One of the most daunting ordeals in life is when we decide to purchase our first house. While this does seem like an exciting experience, chances are, you can get gravely disoriented and overwhelmed from the sheer amount of deals and paperwork associated with it. However, if the necessary steps are properly taken, the rewards are worth it! Having a place of your own that you can call home is a priceless feeling – especially if it’s in Canada.
Canada is arguably one of the best countries in the entire world for acquiring real estate and living a quality life. In fact, the Quality of Life Index placed the country at the topmost rank for living quality, based on a number of factors like environment, job opportunities, economy, and so on.
Buying a house is a major decision that must take a number of factors into consideration. Ignorance on such matters could land you in a world of inconvenience. Hence, this article comprehensively focuses on the steps that you should follow for purchasing your first house in Canada.
Determining the Location and Type of Property
Before you dive into the intricacies of acquisition, make sure you decide on an ideal location, as well as the type of house best suited for your budget and preferences. For rapidly appraising the value of any specific property in a particular location, you can check out Metrowide Appraisal. They provide highly informative reports on any property in Canada, making it a great repository for potential homeowners.
Make sure you know exactly what you are looking for in a home and do not deviate from it unless absolutely necessary. You might come across a variety of advice and suggestions, but it is in your best interest to stick to your preferences. Some people purchase property keeping expansions in mind, while others spend their life savings on it. Make a checklist and do not let yourself be satisfied unless you can tick all the boxes! But also be careful not to jump on a deal when it ticks everything but your budget; no matter how amazing it may be, you must be able to afford it.
Different locations have their own set of rules and regulations for purchasing a property. Make sure you take those into account as well. Buying a house is a permanent investment; something that you, quite possibly, have to live with for the rest of your life. The location of your property influences almost everything, ranging from your professional career to your retirement plan.
Getting Ready the Down Payment
There are a lot of costs associated with house purchases. However, potential homeowners are attracted by the low amount of down payment needed compared to the full price of the house. This basically is the money you need to pay upfront in order to confirm and lock the property down. While down payments certainly make life easier and essentially confirms the property sale in your name, there are further costs that you need to be aware of.
The down payment rates vary between different properties. Do be informed that the higher the amount you pay, the greater the chances of obtaining a mortgage. We discuss mortgages in more detail later in this article. Furthermore, there is a mandatory insurance package offered by the Canada Mortgage and Housing Corporation, or CMHC, that you must attain after confirming your mortgage. This is an extra cost most homeowners dread. Paying hefty sums of money as a down payment will save you from this insurance scheme, and prepare you better for upcoming expenses.
Typical down payment rates in Canada range between 5% to 20%, but are highly subjective to a number of factors, like the location and house type. Non-residents have to pay at least 35%! Also, make sure you have saved up an additional 5% of the property’s cost to cover any unforeseen expenses during the entire procedure. Deal closing costs are also not very cheap and have to be taken into consideration prior to choosing a property to buy.
Obtaining the Mortgage
There are specific steps that you must follow to deal with the most difficult and crucial phase of the home acquisition: obtaining the mortgage. Start looking for mortgage pre-approvals from the get-go. This will provide massive security to your bids and ensure that you eventually do end up with the property you targeted to buy.
Interest rates may fluctuate without prior notice. Locking down a potential investor can save you from sudden spikes in rates as they tend to cover the added expenses in such circumstances. Mortgage brokers can help you throughout the process by dealing with all the necessary paperwork. They can give you information regarding the best existing rates of the mortgage market and suggest you the best method to obtain them. Make sure you establish your hold on the target property by ensuring all your efforts are rock-solid in this stage.
Receiving Help From a Real Estate Agent
While you do have the freedom of progressing solo through the procedures of home acquisition in Canada, we suggest receiving help from realtors. They are specialized professionals who will deal with every step on your behalf. Their experience in this field is invaluable as you are potentially a first-time homeowner while they do it as a living.
Established realtors have authority over certain localities and properties, and might be aware of hidden clauses or problems associated with specific houses that you might not be able to identify on your own. They complete all the paperwork and only reach out when particular decisions or signatures are required from your end. All in all, it is always the ideal choice to involve realtors in your bid to acquire the property of your dreams!
Securing the Deal
At this point, all major aspects of the deal are finalized on your end. This is when all the parties sit and discuss the requirements of deal closure. This includes you, the realtor, the lender, the mortgage expert, and your lawyer. This phase is not complex as the parties discuss matters such as insurance and utility costs that generally do not cause any last-minute discrepancies to the deal. If all looks good, sign the final few papers to close the deal. As easy as that, you will be the proud owner of a house in Canada!
Canada is, evidently, one of the best countries for purchasing real estate. The mass availability of terrific properties to choose from, the booming economy, and the overall simplicity of the acquisition procedure involved, ensures that Canada features in the top ranks. There is a multitude of features that you need to consider before placing a bid. Make sure you have a comprehensive understanding of all these aspects before going all out for the property you always dreamed of!