Now that you know what you're looking for, the next step is figuring out what you can afford. A review of your income, savings, monthly expenses, and debt will be necessary. Early on in the process, you'll want to get pre-qualified for a mortgage loan, which helps determine how much you can afford. It enables you to move swiftly when you find the right home, especially when there are other interested buyers. It also indicates to the seller that you are serious and can afford to buy the property. A pre-approval is a simple calculation done by a mortgage lender that tells you the amount you'll be able to finance through a loan and what your monthly payment will be. When you find a home to buy, a pre-approval also reassures the seller that you have the financial means to purchase his or her home. Know what you can afford is the first rule of home buying, and that depends on how much income and how much debt you have. It pays to check with several lenders before you start searching for a home. The price you can afford to pay for a home will depend on several factors, such as: gross income the funds you have available for the down payment, closing costs and cash reserves required by the lender your debt your credit history the type of mortgage you select current interest rates UNDERSTANDING THE HOME BUYING PROCESS
First-Time Buyer Incentives
1.Welcome Home Niagara Home Ownership Program
The Niagara Region is again offering a 5% forgivable loan, to a maximum of $10,763, to qualified buyers with low to moderate incomes. Among other requirements, a buyer must not own an interest in other residential properties, and must currently be renting and looking to buy a principal residence. For more information, go to: http://www.nrh.ca
2.Land Transfer Tax Refund for First Time Buyers
A first-time buyer can claim up to $2,000 in Ontario Land Transfer Tax, either by offsetting the tax when registering the home purchase or by claiming a refund later.
To qualify, a first-time buyer must be at least 18 year old, must occupy the home as a principal residence, and (this includes a spouse) cannot have owned a home or an interest in a home anywhere in the world.
If one or more of the buyers are not a first-time home purchaser, the refund will be reduced and apportioned to the interest acquired by the person who qualifies for the refund.
For more detailed information, visit: http://www.fin.gov.on.ca and search Land Transfer Tax Refund.
3.The home buyers' tax credit (HBTC)
The Home Buyers Tax Credit is non-refundable and calculated by multiplying the lowest income tax rate of 15% by a tax return claim of $5,000. The credit on $5,000 works out to $750. First time buyer conditions apply. That is, a buyer can not live in another home owned by the buyer, spouse or common-law partner in the year of acquisition or in any of the previous four years.
The buyer must occupy the home, and when two people buy jointly, the tax claim can be split but cannot exceed $5,000 and the credit cannot exceed $750. A person with a disability can also qualify for and claim the Home Buyer Tax Credit. For more specific information, visit: http://www.cra-arc.gc.ca and search Home Buyers Tax Credit.
4.The RRSP Home Buyers Plan
With the Home Buyers Plan a buyer can withdraw up to $25,000 from their RRSP to buy or build a qualifying home. The amount has to be repaid into the RRSP annually over the first 15 years. The home purchased has to be occupied as a buyer’s principal residence within one year of buying.
First-time buyer conditions apply. That is, he or she cannot have owned a home for 5 years prior to using RRSP for a home purchase. People with disability are exempt from the first-time buyer requirement. For more information got to: http://www.cra-arc.gc.ca and search Home Buyers Plan.
NEW TO CANADA AND THINKING HOW TO BUY???:
- Immigrated or relocated to Canada within the last 36 months.
- 3 months minimum full time employment in Canada.
Minimum employment requirement waived for those being transferred under a corporate relocation program.
- Valid work permit or obtained landed immigrant status.
- All debts held outside the country must be included in the total debt servicing ratios (rental income earned outside of Canada is to be excluded from the GDS/TDS calculation).
CENTURY 21 Today Realty Ltd., Brokerage*