For many Canadians, getting their foot in the door of the real estate market is harder than ever. New stress test rules are making it harder to borrow. While recent years have seen the minimum down payment rules shift in favour of a larger lump sum. And that’s not even mentioning the current seller’s market climate with steep competition and rising real estate prices. 

However, all is not lost and the dream of homeownership is still a viable possibility for millennials and their contemporaries. 

Especially when we consider that a major part of the Liberal Party’s election platform hinged on policies targeted to help first-time buyers. 

Let’s take a look at how some of these programs could help you reach homeownership in 2022:

The Tax-Free First Home Savings Account

Currently, Canadians can draw funds tax-free from their RRSP for a house downpayment, however, the catch is that they are then beholden to pay that money back after a certain period of time. 

The Liberal Party has promised to implement a new type of savings account that will help first-time buyers save for a down payment without requiring them to repay. The account is designed for Canadians under 40 and will allow them to save up to $40,000 toward the purchase of their first home.  

Additionally, if you save $40,000 but do not use the full amount for your down payment, the leftover funds will revert back to an RRSP. 

Did you know that we host monthly webinars for first-time buyers? You can sign up for our latest webinar right here. 

The Buyer’s Bill of Rights

In today’s competitive seller’s market, buyers can feel discouraged about bidding on properties. First-time buyers especially, since they are the ones with less experience and, in most cases, less purchasing power. 

The Liberal Party’s Buyer Bill of Rights intends to soften some of these issues. Policies like a ban on blind bidding, establishing the legal right to a home inspection, and numerous clauses that improve the transparency of real estate transactions in favour of the buyer. 

Ready to buy your first home? Take a look at some of our great resources for first-time buyers:

• How Will Rising Interest Rates Affect Buyers?
• Our Top 6 Milton Condos for First-Time Buyers
• Our Top 8 First-Time Buyer FAQs

Doubling the First-Time Home Buyers Tax Credit

A lot of Canadians rely on the First-Time Home Buyers Tax Credit to help with many of the extra expenses associated with buying a home. It’s a helpful resource to pay for things like closing fees, moving expenses, and more. 

Currently, the tax credit is capped at $5,000 but the plan for 2022 is to increase it to $10,000. 

Want to learn more about getting a mortgage? We spoke with some of our amazing mortgage broker contacts to answer some of the top questions you might have. You can read the post here.

Still Available: The First-Time Home Buyer Incentive

This program has been around for a while now and has seen some improvements made over the year. The incentive is a shared equity mortgage designed to help qualified first-time homebuyers enjoy a lower monthly mortgage payment without having to pay a larger lump sum down payment. 

The incentive is shared with the Government of Canada. And the amount depends on the overall purchase price of your home. Although you are required to eventually pay back the investment, you are not required to pay interest or ongoing payments on the loan. 

Get your buying journey started by downloading our Buyer’s Guide right here. 

2021 was a landmark year for the real estate market in Canada. Not only did we see some of the busiest months on record, but we also saw housing inventory drop to the lowest level on record. Across the board, it was a record-setting year too, with prices rising and interest rates at the lowest they’ve been in years. 

For buyers, 2021 has been a tumultuous year, to say the least, and if you’ve been following the real estate market closely as we have, you’ll know that buying a home in these conditions is sometimes challenging.

So what does 2022 hold for the real estate market? Only time will tell, but we can make a few assumptions and predictions about what we will see in the new year. In this post, we’re providing our insight and advice on buying a home in 2022. 

Let’s get started…

Interest Rates are Rising

One of the biggest drivers of the current market conditions is the low-interest rates we are currently experiencing. Essentially, the Bank of Canada initially lowered interest rates in an effort to help the Canadian economy during the pandemic. As the country’s pandemic recovery continues to improve, regulators have determined that it is now safe to start increasing the rates again.

Expert economists predict that we will see interest rates go up at least three times in the next year or so, with the first jump happening sometime in the spring. 

As a buyer, this means you should do what you can to lock in a mortgage rate with your preferred lender sooner rather than later. Most mortgage interest rates can be secured for 30-90 days, so even if you are planning to purchase in February or March of 2022, you should get a head start with your mortgage approval process now to fully benefit from the current low-interest rates. 

Our team hosts monthly webinars for first-time buyers. Sign up here to learn everything you need to know about buying. 

The Market Will Remain Competitive

Housing supply remains a significant issue facing today’s buyers. Simply put, there are not enough homes on the market right now to satisfy the demand of buyers who want to purchase. As a result, many homes that are listed for sale sell quickly and often over the asking price. In many cases, listings go into a multiple offer situation where there are numerous buyers vying for the home and competing to present the best offer. 

So far, we believe that the supply issue will remain present well into 2022, and therefore, we will continue to navigate a competitive seller’s market. 

The best way to find success buying in this type of market is to work with a professional real estate agent who knows sellers in your area and can help you by showing off-market listings and helping you to craft compelling offers that will motivate sellers while also preserving your investment and protecting your best interests. 

Looking for your dream home? Check out our featured listings right here.

Tradition is No Longer the Status Quo

Most real estate markets across the country have two distinct ‘busy’ seasons. Typically, the fall market and the spring market are the most active markets in real estate. In fact, many sellers will strategically list their homes at those times because they know that most buyers will be active in the busy periods. 

However, after 2021, we can say with some confidence that this decades-old tradition is not as relevant as it used to be. More sellers are choosing to list their homes at a time that works for them on a personal level. 

There are many benefits to listing a home for sale in the ‘offseason’, and as a result, buyers need to be available and ready at all times of the year, not just during the traditional fall and spring markets.

We’re passionate about helping buyers find their perfect home. Check out some of our buying resources here:

• Our Top 6 Milton Condo Buildings for First-Time Buyers
• 5 Questions You’ve Always Wanted to Ask a Mortgage Broker
• A Buyer’s Guide to Pre-Emptive Offers
• Our Top 8 First-Time Buyer FAQs

Canadians Will Become More Concerned with Affordability

Limited housing supply and increased buyer demand will continue to contribute to rising prices in the Canadian market. However, at the same time, Canadians are becoming more concerned with affordability. 

As a result, homes with investment opportunities such as duplexes and basement apartments might become more popular in the future. 

Along with this type of thinking, many Canadians are still looking for homes with more space. Working from home is becoming more prevalent in the wake of the pandemic, and although buyers won’t exit urban markets at the same pace as 2020, we do expect to see many buyers choose to move out of bigger cities like Toronto and invest in smaller communities with more space and lower prices.

The Liberal Party’s Plans

After the federal election from this past fall, we learned a lot about what the Liberal Party has in store for Canadians when it comes to the housing market. The government has promised to implement policies such as a tax-free first-time home buyer savings account, rent-to-own measures, a buyer’s bill of rights, and improvements to the first-time home buyer’s incentive program, and more. 

How to Buy a House in 2022

If buying a new home is on your list to do for 2022, the best way to go about it is to work with a professional REALTOR®. In a competitive seller’s market when market conditions are not favourable for buyers, you need someone on your side to help give yourself an advantage. 

Professional REALTORS® know the area and the market and can provide you with advice and strategies to appeal to sellers, find your dream home, and successfully buy a house this year. 

Want to learn more about buying a home in Canada this year? Download our buyer’s guide here. 

For many Canadians, homeownership is one of those life goals that you work hard to achieve. And once you’ve arrived, there’s nothing that feels better. However, today, buying your first home can present a challenge. 

One of the best strategies for first-time buyers to get their foot in the door is by purchasing a condo. Condos are a great investment and since they are typically less expensive than single-family detached homes, it’s more affordable for first-timers to save a downpayment and finance the purchase. 

Additionally, condos are typically located in accessible areas close to amenities such as dining, retail, transit, and more. Condos also minimize the maintenance for the homeowner, since much of the building upkeep is covered by condo association fees. 

When you consider the trifecta of affordability, location, and convenience, it becomes totally clear that condos are an excellent investment for those entering the market for the first time. 

If you’re looking for a great condo opportunity, you can start with our top 6 Milton condo buildings for first-time buyers here: 

1. GreenLife Downtown 

Situated at 383 Main Street East in Milton, GreenLife Downtown is a fantastic opportunity for environmentally-conscious buyers. This six-storey condo building features fantastic high-efficiency and environmentally friendly tech such as solar panels and geothermal heating. 

With its prime location in the heart of Old Milton, GreenLife Downtown offers fantastic views of the Niagara Escarpment while remaining close to urban conveniences. 

Built in 2012, the building features various unit sizes and floor plans running from 685-1,375 square feet. One of the main selling points of GreenLife Downtown is the affordable condo fees, ranging from $78-$160 per month, it’s a great value when you consider the building amenities such as the environmentally friendly development, party room, and fitness room. 

Want to learn more about living in Milton? Check out some of our other Milton-centric blogs right here:

• Thinking of Moving to Milton? Check Out These Area FAQs
• Your Quick Guide to Milton Real Estate
• Your Quick Guide to Living in Milton

2. GreenLife Westside

If downtown doesn’t appeal to you, consider the GreenLife Westside building. Built in 2014, this six-storey energy-efficient building is located at 33 Whitmer Street in Milton. Although public transit in this area is not as accessible as downtown, GreenLife Westside has ample parking for residents and visitors who drive. 

The building is close to urban amenities such as the local Shoppers Drug Mart, Starbucks, and Ajs The Grocery found only a 10-minute walk away. Nature lovers can also enjoy the convenience of having several fantastic parks and walking trails nearby including Centennial Park, Rattlesnake Point, and Kelso Conservation Area. 

Like its downtown partner, GreenLife Westside has a variety of floorplans and unit sizes ranging from 647 square feet to 1470 square feet. The building also includes a party room, meeting room, recreation room, security system, and barbecues permitted. 

3. Ambassador Condominiums

The Ambassador Condominiums consist of two six-storey buildings located at 1419 and 1421 Costigan Road in Milton. Build by Valery Homes in 2014, The Ambassador includes 150 units of varying sizes from 602 square feet all the way up to 1,354 square feet. 

Surrounded by green space and featuring beautiful building amenities such as a designer lobby and a sunroom lounge overlooking the yard, this condo was built to impress. The building amenities include a party room and exercise room.

Situated in a quiet residential neighbourhood, The Ambassador is close to the Milton GO Station as well as the 401 for easy commutes and transit access. The area also features abundant parks, walking trails, dining, shopping, and other conveniences. 

4. Viva and Viva2 Condominiums

Built in 2016 and 2017 respectively, Milton’s Viva and Viva2 Condominiums are situated in the residential neighbourhood of Clarke. These four-storey buildings are located at 1360 and 1370 Costigan Road. 

Close to outdoor recreation such as parks, walking and bicycle paths, and more, these condos are perfect for first-time buyers who want to capture the beauty, convenience, and comfort of living in south Milton–an area that is quickly on the rise! 

With one and two-bedroom options and floorplans ranging from 585-1,040 square feet, Viva and Viva2’s open-concept, contemporary design provides opportunities for first-time buyers, investors, and downsizers alike. 

The buildings feature a party room and proximity to transit like the 401 and Milton GO Station. 

Buying your first home can be complicated, but it doesn’t have to be! Read some of our first-time homebuyer blogs right here:

• 5 Questions You’ve Always Wanted to Ask a Mortgage Broker
• Our Top 8 First-Time Homebuyer FAQs
• Multiple Offer Scenarios: Tips for Homebuyers

5. Parkside Residences 

Located at 1379 Costigan Road, Parkside Residences is a six-storey condominium complex built in 2010. As part of the Milton neighbourhood of Clarke, this condo is situated close to many local amenities such as shopping, dining, conveniences, and recreation. 

With units ranging from 619-1,056 square feet, and being an older building, Parkside Residences is perfect for buyers entering the market for the first time. Building amenities include a party room, barbecues permitted, visitor parking, and more. 

One thing to note about Parkside Residences is a pet restriction, so if you have pets, this building might not be for you. 

You can also download our Buyer’s Guide to learn everything you need to know about buying a home with the Katherine Barnett Team. Download the guide for free here. 

6. Art on Main

As the newest condo on our list, Art on Main is an incredibly stylish, luxurious, all-encompassing condo experience. Built by Fernbrook Homes, Art on Main is located at 1050 Main Street East in Milton. 

Featuring 2-bedroom and 2-bedroom + den floorplans, Art on Main is redefining the local condo experience. With exceptional finishings and absolutely astonishing building amenities, Art on Main is sure to attract buyers looking for an elevated experience in one of Milton’s most exciting neighbourhoods. 

Close to incredible neighbourhood amenities and featuring ground-level retail in the building, Art on Main has everything you need. Building amenities include a state-of-the-art fitness centre, pool, party room, billiards room, rooftop terrace, barbecue stations, pet spa, and 24-hour concierge service. 

When you are considering taking your first step into the real estate market, a Milton condo is an excellent investment to start with. Whether you crave the condo lifestyle or you see owning a condo as a great way to build equity before upsizing into a detached home, Milton condos are always in demand for buyers, investors, and renters alike. 

As a real estate team, one of our most important relationships is with the mortgage brokers we work with. Aside from finding your ideal property, the most significant part of the home buying process is securing a mortgage and payment terms. 

At the Katherine Barnett Team, we work closely with several mortgage brokers. The reason we work with several is that much like choosing a real estate agent, choosing a mortgage broker is a very personal decision. It’s important to choose an individual who gels with your personality and can help you achieve your goals and meet your budgetary needs. 

In this post, we’re talking Agnes Mocko of Mortgage with Agnes and Joanna Skowron of The 6ix Mortgage Group to answer the questions you’ve always wanted to know about working with a mortgage broker. 

1. First of All, What’s the True Difference Between a Mortgage Broker and a Bank?

Joanna: When you go straight to the bank, you only have access to what that particular bank offers, and those mortgage programs may not be in alignment with what you need. However, working with a broker is a one-stop-shop! We collect the same information the bank does, but what’s different is that we have access to the whole spectrum of lenders at our fingertips, which includes the bank you were considering going to!

Agnes: Also, a bank has a certain type of box they need their applicants to fit into, which is why a lot of people get turned down. Mortgage Agents provide expert advice and work alongside their clients throughout the entire process. It’s almost as if you have a Google search engine in your back pocket throughout your entire homeownership journey.

Looking for more first-time homebuyer resources? You’ve come to the right place! Check out some of our other blogs:

• The True Cost of Buying a Home: What You Need to Know
• Our Top 8 First-Time Homebuyer FAQs
• How to Hire a Real Estate Agent as a Buyer

2. How Soon Should You Start the Mortgage Application Process when Buying a Home? 

Agnes: You should at least have a conversation with a Mortgage Agent as soon as you begin considering buying a home. The reason for this is because sometimes applications need some tweaking in order to get to the desired purchase price. A good mortgage agent can provide you with advice on how to meet your goal once that time comes. When it comes to a pre-approval, it is important to get one done prior to contacting a realtor. The reason for this is because once you have your pre-approval, you can confidently look for homes within your budget, avoiding any disappointment or wasted time on homes that may not be in your reach. 

Joanna: I would also add that the speed at which a client gets pre-qualified mainly depends on how quickly the required documents get sent over. I would recommend speaking with a mortgage agent about a week prior to house hunting to give a client adequate time to collect their paperwork and enough time for a mortgage agent to input all the information and ask for clarification if need be! 

The great thing about getting a pre-approval is that it offers a ‘rate hold’ that lenders will honour the interest rate the client has been pre-approved for or will adjust the interest rate if it drops for up to 120 days. 

3. Fixed-Rate Vs. Variable: Which Type of Mortgage is Better? 

Joanna: I wouldn’t necessarily say one is better than the other because it depends on what the client is comfortable with. If you’re the type of person who likes to know exactly how much you’re paying each month for peace of mind, I would recommend a fixed rate. If you’re the type of person who is okay with fluctuation in the payment, paying a little bit more or a little less, depending on how interest rates are looking, a variable rate could be the way to go. 

However, generally speaking, variable rates tend to be lower, and historically have shown to be less expensive in the long run.  

Agnes: It’s important to understand the penalties within the mortgage contract when making your decision. It’s quite common to see Canadian homeowners break their fixed mortgages. And fixed-rate penalties use either the greater of three months interest or a calculation known as the “Interest Rate Differential” (IRD). This is the difference between the interest rate attached to your mortgage and how it compares to a current rate that most closely matches your remaining term at that point in time. The issue is no one knows where interest rates are heading, making it impossible to predict. 

Variable mortgage penalties, on the other hand, typically only consist of up to three months of interest. 

Check out more homebuyer resources right here:

• 5 First-Time Homebuyer Mistakes to Avoid
• Download Our Buyer’s Guide

4. What’s the Number One Thing First-Time Homebuyers Should Know? 

Joanna: Get pre-approved! In a market where homes are flying off the shelves, it is extremely important to know what your budget is. Something I say all the time is house hunting without a pre-approval is like going shopping without knowing how much money you have in your wallet.

And with this pre-approval, the actual submission of your mortgage application is a lot easier. Because the majority of work has been completed in advance, you won’t have to worry about scrambling for paperwork in such a fast-paced environment. 

Agnes: I would say to get into the market as soon as you can afford it. You can buy a home with as little as 5% down. Be open-minded when looking for your first home. Remember, you are making an investment.

5. What’s the Difference Between a Mortgage Renewal and Mortgage Re-Finance?

Joanna: When the term of your mortgage is close to expiring, you’ll receive a notice from your lender offering you the option of renewing that mortgage with a new rate, and term. It’s a straightforward process stating that you’d like to move forward with your current lender, under the new specifications. 

Agnes: Refinancing a mortgage means you are replacing your existing mortgage with a new mortgage to do things like fund a renovation, take out money to buy an investment, secure a better rate, consolidate debt, etc. 

In order to get the money to refinance, an appraisal needs to be conducted on the home and the current mortgage balance is subtracted from this total. A borrower can then access up to 80% of the remaining amount. However, the borrower needs to qualify for this new mortgage amount.

Interested in learning more about mortgage rules and working with a mortgage broker? We host two webinars with Joanna and Agnes each month! Register for the next webinar here and join us live! 

Basement apartments are an increasingly popular trend we’re seeing among homeowners these days. As housing prices continue to rise, and the housing supply continues to diminish, people are looking for alternative ways to navigate the market. 

If you followed the recent federal election, you’d know that housing affordability was a major part of each party’s platforms. However, policies and laws can only go so far and many Canadians want to take things into their own hands. This is where secondary suites and basement apartments come into play. 

Here’s everything you need to know about buying a home in Milton with a basement apartment…

What Defines a Basement Apartment?

Basement apartments, sometimes also called secondary suites or accessory apartments are defined as a “self-contained dwelling” created by converting a section of the main dwelling into a secondary dwelling. 

Basements make popular accessory suites because it’s often fairly easy and inexpensive to turn a basement into its own apartment. 

What are The Benefits of Basement Apartments? 

Whether you’re a first-time homeowner or an empty nester, there are many benefits to having a basement apartment as part of your house. 

Getting your foot into the real estate market as a first-time buyer can be difficult. As home prices in Canada continue to rise, it’s becoming increasingly hard for young people to afford to buy a home. For these types of buyers, a basement apartment is a great option because it means they can collect rent from a tenant to help supplement their mortgage payments, improving affordability overall. 

Empty nesters can also reap the benefits of a basement apartment. These types of homeowners are typically dealing with excess space in their homes. If they aren’t quite ready to downsize but want to maximize the use of their space and make a little extra money, a basement apartment is a great option. 

Basement apartments are essentially real estate investments and can be used to further your space in the market, give exceptional landlord experience, and help you increase your investment portfolio. 

Buying a House with an Existing Basement Apartment vs. Building New

Basement apartments can significantly increase the value of a home. So if you are in the market for a property with an existing basement apartment, expect to pay a higher price initially. 

However, building a basement apartment might take an initial lump sum investment on your part, but in turn, will increase the property value should you want to sell later. 

If you’re currently in the market for a home, and you know you want to rent out the basement, it’s certainly worth looking into buying a house that has an existing basement apartment. It would save a lot of work and time on your part. 

However, it’s also important to consider the ROI. Do some research into how much building an accessory suite would cost vs. how much rent you could charge in that neighbourhood. This might give you a better idea of whether or not buying an existing house with a basement apartment is better for your unique situation rather than renovating and building your own. 

Ready to buy a home? Get started here:

• Our Top 8 First-Time Buyer FAQs
• The True Cost of Buying a Home: What You Need to Know
• A Buyer’s Guide to Pre-Emptive Offers

Thinking About Building a Basement Apartment? Don’t Forget About the Legalities

Building a basement apartment in Milton requires some careful planning and consideration on the homeowner’s part. For example, before you start building, you need to obtain a building permit and ensure your apartment meets certain regulatory standards:

• The basement apartment must be located in a detached single-family home. 
• It must have access to municipal sewer and water with either laundry in-suite, laundry connections, or shared laundry services.
• There must be at least three legal parking spaces on the property.
• Ceiling height must be at least 6′ 11″ (2.11 m), and 6’5″ under beams
• It must not be greater than 85m² or 915sq/ft in size. 
• 45 min floor and wall fire separation (requirements are different in older buildings)
• The dwelling must have its own private entrance.
• The home must have a walkout egress or window egress with a minimum 3.8 sq/ft clear opening.
• The building must have all the appropriate permits and inspections.

Legal vs. non-legal basement apartments is a hot topic in Milton and the GTA. Learn more about it in our blog What Makes a Basement Apartment Legal in Milton here.

How to Maximize Your Basement Apartment Income

Building a basement apartment is more than just sectioning off a part of your home and collecting rent. You are essentially becoming a landlord, which comes with significant responsibility. 

Although no two renters are alike, here are some general features that renters look for in a basement apartment:

• High-quality appliances and finishes (think, faucets, tub, shower, sink)
• Higher-than-average ceilings
• Large, bright windows
• Nice lighting 
• Open-concept floorplans
• All-inclusive utilities 
• Proximity to public transit, healthcare, grocery, and amenities

Read our quick guide to Milton Real Estate here to learn more about the best neighbourhoods for your unique needs.

It’s also important to attract the right type of tenant for your property. Consider your location and your ideal tenant and ensure that you are doing everything you can to attract that type of person to your listing. It’s also a good idea to complete credit checks and have your tenants fill out applications before agreeing to rent the apartment. 

Did you know we host first-time buyer webinars every month? Sign up to join our next webinar for FREE here.

When eager new homebuyers begin saving up for a home, it’s easy to fall into the trap of putting on the blinders and fixating on saving up towards one number in particular.

However, buyers can often forget to factor in the additional secondary and tertiary costs it takes to buy a home. For all buyers, new or recurring, these are critically important costs to know about.

So, whether you’re a first-time buyer or have set your sights on moving up, here’s a breakdown of some of the true costs you need to consider when buying a home.

The Deposit

The first expense you should plan for is the deposit. This is a percentage of the total cost of the home that gets paid to the seller or Seller’s agent brokerage right away to essentially “hold” the sale and show the seller you are committed to the purchase. Typically, a deposit is 5-10% of the total purchase price and is required to be paid within 24 hours of the offer.

The deposit also must be made in the form of a certified check, bank draft, wire transfer or Etransfer, which means a homebuyer will need fast access to funds when putting in offers. This money is typically paid to the Seller’s Realtor’s Brokerage company or sometimes to the seller’s lawyer to be held in trust until the home closes.

The higher your deposit, the more committed you may look to sellers and the more desirable your offer comes across. Once the deal is finalized, your deposit money can go towards closing costs or towards your down payment, which brings us to the next cost you need to plan for.

The Down Payment

A down payment is different from a deposit. The down payment is a lump sum payment that goes toward the final purchase of your home. In Canada, there are some rules around down payments. The minimum down payment you can pay is 5% for a home valued at $499,000 or less and 10% for homes valued at $500,000-$999,000. For homes over $1 million, buyers are required to pay at least 20%.

If possible, paying more than the minimum down payment amount is better because it means you will pay your mortgage off sooner, pay less interest, and build equity more quickly.

There’s nothing more fun than fantasizing about what your next home could look like. However, with the help of our Featured Listings page here, you don’t have to daydream quite as hard.

Your Mortgage And Interest Rates

Once your down payment has been accepted, you can deduct that amount from the final sales price of your new home. To account for the rest of the sales price, you’ll need to take out a mortgage.

Mortgages are essentially loans for homes. The total amount of your mortgage depends on a few factors, such as the cost of the home you’d like to buy, the amount of your down payment, what you qualify for based on your annual income, what your monthly expenses are, and your employment history.

Generally speaking, it’s either banks or private mortgage brokers who grant you a mortgage. Whoever you secure your mortgage from, you’ll have agreed on the total amount of your loan and the structure of how you’ll pay it back. In most cases, it’s in the form of a monthly payment to your lender, which will include an interest rate.

This means that if you’ve agreed to put down $2,000 per month towards your home, for example, this fee, plus whatever your mortgage interest rates are, will go to your lender.

What About Mortgage Insurance?

If you are unable to pay the minimum down payment for your purchase, you may still be able to get a mortgage, however, you will be required to purchase mortgage insurance

Mortgage insurance is an added cost that protects the lender since the lender is typically taking on more risk with a lower down payment.

Are you planning on becoming a first-time homebuyer? Ensure you’re well-informed about everything you need to know about your upcoming purchase by reading these related posts:

• 5 First-Time Home Buyer Mistakes To Avoid
• First-Time Home Buyer Grants in Ontario
• Our Top 8 First-Time Buyer FAQs

Land Transfer Tax

The province of Ontario requires homebuyers to pay them an additional fee called the Land Transfer Tax. Essentially, this reflects the provincial government’s cost of permitting you to transfer the title of property between their jurisdiction.

While each province has its own set of Land Transfer Tax rates, the amount you have to pay increases depending on the cost of your new home. The more expensive your new home, the higher the percentage of its value you have to pay in Land Transfer Tax.

In Ontario, the set of Land Transfer Tax rates ranges from 0.5% to up to 2.5% of your home’s value. However, if you’re buying a home in the Greater Toronto Area, the City of Toronto requires buyers to pay an additional municipal Land Transfer Tax alongside the provincial tax.

The good news for first-time homebuyers is that you may be eligible to have all or part of this one-time fee refunded. Eligibility for this refund requires buyers to qualify based on these criteria:

• The buyer must be a Canadian citizen or permanent resident of Canada
• The buyer must be older than 18 years
• The buyer must occupy the home within nine months of purchase
• The buyer cannot have previously owned a home anywhere in the world
• The buyer’s spouse cannot have owned a home while being your spouse

If that applies to you, then you can apply for a refund of the full amount of your Land Transfer Tax or up to a maximum of $4,000.

Lawyers’ Fees

In order for both the buying and selling parties to ensure they’re conducting a legitimate and viable transaction, it’s a real estate lawyers’ duty to review and approve all of the necessary paperwork and legal documents that are included in a transaction.

While both the buying and selling parties hire their own respective lawyers, both legal representatives work together to ensure the real estate transaction is completed smoothly and no contractual or legal details are overlooked.

As you might imagine, there are a lot of formalities and details that go into a real estate transaction, which is why it’s crucial you hire a dedicated real estate lawyer who has experience facilitating these types of deals. As with all lawyers, though, their services come with a fee, which you’ll need to factor into your overall budget as a homebuyer.

Whether you’ve already got an idea of who you’d like to hire or need help finding a legal representative, we work with a set of highly respected and experienced real estate-specific lawyers that we’re always prepared to recommend to our clients should they need it.

There are no ifs, ands, or buts about it — the safest way to buy a new home is through the help of a knowledgeable and experienced local Realtor®. Learn more about what we do, how we help, and how you can find the Realtor® that’s right for you here:

• How To Hire a Real Estate Agent As a Buyer
• Why You Should Work With a Realtor®
• 8 Steps to Finding the Right Real Estate Agent

Your Homeowners’ Insurance

Homeowners’ insurance is a form of property insurance that protects you, the homeowner, from any damages to you or your property once you own your new home. It’s also a requirement to get a mortgage.

In paying a monthly fee to a homeowners’ insurance provider, you are in essence paying for peace of mind. If any damages were to occur to you or your new home, your insurance provider would provide you with funds (up to a certain number) to pay for the cost of fixing the damages.

Although all insurance plans and providers are different, most homeowners’ insurance policies generally cover the costs of things like interior damage, exterior damage, the loss or damage of personal assets or possessions, and any personal injury that occurs on your property.

Interested in learning more about how we can help you make your upcoming home purchase the best buy of your life? Read all about our buying process and how we’ve helped buyers just like you find their dream homes the first time here:

• How We Help Buyers
• Our Buyers’ Guide

Common Mistakes Made By First-Time Buyers

There’s nothing quite like buying a home for the first time. It’s an almost indescribable excitement, joy, and pride that you’ll feel when you set foot in a place that’s truly your own. Of course, there are a few steps you’ll have to take before you can get there—and on the journey, there are plenty of opportunities to make mistakes. Fortunately, knowing what not to do can help ensure that the process is smooth and successful.

If you’re purchasing a home for the first time, here are five mistakes you should avoid…

1) Forgoing pre-approval

One of the biggest missteps many home buyers make is forgoing pre-approval. Taking this first step towards securing a mortgage is simple—and the benefits it can provide are well worth the effort.

During the process, a lender will look closely at your finances to determine how much they’ll likely offer you. While pre-approval isn’t an absolute guarantee that you’ll be fully approved, it is enough to show most sellers you’re a credible buyer who’s ready to make a home purchase!

2) Being unrealistic

You deserve to find your dream home. We’re talking about a place where you can imagine spending some of the happiest moments of your life. A living space like that should just feel right—but it won’t be absolutely perfect.

The truth is, flawless homes don’t exist. Unfortunately, some buyers don’t know that until it’s too late. They pass over beautiful properties capable of meeting their needs because they’re waiting for absolute perfection. Your best bet is to look for a place that checks all of your most important boxes, while giving you that “at home” feeling.

3) Overlooking serious flaws

Some features are easy to fall in love with, like an incredible layout or beautiful architectural details. While it makes sense to factor these “pros” into your purchase decision, it’s not a good idea to ignore any major issues a home might have because of them.

From mould growth to a shoddy foundation, some potential problems deserve your attention. No matter how much you adore a home, make sure you investigate any suspected red flags.

4) Not protecting yourself

Purchasing a home isn’t something you do every day, which is why most buyers don’t know what their due diligence should entail. In most circumstances, it will include a thorough inspection—and possibly the right set of conditions added to your purchase agreement.

In the simplest terms, a home-buying condition is a requirement that must be fulfilled for your purchase to be finalized. For example, a financing condition states that you don’t have to complete your transaction if your mortgage falls through. Your agent can help you take steps like this to reduce the potential risk associated with your purchase.

5) Underestimating costs

A home is the biggest investment most buyers will ever make. Given the price tag involved, it’s not surprising that many forget to factor in (comparatively) smaller expenses. The problem is, they have a way of adding up.

To pave the way for a smooth purchase, leave plenty of room in your budget for ongoing homeownership expenses. You should also make sure you understand the closing costs involved—such as legal fees and land transfer tax.

Buying a home for the first time may seem daunting, and it’s natural to worry about making mistakes. The good news is, an experienced agent can provide the guidance you need to make a smooth, low-stress, and all-around successful purchase.

Are ready to start the search for your first home? Reach out today to get started!