First Time Home Buyers: Getting Your Foot In The Door

As a soon-to-be First Time Home Buyer (FTHB) myself, I have quickly come to realize that the journey to homeownership nowadays… is not so quick. Young adults today are getting into the real estate market at a much slower pace and of course, there is no ‘right’ age to buy a home, it simply depends on when you can afford it based on your own circumstances. With patience, research and determination, owning a place of your own is achievable. It can be one of the best financial investments you will make. “Every mortgage payment you make is like adding a brick to your own financial future”.

Get the right help

You definitely don’t want to go through this alone. Friends and family might have advice, but working with a pro makes life way easier. And guess what? You usually don’t have to pay your Realtor® – the Seller covers that. So, why not get all the perks without the extra cost? With a great team (that’s us!), your home-buying journey should be a smooth ride. We have got the experience and know-how to handle any bumps along the way, so you can focus on finding your dream home.

Starting off

If you are just beginning, the first step is getting pre-qualified for a mortgage. Ask your Realtor® to recommend a mortgage broker. They will help you get pre-approved, which is a better estimate of how much you can borrow assuming nothing changes before you close on your new place. While you are at it, try to avoid applying for new credit cards or loans. Getting pre-approved also lets you lock in a rate for 90-120 days, which is a nice bonus!

Make your wish list

Time to dream big! Write down what you absolutely need and what would be “nice” to have in your new home. This will help you move from just thinking about it to actually packing up and moving in.

Down Payments 101

You might have heard that you need the full 20% down payment to buy a home, but that’s not always true! For homes >$500,000 you’ll need just a 5% down payment For homes between $500,000 – $1 million, you’ll need 10% Sometimes, the myth about needing 20% down comes from mortgage insurance, which is a big part of closing costs. But if you do put down 20%, you can avoid this extra cost.

Don’t Forget Closing Costs

Make sure to save about 3-4% of the home’s price for closing costs. Legal fees to check that the title is clear Title insurance to protect against fraud Utility hook-up fees and home maintenance Property insurance, home inspections, and appraisal fees Land transfer taxes, which can’t be included in your mortgage Mortgage insurance if you are putting down less than 20%. You can pay this all at once or monthly.

Government Help

Feeling a bit overwhelmed by all the numbers? Don’t stress! The government offers some great incentives to make buying your first home a bit easier.

Home Buyer’s Plan: Withdraw up to $35,000 from your tax-sheltered investments without penalty, as long as you pay it back within 15 years.

First Home Savings Account: Young Canadians can save up to $8,000 a year tax-free, with a max of $40,000, to put towards their first home. No repayment is required, and your savings can grow!

Land Transfer Tax Rebate: First-time buyers can get an instant rebate of up to $4,000 on land transfer taxes.

First-Time Buyer Tax Credit: You could qualify for a tax credit of up to $1,500 to help with those moving-in expenses.

Buying a home might seem like a lot, but with the right help and some savvy planning, it’s totally doable. Ready to start your journey? We are here to make it easy and exciting!

Julia Martin -Sales Representative

@juliamartin.realestate