Simple Tips for Buying Your First Home in Ontario

Buying a home in Ontario is an exciting endeavor that can quickly turn into a nightmare if not approached properly. Indeed, with soaring real estate prices and rising demand for homes, it can be difficult to figure out where to start.

A real estate lawyer in Brampton, however, can make the entire process hassle-free.

Having a checklist can also help you move the process forward with the right mindset and knowing where to look.

Take a look at these tips for first-time homebuyers in Ontario that will help you settle into your dream home.

First-Time Homebuyer Strategies in Ontario

Here is a short guide for first-time Ontario homebuyers on the best way to go about the process.

Save Money for a Down Payment: The down payment on any property is determined by its purchase price. The absolute minimum amount on properties in Canada is 5% on ones costing up to $500,000. For most first-time homebuyers, the biggest hurdle is saving up this amount.

This is why it’s necessary to have a savings plan. The bigger the down payment, the lower your loan will be to pay the remainder.

However, the exact amount you set aside depends on the price of the entire property. Canadians typically make a 5% to 20% down payment. You can avoid paying mortgage default insurance to the Canada Mortgage and Housing Corporation (CMHC) when you make a down payment of 20% or higher.

Find a House You Can Afford: First-time homebuyers typically look for properties either online or through a real estate agent. Both are great ways to find homes suited to your price range and needs. You can send the ones you are interested into your real estate agent to help them understand what you are looking for. Plus, you can also use multiple listing services (MLS)  to look for places that meet your criteria.

Keep in mind that MLS listings are created, paid for, and maintained by real estate professionals. They allow your agent to target a pool of available properties. They may also have access to properties that aren’t listed yet.

Explore First-Time Homebuying Incentives: Our real estate lawyers in Brampton want first-time homebuyers to avoid common real estate scams and be aware of incentives from which they can benefit. In Canada, there are various programs to help you save money on your dream home. Some of the most common are:

  • Land Transfer Tax Rebate

Under this incentive, first-time homebuyers in Ontario, PEI, and BC get a rebate on part of the land transfer tax they paid for their property. Ontarians are also eligible to get a rebate on the land transfer tax in urban areas.

  • Home Buyer’s Plan

This incentive allows homebuyers to withdraw up to $35,000 from their RRSP to put towards a down payment on their property. When there is a couple involved, they can get up to $70,000 for the same purpose. However, the RRSP needs to be at least 90 days old and the homebuyer needs to sign an agreement to purchase or build a home. There are no taxes applicable on this amount as long as it’s repaid within 15 years of the withdrawal date.

  • HST/GST New Housing Rebate

Under the GST/HST new housing rebate system, homeowners are eligible to be reimbursed part of the GST/HST they pay on the property price of the cost of building a new one. This can also be accessed by homeowners building an addition onto an existing property when converting a non-residential property into a home or on the overall cost of a substantial renovation.

  • First-Time Homebuyer’s Tax Credit (FTHB)

This incentive plan provides a non-refundable income tax credit amount of $5,000 on a qualifying home that is acquired after January 27, 2009. Eligible individuals can receive up to $750 in federal tax relief.

Get Pre-Approved: The primary aim of a mortgage pre-approval is to ensure you are purchasing a property within your budget. It requires that you have everything in place for approval, from paperwork to your credit report to verify your income. You may be required to submit a 90-day history of the funds used for the down payment. This will help you find properties within your budget and shows the seller you are serious.

Consider Your Goals: Real estate lawyers in Brampton strongly recommend choosing a home only when you are ready. Keep in mind that purchasing a house is both expensive and time-consuming. Newlyweds should ideally wait at least a year before they begin looking to buy one.

Also, if you aren’t a permanent resident or Canadian citizen, there are other conditions to keep in mind. For instance, along with paying the land transfer tax, you will also have to pay another 13% non-resident speculation tax.

It’s good to start planning for the future. Discuss your options with your real estate lawyer and agent. This will help you understand the next steps in the process. With a lawyer, you won’t have to worry about the legal aspects which can go a long way towards ensuring you make the right choice. Ultimately, as a first-time homebuyer in Ontario, you will need luck, perseverance, and a plan. It will take you closer to your goal of homeownership while ensuring you make an informed investment.