Buying your very first home can be an exciting, but also a stressful time. It is after all, a life changing event. Amongst all of the fluctuating emotions, there are a few things that you should be clear on in order to avoid surprises later. So we’ve gathered the following details to help on your home buying journey.
Down Payments and Mortgages
When it comes to mortgages in Canada, there are different options for different circumstances. Although you are not required to have a large down payment, having one under the 20% mark will qualify you differently. If you do plan on purchasing your home with less than a 20% down payment, it’s important to know that upon qualification, you will be offered a high-ratio mortgage. With this type of mortgage, you are able to borrow up to 95% of the purchase price. However, you are required to purchase mortgage insurance generally from Canada Mortgage and Housing Corporation (CMHC) for default protection. The insurance is paid for by the borrower and added to the mortgage amount.
Pros: You can get into your dream house faster.
Cons: You can end up spending more for your home.
In the end, you do what’s best for you. However, it’s important to be aware of these choices and outcomes.
This one seems pretty obvious, but you’d be surprised how many people rush into a new home without taking the time to review the neighborhood in which they are purchasing. It’s important to take all things that are important to you, into consideration. For example, the distance of your new home to your workplace, local schools, major highways, public transportation, etc. In addition, things like the crime or disturbance rates might matter to you and are important to keep in mind.
Closing costs are often overlooked, but keep in mind that they exist and generally range from 1.5% to 7% on top of the cost of your home purchase. Keeping this in mind will help you budget accordingly. These costs are derived from various expenses, from land transfer tax to adjustment costs, to legal fees.
Team Burca Real Estate is committed to providing clients with excellent service. This includes educating clients on their best options when it comes to Real Estate. For more information, contact us today!