Assessing your borrowing capacity: Figure out how much mortgage you can realistically afford. This will depend on your income, debts, and credit score.

Determining your down payment: Aim to save for a down payment, typically between 5% and 20% of the purchase price. A larger down payment reduces your mortgage amount and can lead to better loan terms.

Getting pre-approved for a mortgage:A pre-approval from a lender tells you exactly how much you can borrow and strengthens your offer when you find a house.

The home buying process timeline can vary depending on several factors, but typically it takes anywhere from four weeks to six months.

It’s important to be prepared for the process to take some time, so plan accordingly and manage your expectations.

This is a hot market where there’s a shortage of housingand more potential buyers than homes available. In this scenario:

• Homes typically sell faster, often above asking price.
• Buyers may have fewer homes to choose from and face competition from other buyers.
• Sellers have the upper hand in negotiations and may receive multiple offers.

This is a slower market with a surplus of houses for sale compared to the number of buyers. In this scenario:

• Homes tend to stay on the market longer.
• Buyers have more options and flexibility to negotiate a lower price.
• Sellers may be more motivated to make concessions to attract buyers.

This is an ideal situation where supply and demand are relatively equal. In this scenario:

• Homes sell at a fair market price.
• Buyers and sellers have more balanced negotiating power.
• The market is stable, with neither buyers nor sellers having a significant advantage.

The minimum credit score required for a mortgage in Canada typically falls around 680. However, it’s important to understand some nuances:

Type of Mortgage: This minimum applies to conventional mortgages offered by major lenders. Government-insured mortgages (CMHC, Sagen) may have slightly lower requirements (around 600), but come with additional costs like mortgage default insurance.

Lender Variations: While 680 is a general benchmark, some lenders may have a slightly higher or lower threshold.

Impact of Score: A higher credit score (above 700) is generally better. It can qualify you for more favorable interest rates, saving you money in the long run.

Below 620: Qualifying for a mortgage becomes difficult. Focus on improving your credit score before applying.

620-679: You may qualify for a mortgage with a non-prime lender, but likely at a higher interest rate.

680-724: This is the typical range for qualifying for a conventional mortgage with decent interest rates.

740+: Excellent credit score that qualifies you for the best mortgage rates and loan terms.

The down payment you should make on a home in Canada depends on several factors.

20% down payment: This is ideal, you’ll avoid mortgage loan insurance and get the best interest rates.

5-10% down payment: Possible, but you’ll pay mortgage loan insurance and potentially a higher interest rate.

Ultimately, the best down payment amount depends on your specific circumstances. Consider your overall financial health. It’s wise to have an emergency fund and avoid draining your savings entirely for a down payment. Talk to a mortgage professional to discuss your options and determine what’s most suitable for you.

While the minimum is an option, there are advantages to putting down more:

Reduce Mortgage Amount: A bigger down payment translates to a smaller mortgage loan, lowering your monthly payments and total interest paid over time.

Avoid Mortgage Loan Insurance: If your down payment is less than 20% of the purchase price, you’ll typically be required to purchase mortgage default insurance (CMHC or Sagen), which adds extra cost.

Stronger Offer: A larger down payment makes your offer more attractive to sellers, especially in competitive markets.

Neighborhood: This is a big one! Consider factors like:

• Safety and crime rates
• Quality of schools (if applicable)
• Proximity to amenities (grocery stores, parks, restaurants)
• Noise levels and traffic flow
• Community feel and vibe

Commute: How far is your workplace or school? Consider commute times by car, public transportation, or biking.

Accessibility: Is the location close to highways, airports, or public transportation hubs (if important to you)?

Future plans: Think about how long you plan to stay in the house. Is the location suitable for potential future needs (growing family, aging parents)?

Number of bedrooms and bathrooms: How many do you need now, and how many might you need in the future?

Living space: Consider the overall square footage and how it will accommodate your lifestyle (entertaining, hobbies).

Layout: Is the flow of the house functional for you? Is there a good separation of living areas and bedrooms?

Storage space: Does the house have enough closets, cabinets, or a basement/attic for your needs?

Must-have features: Make a list of features that are essential for you, such as a certain number of parking spaces, a garage, a specific type of flooring, etc.

Nice-to-have features: Think about features that would be desirable but not essential (e.g., fireplace, finished basement, backyard size).

School district: If you have children or plan to, research the quality of the schools in the district.

Energy efficiency: Consider the energy rating of the house and potential cost savings on utilities.

Lot size and outdoor space: Do you need a large yard for entertaining or just a small patio for relaxation?

Unfortunately, there’s no one-size-fits-all answer to how much you should offer on a house. Here are some strategies to help you determine your offer:

Research comparable properties (comps): Look at recently sold houses similar to your target house in the same area. This will give you a good idea of fair market value.

Talk to your real estate agent: They have expertise in the local market and can advise you on a competitive offer price.

Consider contingencies: Your offer might include contingencies, such as a home inspection or financing approval. These can give you some leverage in negotiations.

Remember: The offer process is a negotiation. Be prepared to counteroffer based on the seller’s response.

This gives you time, typically a few days, to have a qualified inspector examine the property for any major defects or potential problems.

Based on the inspection report, you have the option to:

• Negotiate repairs: Request the seller to fix certain issues before you proceed with the purchase.
• Renegotiate the price: The inspection might reveal issues that warrant a lower purchase price.
• Walk away from the deal: If the problems are significant and the seller is unwilling to address them, you can back out of the contract without penalty, as long as the contingency period is still valid.

This protects you if you’re unable to secure a mortgage for the purchase.

It allows you a specific timeframe (usually 30-45 days) to get loan approval.

If your financing falls through within that timeframe, you can cancel the purchase agreement and get your earnest money deposit back (the deposit you put down in good faith).

Closing costs are additional one-time fees you’ll incur on top of the purchase price of a home when finalizing the purchase. In Canada, these costs can vary depending on the property and location, but typically range between 1.5% and 4% of the purchase price.

Land Transfer Tax: This is the biggest chunk of closing costs, levied by the provincial government. The exact amount varies by province and purchase price.

Lawyer Fees: You’ll need a lawyer to review the purchase agreement, conduct title searches, and ensure a smooth closing process.

Disbursements: These are various minor fees paid to different parties involved in the transaction, such as title insurance, registration fees, and property tax adjustments.

Home Inspection Fee: While not technically a closing cost (you might pay this earlier in the process), it’s a necessary expense to consider when budgeting for the home buying process.

Key Steps:

• Review Documents: You’ll be presented with a final set of documents to review carefully. These will include the purchase agreement, mortgage documents, title documents, and closing disclosure.
• Ask Questions: Don’t hesitate to ask your lawyer or agent if you have any questions about the documents before signing.
• Signing Ceremony: Once everything is understood and agreed upon, all parties will sign the necessary documents.
• Funds Transfer: The buyer’s funds (down payment, closing costs) are transferred to the seller, usually through a lawyer or title company acting as a neutral third party.
• Keys and Deed Exchange: Upon successful transfer of funds, the seller will typically hand over the keys to the property, and you’ll receive the official deed of ownership.