Having your own house is a lifelong dream that takes years of hard work to accomplish.
And when the time finally comes and you can afford your dream house, it’s natural to be overwhelmed by emotions.
However, you should not let these emotions impact your rational approach.
Buying a house is a big commitment and requires a huge investment and a decision this important should not be taken in a hurry.
You need to consider a lot of things if you’re planning to buy a house in Ontario.
Starting from all the legalities to the actual money investment, an awful lot goes into the process.
Hence, we have prepared this detailed guide on the four things you need to take care of before buying a house in Ontario.
Things to Consider When Buying a House in Ontario
Here is a list of things you need to consider before buying a house in Ontario:
1. Get a Good Realtor
If you’re not a native then getting a good realtor is a wise choice.
They will know about the best properties in the locality and help you with the entire procedure.
Most houses in Canada are sold through realtors. Both the seller and the buyer have their own realtors.
The best part is that if the seller has hired a realtor, he is liable to pay the commission for both his and your realtor.
2. Save Extra for the Closing Cost
We all know that the deposit amount for buying properties is high.
However, that’s not the only payment you have to consider.
Sometimes, the closing cost requires a little more than the deposit amount (approximately 3 to 5% more).
Hence, while saving and procuring the deposit money, consider this extra cost as well.
You can also opt to buy a house without going for the traditional methods of making a down payment.
If this is something you are interested in exploring, learn more here about it.
3. Mortgage Loans in Canada
If you are buying a house, you might probably take out a mortgage loan.
In Canada, the minimum down payment that you have to make is 5%.
However, people generally tend to make a down payment of at least 20% or more.
Otherwise, you will have to get the mortgage default insurance from a private insurance provider or the CMHC (Canadian Mortgage and Housing Corporation)
The minimum down payment amount also depends on your nationality. If you are not a native, you will have to make a down payment of 35%.
Moreover, if you do not already have a property in mind, it is also wise to get pre-approved.
In this case, you submit your details to a loan provider.
Next, they will let you know about the maximum amount and interest they can lend you. This helps in streamlining your property hunt
4. Understand All the Costs That Are Involved in Buying a New Property
When you buy a new property, remember that it is not just the property that you are paying for.
Several other expenses add to your overall cost. Here is a list of expenses that you can expect when buying a property in Ontario:
- Cost of the property itself
- Charges of the realtor
- Tax on land or property transfer
- Legal fees
- Home inspection fees
- Home Insurance expenses
- GST( goods and service tax). It is important to check if this tax is already included in the quoted price or not.
- Non-resident speculation tax if you are not a resident of Ontario and are buying a house in Ontario’s Greater Golden Horseshoe Region.
- Cost of transferring money overseas in case you’re not a Canadian citizen.
The Process of Finding a House in Ontario
If you have just moved to Ontario and are buying your first house, you might need a little help.
So, here is a detailed guide on how you can find the perfect house in Ontario.
1. Finding a Good Realtor
This is especially important if you are a foreigner.
A good realtor will have plenty of experience in this field and know the best properties in your preferred locality.
In addition to finding a suitable property, realtors also help understand the legal procedure and negotiating prices.
Pro Tip: Ensure that your realtor is registered with the real estate council or any governing body of equal authority.
2. Going on Property Hunt
Property hunts cannot be simple. It does take a lot of legwork to find the ideal house for you and your family.
However, if you have a qualified realtor, he can help you streamline the search in accordance with your requirements and preferences.
This will filter out many useless properties.
3. Making An Offer
Once you’ve found your dream property, it’s time for you to make an offer. The offer should clearly state the amount you are willing to pay.
It will also contain other information like the validity of the offer as well as your financial details.
Let your realtor help you with this.
Qualified realtors can also help to negotiate the price with the owner and stand out from the other potential buyers.
4. Authenticating the Property Transfer With a Contract
Once your offer is accepted, you proceed to get the contract drawn for transferring the property.
If you want, you can also involve a real estate lawyer in this stage.
Real estate lawyers in Ontario are generally involved in later stages only.
Read through all the terms and conditions properly to know what you are getting yourself into.
Once you are satisfied with the contract, seal the deal, and own your dream house.
Buying a new house is never a cakewalk. But following the right path surely simplifies the process and removes unnecessary hurdles.
Also, make sure you weigh all the potential risks before each step.
A huge decision like this should not be taken in haste or without considering all the possibilities, whether it’s a risk or a benefit.