale right now that you don’t mind, but if you wait for something better to come on the market you will probably find the one that checks off all of the boxes. You don’t want to make the biggest purchase of your life thus far and regret it, so be patient.
Think About The Future
Make sure that the investment you make is going to make sense in 10 years. Are you expecting to grow your family and have kids in the next few years? If so, you might not want to buy a 1 bedroom home on a busy major road.
You also need to think into the future financially. Is the house in a condition that’s going to hold up for many years so you can sell it easily if you decide to? Is it in an area that is being developed and will likely be worth more money down the road? These are all things that should be considered to make sure you’re making a good investment.
Do Your Research
Even though you will be working with a realtor and other professionals throughout the process, it doesn’t hurt to know what goes into buying a home. People make mistakes, and having an understanding of how things are supposed to go will allow you to catch mistakes and make sure everything is going the way that it’s supposed to.
Knowing your stuff also helps to reduce the stress and uncertainty that buyers experience from the complicated buying process and the large amount of money that is at stake.
Get Pre-Approved & Budget Properly
The first step in buying a home is figuring out if you qualify for a loan and for how much. For more information on mortage pre-approvals check out my article here. A pre-approval is a necessary starting point to figure out what you can afford, but it shouldn’t stop there. There are many other costs associated with buying a home (land transfer tax, adjustments on closing, lawyer fees, inspection, etc.), and these should all be carefully considered to ensure that you can afford everything on top of the down payment and not be left with an empty bank account afterwards.
It is also very important to make sure that you will be able to cover the monthly costs associated with owning the home so that you avoid any unpleasant suprises and don’t run the risk of being unable to pay your bills. You should calculate your net monthly income (meaning after tax) so you know how much money you actually have to spend and save. This amount would be the absolute most that you could afford to spend every month if you didn’t save any of it.
You then need to add up all of the monthly costs associated with owning a home (mortgage, insurance, property tax, utilities, maintenance, etc.) and combine that number with the rest of your expenses to figure out your total potential expenditure every month. Ideally you would want your net income to cover this and then have some left over to set aside for savings. You can find more information on the costs associated with home ownership in my Buyer’s Guide.
Pick The Right Realtor
Working with a realtor who will guide you through the entire purchase process and make sure that all of your questions are answered will help you get the best result and ensure that you have no regrets in the future. You can look at the websites and social media profiles of different realtors to see which ones provide valuable information and look like they know their stuff, and then pick a few to interview and decide between. Make sure you pick someone who specializes in your area of interest.
Take Advantage Of First Time Home Buyers Incentives & Rebates
There are many incentives offered to first time buyers to encourage people to invest in real estate and help them afford to do so.
- The RRSP Home Buyer’s Plan: This allows you to withdraw up to $35,000 tax free from your RRSP to fund the purchase of a home. You do have to gradually repay this back into your RRSP after 2 years, but it saves you from being taxed on the money when you take it out.
- Land Transfer Tax Rebate: Land transfer tax is usually the biggest closing cost for a buyer, but this rebate relieves you from a portion (or all) of the tax.
- GST/HST New Housing Rebate: If a first time home buyer makes a purchase that is subject to GST or HST, a portion of this can be refunded. Purchases that would qualify for this are new build homes or major renovations on existing homes.
- First Time Buyer’s Tax Credit: This is a $750 credit that is given to first time home buyers in Canada. It is used to help with closing costs or miscellaneous fees associated with purchasing a home.
More Tips For First Time Home Buyers in Ontario
Now that you know the most important things for first time home buyers to consider, you can start your buying journey with confidence. Try a mortgage calculator to get an idea of how much you can expect to pay each month and what the potential interest rate would be. Check out my Buyer’s Guide for more tips and information on the home buying process.
If you have any questions or are interested in buying or selling, please do not hesitate to contact me at any time.
My personal cell: 289-675-4882
Email: brad@braddornellas.com