Looking to buy a house in Canada? Whether you’re planning to shift from a rented apartment to buying a house or if you’re shifting to Canada from another country and then looking for a house, we have just the right sort of things to help you get started. House hunting can be quite taxing given the multiple things you have to consider such as locality, neighborhood, easy commute to workplace, schools nearby for kids and transport options. And these are just the basics. Then comes the financial issues and formalities that need to be sorted out so all of this does take quite some time and a lot of mental stress.
But not to worry, we are here to give you a few very useful tips on how you can buy a house in Canada and what are the prerequisites for the same. So let us begin with a few things you need to consider first.
- Are you ready to buy a house and what can you afford?
Buying a house is a huge deal. It is a major milestone in one’s life and before you even begin thinking about it, this is the most basic you need to ask yourself, ‘Are you ready for it?’ You need to have your finances in order and plan ahead of time to make such a huge investment. The next question is, ‘what can you afford?’ Get your financial statements ready so you have a clear budget in mind. Then you can get a fair idea about the houses that will fit the budget.
- Getting a loan
If your budget is not enough then you might have to consider a home loan and/or a mortgage to buy a house in Canada. For this reason you will need to get your documents ready and sort out the paperwork.
- Are you ready to settle down?
Finally, the most important question is, ‘are you at the stage in life where you wish to settle down?’ Buying a house is a sign of getting some stability and permanency in life. Introspect to understand if there are no significant changes that you’d be making, only then should you proceed.
Steps to buy a house
When you have considered all of the above things, now is the time to start with the actual process.
- Down payment
In Canada there is a rule for real estate which states that 5% of the total payment has to be paid in the beginning as the down payment. This is for houses that cost between $500,000 and $1 million. For houses that cost more than $1 million, the minimum down payment is 20%. So you need to have that sort of money on you.
- Prepare your documents
For a mortgage you will have to keep your documents ready. Your current employment documents, tax statements, previous loans and debts remaining, saving, investments and liquid assets are to be specified. If you are using the Home Buyer’s Plan, then there are documents to be submitted specified by it.
- Rebates and grants
There are many options for obtaining rebates. The most popular one is the Home Buyer’s Plan. Others include GST/HST New Housing Rebate, Toronto’s land transfer tax rebate, etc. Check those out as well.
- Hire an estate agent
Some people prefer house hunting on their own to avoid interference and brokerage, but in reality hiring an agent makes your job much easier. They know a lot about the market rates and can find you homes that tick all your criteria. So that is one less thing for you to worry about. Do not forget to compare Canadian mortgages before finalizing.
- House Hunting
And finally the most exciting part. Start looking at your prospective homes. Shortlist your favorite ones and check out the neighboring areas. Talk to the neighbors and then finalize. Make a list of things you absolutely want and those that are a deal-breaker to make the choice easier. Also be prepared to face some serious competition in the market for good homes so you’ll have to make the decision quickly once you like a home.
In conclusion, you already must be exhausted simply reading about all this but it really get easy with a bunch of good estate agents, mortgage brokers, etc. to help. The main thing is to move ahead responsibly, realizing that it is probably the biggest investment of your life so far.