As you settle into Canada, homeownership may be something to consider for you and your family. Owning a home is a dream for many people, but there are many steps to go through before it becomes a reality. Below are nine steps to take before owning a home.
Buying a new home is a large financial commitment, so it is important to decide whether buying or renting a home is the best option for you. Consider the following questions when making your decision:
A majority of Canadians borrow money, using a mortgage, to buy their first home. Before you start looking for a home, determine what you can afford. Scotiabank offers an online tool to calculate the maximum purchase price you can manage.
Next, consider meeting with a Scotiabank advisor to start the mortgage pre-approval process. (Pre-approval means that your bank is committing to give you a mortgage for a certain amount with terms and conditions.) Typically, the pre-approval is valid from 60 to 120 days before the offer expires. This will let you know what price range you should consider when you start looking for a new home.
There are many options out there to help you on your journey to finding a home. You can work with a real estate agent, access real estate services online or buy your home privately without real estate services.
Good real estate agents are experts on the housing market, assist with the large amount of paperwork required to complete a home sale, negotiate on the final purchase price and provide overall guidance and support. To find a real estate agent, ask those in your new community if they can recommend one. You can also visit the website Realtor.ca, which can help you find someone with a good reputation. Alternatively, Scotiabank’s mobile mortgage specialists can refer you to a trusted Real Estate agent partner. Real estate agents earn money through commissions, which are paid by the home seller when a purchase is made.
Alternatively, online companies such as Purplebricks provide real estate services to customers through a fixed fee regardless of the value of the home.
Buying a home privately is also an option in Canada. This may happen if you find a home that is for sale by the owner and would like to simplify the exchange without a realtor. It is recommended that you have an expert, such as a lawyer, go over the paperwork before signing the deal to make sure you understand the details that are included.
Finding the right home in Canada also means finding a community that you would like to settle down in. Here are some things to think about:
Once you have found a home you like and can afford, you (or your real estate agent) will make an offer of purchase to the seller. The offer includes the closing date, price, deposit amount, a request for a current land survey of the property, home inspection and a list of items, such as a dishwasher or lighting fixtures, that you would like included in the purchase price.
After submitting the offer, the seller typically comes back with a counter offer that has revisions to the deal. This process can be stressful, but ultimately helps to make sure the agreement works for both parties.
Once you have an accepted offer, it’s time to get a mortgage. This is where your Scotiabank advisor will collect the necessary documents from you, such as your income and down payment, and also confirm the value of your property.
There are many different ways to get a mortgage and a variety of mortgage products to choose from. Talk to your Scotiabank advisor about the product that’s right for you.
Once your offer is accepted, it is important to have the condition of your new home inspected by a professional. Home inspectors will look for and evaluate mould, a damp basement, roof condition, plumbing problems, inferior electrical systems and more.
Take care when choosing an inspector, as most anyone can claim to be one. Most provinces have associations that require inspectors to meet professional standards, such as the Ontario Association of Home Inspectors (OAHI). You can also find more information about home inspectors from the Canadian Association of Home and Property Inspectors (CAHPI).
Closing day is when you get the keys to your home and officially become a homeowner. Usually this includes meeting with a lawyer, who will ensure that all legal and mortgage documents are signed, the home is registered in your name and that the down payment is transferred to the person selling the home.
Once you have moved in, remember to protect your investment by:
If you are a first-time home buyer you may be eligible for the Government of Canada’s home buyers tax credit. You will be able to claim this when you file your income taxes for the year.
Good luck on your journey to Canadian homeownership! Remember that budgeting and planning are fundamental to your success. Scotiabank advisors are available to provide you advice and solutions at any point during this process. Call us today to book an appointment!
Legal Disclaimer: This article is provided for information purposes only. It is not to be relied upon as investment advice or guarantees about the future, nor should it be considered a recommendation to buy or sell. Information contained in this article, including information relating to interest rates, market conditions, tax rules, and other investment factors are subject to change without notice and The Bank of Nova Scotia is not responsible to update this information. All third party sources are believed to be accurate and reliable as of the date of publication and The Bank of Nova Scotia does not guarantee its accuracy or reliability. Readers should consult their own professional advisor for specific investment and or tax advice tailored to their needs to ensure that individual circumstances are considered properly and action is taken based on the latest available information.