After years of struggling, living in dingy apartments, saving most of your paycheck, you are finally ready to settle in. The first thing that you want to check off your wishlist is getting a dream house. House hunting can be a bit of a task. There are a lot of things that you need to figure out before you plan to buy a house. It is a long-term investment, hence, you need to get a real estate agent that you can put your faith in. It’s not every day you go around buying a house, right?
If you plan on buying a house in Canada any time in the future, continue reading. We have almost everything figured out for you which will surely make the process a lot easier.
1- Down Payment
Saving for a down payment should be your main concern. Houses priced between $500,000 to $1 million, the down payment requirement is 5% for the first $500,000 and 10% for the remaining amount. As for the houses above $1 million, the minimum down payment is 20%.
The saving process might take a lot of time so you need to be very patient.
2- Prepare Your Documents
When you move on to applying for a mortgage, you will realize it requires a lot of paperwork. Having your documents in advance can be useful if you want your mortgage approval process to be quick and steady. Here is a list of documents that you would require:
- Current employment details
- All sources of income
- Savings and investments of past three months
- Proof of withdrawal from RRSP (applicable if you use Home Buyers Plan)
- In case you get the money as a gift, you need a letter stating that it is not a loan
- Details of all debts and assets
- A void cheque
- If you are using a financial gift from a family member, you’ll need a letter stating the gift is not a loan
3- Mortgage Pre-Approval
If you have arranged for all the required documents, now is your time to get a mortgage pre-approval. It is free of cost and can prove to be extremely beneficial for you. If you approve of the rate and lender, you can lock the rate for around five months. In case the rate goes up, you would be able to access the lower rate. If the rate drops, you have to pay the lower rates. Either way, it’s a win-win!
4- Look For A House
Looking for houses is the best part of the whole process. You will see a lot of houses and you need to keep your priorities in check before making a decision. It’s better to find a real estate agent to cater to your needs. RE/MAX Centre City can provide you assistance in this regard. Don’t consider representing yourself especially if this is your first experience buying a house. Make a list of all the things you must have in your house and everything you would rather not have. This will give your agent a clear idea about your needs
5- Finalize The Offer
Once your house hunt is finished, everything will be fast-paced. First of all, you will have to submit an offer. If the house is popular, it might have a lot of potential buyers which may not work to your advantage. So make your best offer and once it is accepted, pay the deposit. Finalize your mortgage and arrange a home inspection. Then, with the help of a real estate lawyer, pay your down payment and have the title transferred to your name. Once everything is in order, you will receive the keys from your agent, and congratulations! You are now the owner of your new home.
If you are interested in buying a home in Ontario, or basically anywhere in Canada, RE/MAX Centre City is here at your service.