Navigating the World of Canadian Home Buying
Step 1: Figure out how much you can afford.
Falling in love with a house you can’t afford can be heartbreaking. Avoid disappointment by figuring out your budget before you start looking.
- First, decide how much you can afford for your down payment. The bigger your down payment, the less principal you will owe, and the less interest you will pay.
- Don’t forget about closing costs, like insurance, legal fees, home inspection costs, and land registration. Add those to your moving expenses and service hookup fees, and they can add up surprisingly fast.
- Your monthly housing expenses (mortgage, taxes, heat, etc.) shouldn’t use up more than 32% of your income. (If your combined monthly income is $5000, for example, 32% of that is $1600.) If you have car payments or credit card debt, the rule of thumb is that debt repayment shouldn’t be more than 40% of your income.
- Get pre-approved for your mortgage. It’s a good way of finding out how much you can borrow – and it speeds up the process once you’ve found the home you want to buy.
Step 2: Figure out what type of home is right for you.
Step 3: Decide where you want to live.
Living in an area you like is as important as buying a home you love. Do you want a busy urban lifestyle, a house in the ‘burbs, or a quiet place in the country? Do you want to walk to work or are you okay with a longer commute? Do you need to be close to good schools? Rec facilities? Shopping?
Step 4: Find a Realtor and Start looking.
Go to open houses. Visit mls.ca. Check the classifieds. Drive around neighbourhoods you like looking for For Sale signs. Talk to your REALTOR® about your needs and start looking at properties.
Trademarks owned or controlled by The Canadian Real Estate Association. Used under licence.