A PERFECT GUIDE FOR THE FIRST TIME HOME BUYER

SAVING UP FOR THAT HEFTY DOWN-PAYMENT\n\nHave you ever wished that someone would just hand over the keys to a house? Well, it turns out there are ways for first-time home buyers to buy their dream property. For example, if your budget only allows $40000 of down payment but is still within range of the minimum requirement set by Canada’s Housing and Mortgage Corporation (HMC), then try putting in 10% or more upfront money into an RRSP account with HMC’s Home Buyers’ Plan. The plan lets you borrow up 25% of whichever balance is left after purchasing a new residence - this means 50%. Basically, enough cash so that when combined with what was saved will equal at least 5%.\n\nThe biggest hurdle for first time home buyers is saving up. Once you’ve figured out the down payment amount you can afford, you can use a mortgage payment calculator to estimate what your monthly payment will be.\n\n PRE-APPROVAL?\n\nYou know when you’re looking for a new home and searching through listings? You might think the first step is to contact your realtor, but it’s not. Most Canadians believe that calling their agent would be the next logical move in buying a property, but this isn’t correct! It turns out that most people who are interested in finding an affordable place don’t want anything fancy or too expensive.\n\nYou just found an amazing open house listing on Realtor.ca-- time for some quality Sunday night research! But wait...you can call up any of those guys with big signs at every corner promising “fastest sale guaranteed”? Nope: contrary to popular belief among Canadian homeowners-to-be (or so we’ve been told), contacting agents should come AFTER you have made an appointment with your bank’s mortgage specialist or an independent mortgage broker.\n\nMAKE SURE YOU CAN AFFORD IT! \n\nBuying a home is often considered one of the most important decisions in life but being realistic about what you can afford to buy and carry could be just as crucial. Your annual household income will help determine how much money you have for mortgage payments each month. However, when deciding between buying or renting your new place it’s also good to consider other monthly expenses like property taxes and condo fees that might factor into the total amount available for carrying costs - such as heating electricity bills!\n\nMany people dream of owning their own homes at some point in their lives although we must always remain realistic with regards to our financial constraints. The size of your bank account will depend on whether or not you are able to make full payment towards purchasing a house every year.\n\nDO YOUR HOMEWORK.\n\nOne of the most important steps in your home hunt is to ensure that you’re getting the best deal on a mortgage. You don’t want to just go straight for what’s local and expect it’ll be better, because odds are high that bank branches won’t offer their clients or customers anything but an average rate (which definitely isn’t good enough). Make sure you do all research necessary by comparing rates with different banks, lending agencies, brokerages so you know which one will give YOU THE BEST RATE POSSIBLE!\n\nHAVE YOU HEARD OF CANADA’S FIRST-TIME HOME BUYER PROGRAMS?\n\nWhen first-time homebuyers purchase their new homes, they are often unaware of the various government programs that could help them save money. These include rebates for energy efficiency and tax efficient ways to fund your down payment as you enter homeownership! Whether it’s a rebate you may qualify for or a tax-efficient way of funding your down payment, there are many options available when purchasing property in Canada which can potentially save some hard-earned cash. The Home Buyers’ Tax Credit currently works out to a rebate of $750 for all eligible first-time home buyers.\n\nThe Canadian government’s Home Buyers’ Plan (HBP) allows firsttime home buyers to borrow up to $35,000 from your RRSP for a down payment, tax-free.\n\nIf you qualify, land transfer tax rebates are available to first-time home buyers in the province of British Columbia.\n\nIf you buy your home before it’s built, or if you substantially renovate an existing home, you could qualify for a rebate for a portion of the sales tax. The GST/HST new housing rebate amount you can qualify for depends on the purchase price of the home and can only be claimed if the net purchase price is $450,000 or less. First Time Home Buyer Guide - all you need to know about buying your first home. Ratehub.ca. (n.d.). https:// www.ratehub.ca/first-time-homebuyer-guide.\n\nYOUR SAVINGS JOURNEY HAS JUST BEGUN!\n\nYour down payment and your monthly mortgage payments are just the beginning of buying a home. There is so much more to consider than what you think! You have closing costs, land transfer tax, CMHC insurance (which protects lenders), utilities like hydro or gas for heating - there’s also property taxes that vary from region-to-region in Canada. That’s why we recommend setting up an emergency fund before purchasing anything else – it can really come in handy when unexpected expenses arise during house hunting season such as power outages due to winter storms which might shut electricity off temporarily until repairs take place.\n\nWritten By: Sami Ahmad