Are you thinking of owning a home in Canada? You’ll discover that there are numerous milestones to cross and decisions to make in your quest to become a homeowner.
It takes a lot of planning, and you’ll save a lot of money and avoid stress if you take time to properly plan and do your homework first before embarking on this quest.
Here’s a summary of everything you need to know about owning a home in Canada.
1. Decide if Homeownership is Right for You
First things first, before you start figuring out how to get funding or hunting for the perfect property, you need to determine if owning a home is for you or if now is the right time for it.
Most people are better off renting a property because of their financial situation and other factors. So, if your financial situation is leaning more towards renting than buying then check here for the best and most affordable places to rent. Buying a home is a decision with huge financial implications, and you have to carefully plan it based on how you earn, what you’re currently spending, and what you can afford to spend in the future.
Knowing what you can afford will also be helpful when accessing your mortgage options and determining the kind of house you can afford.
2. Know Your Home Financing Options
The next step is to explore the various options for financing your home-purchase quest. As you will discover during your research, there are various mortgage products tailored to specific housing market segments.
Understanding how all of these work is crucial to finding a loan that perfectly meets your needs. Some of the home mortgage options include:
- Conventional vs. High Ratio Mortgages
Any mortgage where your down payment is less than 20% of the property value is referred to as a high ratio mortgage.
Conventional mortgages only give you a maximum loan of 80% and do not have to be insured by the Canada Mortgage and Housing Corporation (CHMC) against payment default.
- Fixed vs. Variable Interest Rates
Mortgage plans can either come at fixed or variable interest rates. While fixed interest loans have the rate locked down throughout the mortgage, a variable interest mortgage rate will vary based on market conditions.
- Open vs. Closed Mortgages
This refers to the payment schedule of your mortgage. With an open mortgage, you can pay lump sums and clear up your mortgage before the end of your loan period. But with a closed mortgage, the repayment schedule is fixed.
Considering all of these will help you determine the degree of flexibility, interest rate, loan term, and other factors that affect your loan repayment.
3. Find the Right Home
Knowing your mortgage options and how much you can access them will guide your house-hunting efforts. But the price is only one of several factors to consider when buying a home.
You should prepare a checklist of other things to look out for, such as the type of home, the lot size, number of rooms, location, tax requirements, utilities, and so on. You’ll need all of these to compare the various houses.
The size of your family, proximity to essential facilities, and transportation network are also crucial factors to consider.
To ease the house-hunting process, you may need to hire professionals such as buyer’s agents. This is a special type of real estate agent that works for you and negotiates on your behalf with the seller or their agent.
You also need the services of an attorney that will guide you through the home buying paper paperwork.
4. Make an Offer and Close the Deal
When you find a property that fits your requirements, you can negotiate with the seller. Asides from the purchase price, other parts of the deal that you may need to negotiate include the closing cost and date, warranties, leaseback options, home repairs, and so on.
With the help of the total.law Ca Lawyers, you can make an offer on the home and open negotiations with the seller.
In most cases, some back and forth will be required at this stage until you establish the most favourable deal for both parties. Once your offer has been accepted, a legally binding agreement will be signed along with the mortgage for the home.
Final Thoughts
Owning a home in Canada is not a walk in the park. So, if you think you don’t have the financial power, many affordable apartments are available for rent. And you can easily file a claim for housing disrepair if the apartment is not comfortable enough for you.
However, as a first-time homebuyer that’s unfamiliar with the process of owning a home in Canada, all of the steps in this post can appear daunting.
Fortunately, there are professionals that can guide you through the process and assist you with negotiations.
You will find their help valuable in finding the right property and negotiating a favourable deal for your new home.
This is a contributed post and therefore may not reflect the views and opinions of this blog or its author. ☺
