First-Time Homebuyer Guide

Determine If You’re Ready to Buy

Before purchasing a home, ensure you are financially and personally ready for homeownership:
• Assess Your Finances: Review your income, savings, and credit score.
• Understand the Responsibilities: Homeownership comes with long-term commitments, including maintenance and financial planning.
• Check Your First-Time Buyer Status: You’re a first-time homebuyer if you’ve never owned a home anywhere in the world, either individually or with a spouse or common-law partner.

Understand the Costs of Homeownership

Homeownership involves upfront and ongoing expenses:
Upfront Costs—Down Payment:
• 5% for the first $500,000 of the home’s price.
• 10% for any amount above $500,000 and up to $1,499,999.99.
• 20% for properties priced at $1.5 million or more (mortgage insurance is not available).

If your down payment is under 20% on a home below $1.5 million, mortgage default insurance is required. The premium is typically added to your mortgage loan, but the provincial sales tax on the premium must be paid at closing.

Closing Costs: (typically 1% to 4% of the purchase price)
• Legal fees
• Land transfer tax
• Title insurance
• Adjustments (e.g., prepaid property taxes or condo fees)
• Mortgage default insurance sales tax (if applicable)

Ongoing Costs:
• Mortgage payments
• Property taxes
• Home insurance
• Utilities (electricity, water, gas, internet, etc.)
• Maintenance and repairs

Tip: Create a budget to understand how homeownership will impact your finances.

Get Pre-Approved for a Mortgage

A mortgage pre-approval confirms how much you can afford and strengthens your buying power. It’s best to get pre-approved when you’re ready to begin actively searching for a home, so you can take full advantage of the rate hold period—typically up to 120 days—and confidently explore properties within your budget.

Benefits include:
• Knowing Your Budget: Helps you and your real estate agent focus on homes within your price range.
• Locking in an Interest Rate: Protects you from potential rate increases during the rate hold period. Note: Subject to lender approval and meeting qualification criteria.
• Strengthening Your Offer: Demonstrates to sellers that you’re a serious and qualified buyer.
• Smoother Mortgage Process: Once your offer is accepted, much of the preliminary work is already done—helping to streamline the final approval process and reduce stress during a busy time.

Maintain Your Credit During the Process
• Pay bills on time.
• Avoid new credit applications and large purchases.
• Keep credit card balances below 70% of your limit.

Work with a Real Estate Agent & Find Your Home

A professional real estate agent helps you:
• Find properties that match your needs and budget.
• Negotiate a fair purchase price.
• Navigate paperwork and contracts.

When searching for a home, consider:
• Location, commute times, and neighbourhood amenities.
• Home size, layout, and long-term suitability.
• Home inspection results to identify potential issues.

Make an Offer & Secure Financing

Once you find the right home, your real estate agent will help you submit an offer. Most offers include a deposit, typically 5% to 10% of the purchase price, due within 24 hours of acceptance. This deposit shows good faith and forms part of your total down payment—it’s not an additional cost, but the funds must be readily available in your bank account.

Your offer may include important conditions such as:
• Financing Condition or COF (conditional on financing) – Confirmation that your lender approves the mortgage terms for the property.
• Home Inspection – An assessment to identify any major repairs or structural concerns.

Note: Once conditions are satisfied and waived, the offer becomes firm.

Finalizing Your Mortgage
After your offer is accepted (with your signed Agreement of Purchase and Sale):
• I will submit your full mortgage file to the lender for review, aiming to secure a conditional approval before the financing condition expiry date, if one was included; however, a lender cannot guarantee issuing this approval within the allotted time, and an extension may be necessary.
• The lender will issue a conditional approval, subject to the property appraisal and any remaining requirements.
• I’ll work with you to satisfy all outstanding conditions, secure final approval, and finalize your financing.

Take Advantage of Government Programs
As a first-time homebuyer, you may qualify for:
• First-Time Home Buyer (FTHB) Tax Credit: A $1,500 tax credit to help with closing costs. Learn more.
• GST/HST New Housing Rebate: A rebate on part of the sales tax for new or substantially renovated homes. Learn more.
• Land Transfer Tax Rebates: Available in some provinces to reduce upfront costs. Learn more.

Closing & Moving In

Your real estate lawyer will guide you through the final steps, including:
• Reviewing and signing closing documents.
• Transferring funds to the seller.
• Registering the home in your name.

Once complete, you’ll receive your keys and officially become a homeowner!

Post-Purchase Essentials
• Change the locks for security.
• Set up utilities (electricity, water, internet, etc.).
• Update your address with your bank, employer, and government agencies.
• Review your home insurance to ensure adequate coverage.

Ready to Start Your Home Buying Journey? If you’re ready to take the next step, contact me today to get pre-approved and begin your search. Let’s make your dream of homeownership a reality!