How to Finance Your First Home in Canada?

Canada; the country of famous landmarks, incredible culture, rich historical background, scrumptious food and wondrous exploration sites is topping the list of home buyers today. Without losing its touch with the environment, Canada has managed to create highly modern and advanced developments.

Canada not only boasts of spectacular vacation spots but also is renowned for being one of the safest countries in the world, has a thriving economy, offers excellent educational opportunities, has an expanding job market and so on. The perfect blend of nature and infrastructure that Canada offers is inviting crowds from all over the world.

How to Finance Your First Home in Canada?

If you are here; you must be a part of these or certainly must’ve given a thought to moving to Canada.

Buying a house in Canada might be intimidating not only for novices but also for experts due to the highly competitive, hot-selling market and the great number of options available at hand.

Canada offers you several alternatives when it comes to the type of home you wish to buy. For instance, condos, houses, duplexes, etc. There are numerous houses on a listing day in and day out. These are all being sold off within a week or a maximum of 25 days.

When buying a house, there are several things to consider like location, proximity to workplace, educational institution or other prime areas, commute options, safety, neighbourhood and so on. However, one aspect that supersedes every other aspect is the budget. Finance is the preliminary thing to consider when buying a home.

Before you start a property portfolio, let’s dive in and get an understanding of how you can finance your first home in Canada! 

Figure Out What You Can Afford

Once you figure out what you can afford, it paves the way for further financial ease. Therefore, primarily determine what your budget is and how much mortgage you are liable to. The home price in Canada ranges between $198,000 and $1,036,000. The price is dictated by the location you choose.

Additionally, other factors that contribute to the price are the age of the house, area, type of house, condition of the house and so on. Figuring out what you can afford will help you set a realistic price thereby facilitating a balance between homeownership and lifestyle needs.

Gather the Amount for the Down Payment

With high competition, you need to stand out as a buyer to the seller. Today, down payments are becoming quite the trend and sellers are preferring people who have the capacity to render a down payment since it ensures that the buyer won’t back out of the deal at the last moment.

It instils greater confidence in the seller about the buyer’s interest and authenticity. So, keep some amount ready at hand so you can render a down payment and secure the house you want before any other buyer does so.

Get Acquainted with the Mortgage Options Available

Most buyers rely on mortgages for buying a house. Mortgage comes in a variety today and it is necessary that you choose the best one that suits your needs. A few examples of available mortgage options are open, closed, conventional, convertible, reverse and so on. Each offers different premiums and follows different terms.

Get a Pre-approval

Pre-approved loans give an edge to the buyers to stand tall amongst the competition. A pre-approved loan is an indicator that you are eligible and have all the necessary documents. 

Especially, if there are bidding wars for your chosen house, having a pre-approved mortgage will get the ball in your court. The seller will be more inclined to sell their house to you as banks have a real rigid approval process and if you have gone through this, it depicts your authenticity. 

A pre-approval will help you shortlist the homes fitting your budget, allow you to negotiate better and also will give you a fair idea of the interest rate, thereby allowing you to pre-plan your monthly expenditure.

Find a Proficient Realtor

A real estate brokerage firm or broker can be very helpful throughout the home buying process. They can help you look for the right houses that fit your budget and other requirements. They can also sit with you to plan the distribution of your finances and assist you with their expertise to manage them impeccably. They can also recommend the right mortgage plan for you and find you an authentic and reliable lender using their connections. 

Inquire About the First-Time Home Buyer Incentive

The Canadian government offers an incentive of about 5%-10% of the home price as a helping hand to first-time home buyers. This can be used to fulfil your down payment needs and can minimise your expenses. Therefore, enquire about the first-time home buyer incentive and leverage its benefits. The cherry on top is that this has no interest too!

All in all; even though gathering funds for your house may sound gruelling; with the right support and guidance, it won’t be that complicated. Once you run through your financial condition and plan out with the professionals; you can sit back and relax as they do the rest for you!

Originally posted 2022-09-12 15:52:00.