Tip #1: The Home Buyers' Plan (HBP) allowance of up to $25,000 for Down Payment
Use your RRSP towards a down payment, and it will help you maximize your tax return. You will be able to withdraw up to $25,000 tax free under the Home Buyers' Plan (HBP) to use towards your down payment. RRSP must be in your account for 90 days.
Tip #2: Pre-Approval
A pre-approved mortgage will help you know the price range of houses you should be looking at and will help lock in the rate of interest that you want for a set time. I will also help with a quicker and smoother sale.
Tip #3: A Good REALTOR®
Having a realtor referred to you from a family member or a friend is a good start. REALTORS® can help you with your search for a suitable property; give you reasonably competent and expert advice & refer you to 3rd party professionals or experts as required; negotiate your offer for you; and be a mediator between all required professionals.
Tip #4: Realistic Expectations
Know what you can afford now and what you can plan for the future.
Tip #5: Home Inspection
Very important for the seller and the buyer to know what defects there are, if any, and costs that may be incurred which either may be corrected or not, by the seller before the final close or by the buyer after the final close. Costs to remedy can be negotiated by both parties via. realtors. This may or may not effect the final selling price.
Tip #6:The Offer
If you really think that you have found the right place and you are not sure of any potential hindrances to the sale, then make an offer with proper clauses and conditions, with your Realtor's help, to protect you and the seller in case your future plans for financing, insurance or inspections reports are not favorable. You don't want to run into problems at the last minute putting everybody at risk at time of closing.
Tip #7: Extra Pre- and Closing Costs
Costs, but not all, may include fees for lawyer, title insurance, mortgage insurance, title search, mortgage registry, home insurance, moving expenses, home inspectors, appraisers, tax, heating, hydro and water adjustments, moving expenses, appliances, and possibly some furniture. Your realtor can help you with some of these figures.
Tip #8: Location
Make sure that the location is right for you, and if you work, your work place; that you have as many amenities, stores, schools, churches and municipal services, that would suite your life style, to be as conveniently close to you as possible. Take a drive through the neighborhood before you move to familiarize yourself.
Tip #9: Unbiased Opinion
Try to find a friend or family member that would be able to also look with you at your potential property and ask their honest opinion about the home. Having a second opinion from someone you can trust can be of great value.
Tip #10: Comparative Market Analysis
Knowing what other similar homes are selling for and have sold for in the area in the last 3 - 6 months is very important to help you to understand value. Having a realtor prepare this report is an important step in the buying process.
Also, Very Important for your Information regarding Tax Refunds and Tax Credits:
1. Land Transfer Tax Refund for First-time Home Buyers
Land Transfer Tax applies to all transfers of land in Ontario.
First-time home buyers may be eligible for a refund of all or part of the tax. For transfers where:
- the agreement of purchase and sale was entered into after December 13, 2007, the refund applies to all homes, whether newly constructed or resale.
- the agreement of purchase and sale was entered into before December 14, 2007, the refund only applies on the purchase of a newly constructed home.
NB - Applications for a refund must be made within 18 months after the date of the transfer. The maximum amount of refund is $2,000.
2. FTHB Tax Credit - $5,000 Non-Refundable Income Tax Credit
To assist first-time home buyers with the costs associated with the purchase of a home, the Government of Canada introduced a FTHB Tax Credit in 2009 — a $5,000 non-refundable income tax credit amount on a qualifying home acquired after January 27, 2009. For an eligible individual, the credit will provide up to $750 in federal tax relief starting in 2009.
(Reports from CMHC-SCHL Canada's Economic Action Plan Offer Incentives for HomeOwnership 1996-2013)