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Things You Should Know Before Buying a Home in Canada.

Things You Should Know Before Buying a Home in Canada.

Research well-done is something that will never fire back on you. So, it is always a good option to research buying a house before you buy one. Buying a property for the first time is an exciting experience. But you should have all the other information possible to make it a memorable one. Information on these facts, will not only save you time but will also save you money. Here are a few things that you should know before buying a home.

Check Your Finances

Finances are the single most vital aspect of buying a house, so make sure you have plenty. It is advised to at least have an emergency account with three to six months of expenses money in it. It will come in handy and be useful with any additional payment or emergency.

Build A Good Credit History

Buying a house is never an impulse decision for anyone. So, it is better to plan and get a credit history that will go in your favor when applying for a mortgage. A good credit score rating in Canada is 300–900. A good credit card rating will better help the lenders in assessing the risk they face while lending you money.

Get Pre-Approved Loan

You need to know the amount you need as a down payment on a house. In Canada, for a property of 500,000$, you will need to pay 5% of the total amount as a down payment. For a property valued between 500,000 – 999,999$, the down payment will be different. You will need 5% of the 500,000 and 10% of the rest of the amount as a down payment. Getting a pre-approved loan is the right way to go before you place an offer on a home.

Plan Ahead for Closing Costs

When you're buying a house there will be a few costs that will occur towards the end of the deal. Plan for these costs as well. These costs include land transfer tax, legal fees, title insurance, mortgage default insurance, GST (general sales tax) on the new home purchase, and a home inspection cost. It is wise to go through the home inspection so that you would know about any invisible problems with the property before you buy it.

Get Your Documentation in Order

A lender before loaning you money will require three details from you – your current assets, your income, and your current debt. They can also ask for the following information:

  • A photo identification issued by the government (driving license or passport)
  • Proof of employment
  • Proof of down payment
  • Information about your existing debts
  • Any other relevant information

Score First Time Buyer Incentives

As a first-time buyer in Canada, there are certain incentives that you can utilize. They include:

  • RRSP Home Buyer Plan
  • First Time Home Buyer’s Tax Credit
  • GST New Housing Rebate
  • Mortgage Default Insurance
  • Land Transfer Tax Rebate

These are just a few things that you should search about and keep in mind before investing your hard-earned money into buying a house. As previously said, this valuable information will save you both – time and money.

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