WELCOME TO HOME OWNERSHIP
Buying a home for the first time is exciting, scary, and a great accomplishment! It is also one of the biggest financial decisions that you will ever make, and is a process shrouded in mystery and unknowns, but it doesn’t have to be! In order to help, the Peggy Hill Team have compiled a list of suggestions for first time home buyers to take a little bit of the confusion and mystery out of the home buying process.
At the Peggy Hill Team our mission is to go above and beyond to deliver you the highest level of customer service and a stress-free first-time home buying experience. We believe that your first time buying a home should be exciting, comfortable, informative and stress-free.
To help alleviate some of the stress and answer your many questions about getting into the housing market we’ve put together a summary of some of the most important things you need to know when buying your first home:
WHAT YOU NEED TO KNOW ABOUT BUYING YOUR FIRST HOME
1.) DETERMINE WHAT YOU CAN AFFORD
The first step in home ownership is twofold. You need to prepare yourself for the reality and financial responsibility that comes with home ownership and you need to make sure that you are in a position to handle those responsibilities and to get pre-approved for a mortgage.
Purchasing a home involves one-time costs and monthly expenses, so you’ll need to determine just how much home you can afford and if you’re financially ready for home ownership. You’ll want to determine:
- Your monthly income
- Your monthly debts and expenses
- How much you have set aside for your down payment
Have questions about what you can afford?
2.) KNOW YOUR EXPENSES
The purchase price of your new home is just one of the costs associated with home ownership. Experts recommend that you budget 1.5% of the purchase price of your home to cover these costs.
PRE-CLOSING COSTS:
Home Inspection – A home inspector’s job is to examine a home’s condition. Typical issues involve normal wear and tear, but can sometimes include serious material defects. Getting a home inspection before purchasing a property is one of the best decisions you can make.
Appraisal and/or Survey – In order to provide financing your lender will sometimes require an appraisal or survey of the property, to make sure that the value of the home matches its purchase price.
CLOSING COSTS:
Land Transfer Tax – A provincial tax based on the purchase price of your new home.
Mortgage Insurance – If your down payment is less than 20% of your purchase price, you’ll have to pay mortgage default insurance. The cost of this insurance varies depending on the amount of your down payment and will be rolled into the cost of your monthly mortgage payment.
Legal Fees – There are a number of legal fees involved in the purchase of a home, such as paying your attorney for the title search, deed preparation and registration.
Title Insurance – Protects you from situations such as title fraud or flawed surveys.
Home Insurance – Making sure that your home is insured is a condition of your mortgage. Your lender will require you to have home insurance before they release your mortgage to you.
Adjustments – Adjustments are made for things that the seller has paid for, but which you now owe part of because the home is now yours. This could include things like property taxes or rental fees for hot water heaters.
Utility Hookups and Moving – You will be responsible for any utility transfers and costs associated with moving into your new home, such as hiring a moving company.
3.) GET PRE-APPROVED
After you’ve figured out what you can afford, it’s a great idea to sit down with a mortgage agent or broker and get pre-approved for a mortgage. This will make your home search easier by narrowing your focus and will prevent you from falling in love with a home that is outside of your price range. Click here for more details on how to get pre-approved.
If you’re not sure where to start visit our Business Partners page for a list of mortgage agents and brokers that our clients have enjoyed working with.
4.) FIRST TIME HOME BUYER INCENTIVES
As a first time home buyer you are eligible for refunds, benefits and programs not available to other home buyers. For example both the First Time Home Buyers’ Tax Credit and the Land Transfer Tax Refund for First Time Home Buyers are tax breaks that could end up saving you thousands of dollars!
First Time Home Buyers Tax Credit
Introduced in Canada’s 2009 Economic Action Plan, this tax credit is to help first time home buyers pay for costs such as legal fees, disbursements, and land transfer taxes. It is a non-refundable tax credit based on an amount of $5,000. It is calculated by multiplying the lowest personal income tax rate for the year by $5,000. For an eligible individual, the credit will provide up to $750 in federal tax relief.
For information on the First-Time Home Buyers’ Tax Credit (HBTC), click here.
Land Transfer Tax Refund
When purchasing their first home, buyers are eligible for a tax credit to offset or refund the amount of land transfer tax payable on the purchase of a new or resale home. Claims can be made at the time of registration to offset the cost or within 18 months of the purchase for a refund. Refunds can be any amount up to a maximum of $2,000 depending [as of January 1, 2017 the maximum refund amount will change to $4,000] on the purchase price of the home.
For more information on the Ontario Land Transfer Tax Refund for First Time Home Buyers, click here.
RRSP Home Buyer Plan
This program allows a first time home buyer to withdraw funds from most RRSP’s in order to buy or build a qualifying home. You can withdraw up to $25,000 in a calendar year. You have 15 years to repay the full amount to your RRSP. If you do not repay the amount due for a year, it will be included in your income for that year.
For more information on the RRSP Home Buyers’ Plan (HBP), click here.
5.) KNOW WHAT YOU WANT AND GET ORGANIZED
At this point you’ll want to sit down and figure out exactly what type of home you’re looking for. A simple way to do this is by making 2 different lists: a list of what you need from a home, and a list of things that you want from your home. The list of things that you need will include all the features that are necessary for you and your family to function comfortably during your daily life. Things such as the number of bedrooms you need for the size of your family, or a one storey home if accessibility is a factor. The list of things that you need will include features that you would like to have but that aren’t necessary, such as a pool or a den.
It’s also a good idea to make sure you are organized for your home search by doing some research on what area you’d like to live in. Look at all of the aspects of the location you are considering and the surrounding area: is it attractive based on your proximity to work, schools and amenities such as grocery stores, parks, commuter routes, etc.? Keep a detailed map on hand and highlight your areas of interest. Knowing what you need and what you want from a home, as well as what area will suit your lifestyle best will make searching for your new home easier and less stressful.
6.) GET A PROFESSIONAL ON YOUR SIDE
The purchase of your first home is one of the biggest and most exciting investments that you will make. This purchase will affect your family, your finances, and your lifestyle. For a decision this important you want to make sure that you have an experienced professional on your side who can guide you through the process and protect your best interests along the way.
Best of all, as a home buyer the professional services of your Buyer’s agent are completely free to you! As is the industry standard, your buyer’s agents fees are paid by the home seller. A licenced agent will protect your interests by making sure that you are fully informed about your purchase and by handling the legalities and negotiations.
What The Peggy Hill Team Can Do For You
When you with with the Peggy Hill team, you not only get the benefit of working with an experienced professional, you also receive the services of a whole team of people dedicated to the stress-free purchase of your home! Where else can you employ the services of entire team of professionals at no cost to you?
We understand the importance of purchasing your first home and we believe that every real estate purchase should be handled with the utmost responsibility and care. Buying your first home should be exciting, informative, comfortable and stress-free.
We Pledge To:
- Go Above & Beyond.
- Provide you with the highest level of customer service.
- Work as your partner in the purchase of your home. To consult with and educate you, so you can make informed decisions regarding the purchase of your new home.
- Provide you with stress-free real estate experiences
- To learn more about our philosophy visit our Missions, Values & Goals page
- WE ALSO OFFER A NUMBER OF COMPLIMENTARY SERVICES, ALL GEARED TOWARDS MAKING YOUR FIRST HOME PURCHASE EXCITING, INFORMATIVE, COMFORTABLE AND STRESS-FREE. OUR TEAM WILL PROVIDE YOU WITH:
- Coming Soon Listing Access – Get ahead of the game in your property search by signing up to view The Peggy Hill Team’s exclusive Coming Soon Listings! View photos and information, and book showings before anyone else! Sign up for Coming Soon Access.
- A Dedicated Buyer specialist who is looking out for YOUR best interests.
- Information on market trends in the area.
- Information on government programs available for Buyers.
- Local school information.
- Factors affecting local neighbourhoods, such as zoning changes and new developments.
- Conditions and histories of properties.
- Comparative Market Analysis on homes you are interested in purchasing so you can determine what they’re really worth!
- Assistance in viewing unlisted (for sale by owner) properties.
- A whole team of professionals working towards the stress-free purchase of your first home. Meet the Team to find out more about us.
It is our hope that you have gained some insight into the home buying process and that we’ve taken some of the mystery out of how to get started.
If you’d like more information on buying your first home, access to our detailed and comprehensive Home Buyers Guide, or to speak with somebody about buying your first home, sign up for a free, no obligation Buyer Consultation with one of our professional Buyer Specialists below