Home
Buying Guide: Getting
Started
Make
a Wish List
Before you
begin shopping for a home, make a detailed "wish list" of what you
need and want in a home. Your Realtor will help you prioritize this
list and suggest features that you may have overlooked. First, you
need to decide upon a location. Think about factors such as school
quality, crime rate and proximity to public transportation, shopping
areas, work, parks, etc.
Second, you
need to choose the type of housing you want (i.e., condominium or
house; new or resale) and the amount of space you need. Determine what you can afford
Before you
start looking for a home, you and your Realtor need to determine
how much you can afford. The main home buying expenses are the down
payment, the mortgage and the completion costs. Current interest
rates will effect the amount you can afford. Talk to your Realtor
about various homebuyer incentive programs that can assist you with
your purchase.
Down Payment
For a conventional mortgage, you will need to pay at least 25% of
the purchase price as a down payment. However, if you qualify for
the Canada Mortgage and Housing Corporation (CMHC) 5% down payment
program you can get a high-ratio mortgage where you receive up to
95% financing.
Although your
down payment can't be borrowed, gifts from friends or relatives
are fine. You can borrow up to $20,000 from your RRSP if you are
eligible.
Mortgage
Most people buying a home need to borrow a portion of the money
from a bank or other lending institution. Ask your Realtor to calculate
how much you are eligible to borrow based on your income and level
of debt.
Completion
and Other Costs
There are additional costs involved in buying a home. These
include mortgage insurance, taxes, legal fees, house insurance,
inspection reports, appraisal and survey fees. If you are a first
time homebuyer, you may be exempt from the Property Transfer Tax.
For more information
on borrowing your down payment from your RRSP, link to the following
site:
Source: www.realtylink.org
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