For First Time Home Buyers, Ontario Canada
Buying a new home?
Being a first time home buyer doesn’t have to be hard.
Buying your first home can be a very exciting time! With tons of things to know and learn however, it can seem overwhelming. Which is why The Team at Real Value Home is doing our very best to simplify the whole process. What you want to know, what you need to know, and perhaps a few things you’ve never even considered.
Neighborhood and Type of House?
What neighborhood you’re interested in? Single detached or townhome? Square footage and upgrade packages? If you’ve never purchased a home before these are things you may never even know you had to think about.
Where do you want to live?
It may sound like a simple question but it seems to be the most obvious: where do you want to live? Consider the city’s convenience versus more relaxed rural settings. Suburbs versus downtown. As a rule, considering the needs of your family is the best way to decide where to live. In fact, a recent study by found that 90% of first-time buyers settled on the neighborhood where they wanted to live before choosing the actual home they wanted to buy.
What type of home to buy?
Once you know where you want to live you need to decide what you want to live in. Detached, semi-detached, townhome, condo? Semi-detached homes or townhomes are usually less expensive than comparably sized detached single family dwelling. If having neighbors close to you are OK then this is perfect. If you prefer a little more space to call your own however perhaps a detached home would be more to your liking. Condos are great if you’re looking for extensive fitness and social amenities but remember, you pay for them in the initial cost and in the monthly condo fees, whether you use them or not.
Figuring out what you can afford
The easiest way is to figure out what you can afford is by examining your income, expenses, investments, savings and debt. When you do that, try to keep in mind inevitable expenses such as a wedding, new car, etc., etc.) And always keep a little extra for items such as legal fees, real estate agent fees, land transfer fees, and mortgage insurance to name but a few.
New home RRSP Plan
This program simply allows prospective homebuyers to borrow money from their own RRSP’s to buy a home. Similar to a loan this money must be paid back within a specified time frame. You must be an RRSP holder, a resident of Canada and a first-time homebuyer to qualify. The plan allows you to withdraw up to $20,000 tax free from your RRSP to purchase your home, provided it is paid back within 15 years. If these funds are going to be used for a down payment they must have been deposited at least 90 days before you sign your agreement of purchase and sale. Both you and your spouse may withdraw up to $20,000 for a total of $40,000. To apply, talk to your bank or contact:
Canada Customs and Revenue Agency
1-800-959-8281, New home RRSP Plan
CMHC (mortgage insurance)
Many first-time buyers face unique financial challenges along the way. We know saving up for a down payment in these expensive times can be difficult, and every penny counts. Luckily there are a variety of programs available from both the provincial and federal governments to help simplify and make the process much easier.
For more info, speak to your bank.
Home land transfer tax refund
This program applies to newly-built or Re sale (Old) homes and gives eligible purchasers a refund of their land transfer tax based on the purchase price of their home. To be eligible, you and your spouse must be first-time home buyers.
The Province of Ontario in Canada has proposed to double the maximum refund better known as rebate for first-time homebuyers from $2,000 to $4,000, effective January 1, 2017.
For more information, ask at your The Team at Real Value Home Sales Office or contact the Ontario Ministry of Finance 1-800-263-7965
We at Real Value Home are here to help
Whatever home you choose, whichever route you take, buying a new home is one of the most exciting and dynamic experiences of your life. So have fun and remember if you have any questions, the experts Gyanesh and his team at Real Value Home are just a phone call away!