Consideration for a First-time homebuyer Ontario PPS Law
I might have to step beyond the role of a lawyer for the purpose of this article. Ensure you have considered the steps below before you purchase your first home.
Step 1: Work your numbers:
You will need to know your monthly mortgage commitment, your home insurance commitment, your personal budget in comparison with your purchase price. Your mortgage is like your marriage! You’re bonded to it for the next 25-30 years. Consider all expenses you will incur along with your personal circumstances. This will include your mortgage, common area maintenance, condo fees, hydro, heat, waste management, property tax, parking cost, home and fire insurance, your other utilities like telephone, internet, rental equipment coupled with your other insurances (health, term and life), gas and may be tuition for your child(ren).
Step 2: the down payment:
Potential homebuyers start this process early on. There are more ways to save and avoid tax at the same time. Consider the Home Buyer’s plan (HBP) making you eligible to withdraw upto $60,000 from your RRSP and the First Home Savings Account (FHSA) in saving your down. Your taxing professional would be able to advise you better on this. Also work on your mortgage preapproval.
Step 3: Finding your home:
This is where you will definitely need a realtor. As a buyer you won’t usually have to pay directly to your realtor (unless your APS requires you to). They are compensated by the seller. However, a realtor’s fee or commission is a part of your purchasing price. DO NOT SIGN A BUYER’S REPRESENTATION AGREEMENT (BRA), MAKE AN OFFER or AN APS BEFORE YOU TALK TO A LAWYER or review with him. A lawyer may be able to advise you on what you’re missing to protect your best interest. Not all properties are the same. Condos are different from detached and semi-detached houses. Zoning and by-laws may impact your intended purposes.
Step 3: Getting your lawyer:
You will need your real estate lawyer for a variety of role he plays in your purchase. This ranges from acquiring title insurance, performing title search, receiving mortgage funds and to conveyancing and closing the transaction.
First-time home buyer rebate
Any person, in the previous four years, who has not occupied a home they own or one that their current spouse or common-law partner owned is considered a first-time home buyer.
They are eligible for up to $4,000 for each land transfer tax.
To conclude you will need more money for closing than what you agree as a purchasing price on the APS. This will include home insurance, title insurance, appraisal fees, home inspection fees, survey fees (if included or required), appraisal fees, land transfer tax and lawyer fees. You might incur additional expenses like moving cost, painting and repairs.
Upon closing, you will need to update utilities, transfer services and update your change-of addresses and your property ownership with CRA, Service Ontario and the municipality.
Inability to meet mortgage commitment: In the event of your inability to meet your mortgage commitment, consider between the options of a short-term mortgage payment deferral, a forbearance plan to make reduced payments, extension of the amortization period and spreading the missed payment across the balance of the mortgage period.
How can PPS LAW PROFESSIONAL CORPORATION help you?
If you require further assistance in the above matter, please contact us. We are Immigrant-founded, multilingual and accommodating to cater the needs of all walks of life including the working-class community. As experienced professionals, we have been successfully assisting clients in this matter to their satisfaction. Contact us today.