FIRST TIME HOME BUYER
If you are a first time home buyer, the process of purchasing a home may feel overwhelming. Buying a home will likely be one of the biggest investments you’ll ever make and you want to make all the right decisions. I have been through the process with people many times since I became an agent in 2003 and I will provide you with all the information and advice you need in order to make your experience a great one! I particularly enjoy working with first time home buyers because it is such an exciting time in a person's life.
There are some basic prerequisites to buying a home.
- The first thing to consider is do you have a steady source of income (usually a job)?
- Have you been employed on a regular basis for the last few years and is your current income reliable?
- Do you have a good record of paying your bills and have few outstanding long-term debts, like car payments?
- How about extra money saved to pay legal fees, deposit (approximately $1,000 which is part of your down payment but comes out of your bank account upon acceptance of an offer) and a 5% down payment (less the amount put down in the deposit)?
- If you were paying a mortgage, would you have extra money available to pay for maintaining your home and any unexpected expenses that may arise?
If you answer "yes" to the questions above, you may be ready to buy your own home. I would suggest that before you go any further, you call your bank and ask for an appointment with a Mortgage Specialist or call a Mortgage Broker. I have posted a list of recommended local Mortgage Specialists here. He/she will answer all of your financial questions and help you determine whether or not you are ready to buy a home. Even if it turns out you are not, your time was not wasted as you likely now know the things you need to work on in order to be ready in the future.
Hopefully after your first meeting with your mortgage specialist you will know a whole lot more about the financial end of buying a home. He/she has likely asked you to collect some documents and information used to obtain a pre-approval. Having a pre-approved mortgage will give you the confidence of knowing that you can get the mortgage required and exactly what you can spend on a home before you start looking. You will also be protected against interest rate increases while you look for your new home. It would be a good idea to talk to several banks and a mortgage broker in order to compare interest rates and options. It is often possible to negotiate a lower rate than you may be first offered. This makes some people feel uncomfortable but remember that even a small difference in your mortgage rate can mean thousands of dollars in interest over the period of your mortgage.
Special Government Plans to Help First Time Home Buyers
Grey County Home Ownership Program
This program is designed to provide renters with a loan, up to 5% of the purchase price, to assist them in purchasing their own home. The program assists eligible renters in Grey County in the purchase of a home that does not exceed the purchase price of 224,976.00. Applicants must be eligible for a mortgage and cannot exceed the maximum household income of $74,100 and assests of $30,000. More information and application at link below:
Grey County Housing Downpayment Program Info and Application
Use RRSP's
Canada’s Home Buyer’s Plan allows a first-time purchaser a one-time chance to withdraw up to $25,000 from their RRSPs, with the condition that the money be repaid in 15 years. You can withdraw up to $25,000 from your RRSP. Contributions must be in your account for at least 90 days before they can be used for the HPB. If you buy the home together with your spouse, partner, or someone else, each of you can withdraw up to $25,000. Go to Government of Canada - Home Buyer's Plan.
Land Transfer Tax Credit
As a first time home buyer in Ontario you are eligible to receive the Ontario First Time Home Buyers Land Transfer Tax Credit, a tax credit up to $2000. This means eligible buyers will not have to pay a land transfer tax on homes up to $227,000. In order to qualify the land must be owner occupied; and the purchaser(s) cannot have owned a house, or interest in a house, regardless of location. To instantly receive this rebate, upon purchasing your first home, advise your lawyer ahead of time that you qualify to receive the rebate. For more information on the governement credit, go to Land Transfer Tax Credit for First Time Home Buyers. If you do not qualify, the usual land transfer tax is calculated as follows: .5% for first $55,000 and then 1% from $55,000 to $250,000 of purchase price and 1.5% of any balance. i.e. $170,000 home would be $1425.
I have all kinds of information on my website that will help you, the first time home buyer. Spend some time reading as much as you can and then call me at 519-270-7177 with your questions, concerns and to arrange a tour of houses that meet your specifications.
Continue reading my Home Buying information at Costs to Consider when Buying a Home and Buying a House.
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Articles
Preparing to Buy
Step 1: Is Homeownership Right for You?
Step 2: Are You Financially Ready?
Step 3: Which Home is Right for You?
Step 4: The Buying Process
Step 5: Now That You're a Homeowner
Words to Know When Buying a Home
User-Friendly Checklists and Worksheets
Afordable Housing Programs in Ontario
Your Realtor Can Help
Moving with Kids
Moving with Pets
TD Mortgage Rates
Calculator and Tools
Learn About Mortgage Pre-Approval
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