Taking the first step to purchasing your first home can seem overwhelming and you may not know where to start. Not to worry ...we will be there every step of the way and we will walk you through everything to make it an easy, stress-free process. Afterall, we were in your shoes only 10 years ago and have built all that we have today because of real estate and we are more than happy to pass down our knowledge and experience to our First Time Home-Buyers to set them on the right path, the first step is an important one. Below is the process step by step, it is not so bad and any questions just ask!
MWR | First Time Home Buyers Rebate
To help our MWR First Time Home-Buyers, we cover the cost of their Building inspection up to $350 and on closing we give our First Time Home-Buyers $500 cash back to help out with some expenses to help get settled in their new home. *Valid for MWR Realty Team clients only.
**MWR covers the cost of First Time Home Buyers Building inspection up to $350*
**MWR rebates clients $500 for moving expenses on closing
MWR | First Time Home Buyer Realtor Cost
As a buyer, you do not pay any commissions. Essentially, purchasing a home is free using a relator.The Realtor gets paid commissions buy the seller of the property you purchase.
First-Time Home Buyer Grants
(credit $750 )
As a first-time homebuyer, you’ll want to take advantage of various grants offered by various levels of government that will help make purchasing a home more affordable. Here are the key grants available to you if you’re buying a home for the first time:
The Home Buyers' Tax Credit, at current taxation rates, works out to a rebate of $750 for all first-time buyers. After you buy your first home, the credit must be claimed within the year of purchase and it is non-refundable.
In addition, the home you purchase must be a 'qualified' home, described in more detail below. If you are purchasing a home with a spouse, partner or friend, the combined claim cannot exceed $750.To receive your $750 claim, you must include it with your personal tax return under line 369.2
You must have the intention of residing in the home within one year of purchase. To claim the tax credit, it must be registered in your name or your spouse’s name. In addition, you can’t have owned a home within the prior four years or have lived in a home owned by your spouse within that same timeframe. Finally, you must have documentation of your purchase.
RRSP First Time Home Buyers Plan
(Tax Free Money)
One great source of funding for your mortgage down payment is a Registered Retirement Savings Plan (RRSP). The Canadian government's Home Buyers' Plan (HBP) allows first time home buyers to borrow up to $25,000 from your RRSP for a down payment, tax-free. If you're purchasing with someone who is also a first-time homebuyer, you can both access $25,000 from your RRSP for a combined total of $50,000. However, since the HBP is considered a loan, it must be repaid within 15 years.
First Time Home Buyers Land Transfer Tax Rebate
(credit up to $4,000)
First-time homebuyers in Ontario can qualify for a rebate equal to the full amount of their land transfer tax, up to a maximum of $4,000.
To qualify for the Ontario Land Transfer Tax Refund for First-Time Homebuyers, you must meet the following criteria:
- You must be a Canadian citizen or permanent resident of Canada,
- You must be 18 years of age or older,
- You must live in the home within 9 months of purchasing it,
- You cannot have owned a home before, and
- If you have a spouse, they cannot have owned a home during the time they have been your spouse.
Based on the Ontario land transfer tax rates, the rebate will cover the full tax amount up to a maximum home purchase price of $368,333. For homes with purchase prices over $368,333, homebuyers will qualify for the maximum rebate, but will still owe the remainder of their land transfer tax. If you are buying your home with your spouse, but only one of you qualifies for this rebate, you can still receive 50% of the rebate.
Tip: You have to apply within 18 months of the date of transfer to qualify for this rebate.
Who gets you the refund?
If you qualify, your real estate lawyer will help you file the necessary paperwork. You can either file for your land transfer tax rebate electronically, or download the Ontario Land Transfer Tax Refund Affidavit for First-Time Purchasers of Eligible Homes here. For more information, visit the Land Transfer Tax Refund for First-Time Homebuyers website.
See how much you will get back with the MWR LTT calculator:
CLICK HERE * Make sure to click First Time Home Buyer
What Is The Deposit For?
A deposit is always required once your offer is accepted. This amount varies with each house. You do not always have to give the deposit they are asking. The deposit is held in the seller’s Brokers trust account and is returned to the buyer if the deal does not work out.
When the time comes to close on your home, the money from your deposit will be credited towards the purchase price and becomes part of your down payment. The down payment is the portion of the purchase price that will not be financed through a mortgage — it's paid out of your pocket
. **Deposits can be either presented with your offer or Provided 24 hours after finalizing the agreement.
What is the purpose of the deposit in a real estate transaction?
1) To act as consideration for the deal
2) To bind the buyer to the contract.
3) Is part of your down payment
Why do I need a Lawyer ?
A lawyer will do a series of searches and generate documents when processing a home sale transaction. This includes: a title search (which verifies that a seller legally owns the property and searches utility and tax departments to make sure there are no liens against the property), registering the title deed and mortgage, where applicable septic tank and potable water searches.
On top of these fees there are also disbursement costs, fax/phone and mail costs and other costs of doing business. While title insurance is not mandatory it is a very good idea. It protects you against mortgage fraud, identity theft and forgery and can protect you against fees and costs that were not caught in the searches your lawyer conducted prior to the sale (and this happens!).
What is CMHC ?
(Get approved with as little as 5% down)
What is CMHC?
Mortgage default insurance—often known as CMHC Insurance—may seem like a strange concept, but it’s relatively straightforward. If you have a down payment of less than 20% of the home’s value, you must purchase mortgage default insurance. But this doesn’t act as insurance for you. Rather, it protects your lender in case you don’t make your mortgage payments. It’s designed to make financial institutions comfortable with lending to individuals who don’t have a large down payment.
How is It Calculated?
Mortgage insurance is calculated as a percentage of the value of the mortgage amount. If your down payment is between 5% to 9.99%, the mortgage insurance will represent 3.6% of the mortgage amount. For down payments of 10% to 14.99%, the mortgage insurance will cost 2.40%. And for down payments of 15% to 19.99%, mortgage insurance costs 1.80%.
CMHC insurance isn’t available for homes with a purchase price of more than $1 million. As a result, anyone buying a house in excess of this amount must have at least 20% as a down payment on their purchase.
In Canada, you must put down a minimum of 5% as a down payment on your home. However, this only applies to homes with a purchase price of less than $500,000. It’s important to note that if you’re buying a home costing between $500,000 and $1 million, the federal government recently increased how much you must place as a down payment. With the new rules, you have to put down 5% for the first $500,000 but 10% on the amount between $500,000 and $1 million.
See how much you will pay for CHMC based on your down payment and mortgage : CLICK HERE
information compliments of ratehub.ca
NOW THAT YOU KNOW THE BASICS. NOW THE FUN PART FIND A HOUSE !
1. Find a Realtor
Find a Realtor to assist you. Ask questions what experience do they have ? What was is their personal real estate journey, as this will be a direct reflection of yours. Have the worked with may first time home buyers?
2. Get a Pre-Approval from your Mortgage Agent
A mortgage pre-qualification can be useful as an estimate of how much you can afford to spend on your home, but a pre-approval is much more valuable because this means the lender has checked your credit and verified your documentation to approve a specific loan amount so you know what price range you will be looking at.
3. House Hunting
House hunting can be a lengthy process. Think about your immediate needs, future needs and lifestyle. When you look at homes, you may be tempted to concentrate on the home, but don’t forget to look at the whole property: the lot, the neighbourhood, the surroundings. How close is the home to facilities and services important to you? You can always change the house NOT the location. You may end up seeing multiple homes in one day. This CHECK LIST will help you compare and keep track of the homes you visited and help you remember the features you did or didn’t like about the home.
4. Make an Offer
You found a home you really like ! Your agent presents the offer to the seller’s agent. This document includes the price, conditions, deposit and closing date. The seller either accepts, rejects or counters the offer (also called “signing back” the offer). Offers are usually conditional on the below, but can also include other items that your agent would recommend looking into before jumping all the way in.
Hiring an inspector is voluntary, but it’s a smart idea for resale homes. You can choose to make your offer to purchase the home conditional on the outcome of your inspection. If your inspection reveals major problems, you can negotiate those repairs with the seller before your deal closes, or legally withdraw your offer. * WE COVER THIS COST FOR FIRST TIME HOME BUYERS (up to $350) payable at closing
Once your offer is accepted, contact your Mortgage Specialist to get you officially approved by a lender for that particular property. Sometimes lenders will want to come in and appraise the house as well. Some lenders will cover the cost of the appraisal. The average cost of the appraisal is $200 to $300. This step will get you a written commitment which guarantees the lender will finance your purchase, assuming all the information you provided is true.
Status Certificate ( CONDOS )
To find out the financial standing of the condominium and if there are any upcoming special assessments.
Confirmation of Insurance
It is always a good idea to get confirmation that your insurance company will insure your new property and confirm your new rate. Some older properties may have tougher times obtaining insurance due to things like; knob and tube electricity or fuse panels, distance from emergency services, valid permits for additions, types of materials used in the manufacturing of the house etc.
4. Waiving your Conditions
You have usually 5 business days to fulfill your conditions. Once they are fulfilled to your satisfaction, you would then sign a "Notice of Fullfillment" statting you have fullfilled your conditions and your deal is now FIRM.
CONGRATULATIONS YOU JUST BOUGHT YOUR FIRST HOME. THAT WAS NOT SO BAD !
I PURCHASED A HOME NOW WHAT ?
1. Set up Utilities (Gas, Hydro, Cable, Water Heater Rental)
We will get the details as to what company the property is currently with. Then you will call the utility companies of your new property to make sure they have been transferred to your name and any other details. Some may require deposits.
2. Set up Home Insurance
Arrange Home insurance on your new property.
3. Signing or the Mortgage papers and Lawyer
About 1 week before closing you will ...
Mortgage- You will go and sign final papers for the mortgage agent.
Lawyer -Your Lawyer will more then likely ask you at this time to bring a bank draft for the remaining balance for the down payment, the lawyer handles all the money transferring in a Real Estate Transaction.
4. Closing Day
This is the day you legally get possession of the house. Your lawyer completes the paperwork, payments are finalized, and you receive the deed and the keys. Usually you will not be allowed to enter your new home till 6:00pm the day of closing.