Buying a Home in Ontario

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Buying a Home in Ontario

So, you are considering the buying your own home. It’s a very good idea, but you have to think twice. There are pros and cons for both renting and buying. Buying a home is not for everyone. Buying or building your home can be one of the largest investments you will make during your life.

Types of homes for sale on the market

Single-family detached

A detached house (home, or dwelling) means that the building does not share an inside wall with any other house or dwelling. It has only outside walls and does not touch any other building. It stands alone, and sits on its own lot. This often gives the family a greater degree of privacy. Usually, it is most expensive type of housing to buy.

Single-family semi-detached

Semi-detached house (often abbreviated to semi) consists of pairs of houses built side by side as units sharing a party wall and usually in such a way that each house’s layout is a mirror image of its twin. It can offer many of the advantages of a single-family detached home. It is often less expensive to buy and maintain.

Single-family townhouse (row house)

Townhouse is a style of medium-density housing that originated in Great Britain in the late 17th century, where a row of identical or mirror-image houses share side walls. The first and last of these houses is called an end unit, and is often larger than those houses in the middle. Townhouses are single-family homes. They can be freehold or condominiums. They offer less privacy than a single-family detached home, although each has a separate outdoor space. These homes can cost less to buy and maintain, even though some are large, luxury units.

Duplex

A duplex house is defined as a dwelling having apartments with separate entrances for two families. This includes two-story houses having a complete apartment on each floor and also side-by-side apartments on a single lot that share a common wall. Sometimes, the owner lives in one unit and rents the other.

Mobile Home

Mobile homes are built in factories, and then taken to the place where they will be occupied. While these homes are usually placed in one location and left there permanently, they do retain the ability to be moved.

Condominium

A condominium, or condo is the form of housing where a specified part of a piece of real estate (usually of an apartment building) is individually owned while use of and access to common facilities in the piece such as hallways, heating system, elevators, exterior areas is executed under legal rights associated with the individual ownership and controlled by the association of owners that jointly represent ownership of the whole piece. It is a self-contained unit consisting of a room or set of rooms including kitchen and bathroom facilities. A condominium may be simply defined as a “condo” that the resident owns as opposed to rents.

THE REALTOR

To buy a home you will need a team of professionals: realtor, mortgage broker, lawyer, insurance broker, home inspector, appraiser, land surveyor, builder or contractor. According to our experience, the key role belongs to the real estate agent or broker.

A real estate agent or broker is a party who acts as an intermediary between sellers and buyers of real estate/real property and attempts to find sellers who wish to sell and buyers who wish to buy. Realtors assist sellers in marketing their property and selling it for the highest possible price under the best terms. When acting as a buyer’s agent, they assist buyers by helping them purchase property for the lowest possible price under the best terms. Each realtor must have a licence. Unlicensed activity is illegal, but buyers and sellers acting as principals in the sale or purchase of real estate are not required to be licensed.

Please remember: if you are a home buyer you will not have to pay commissions to the real estate agent. Seller will. You will be helped for FREE.

Services provided to buyers

For the buyers of real estate a realtor attempts to do the following:

  • Helps you find home in accordance with your needs, specifications, and cost.
  • Takes you to and shows you properties available for sale.
  • When deemed appropriate, prescreens your financial situation to ensure you are financially qualified to buy the properties shown (or uses a mortgage professional, such a bank’s mortgage specialist or alternatively a mortgage broker, to do that task).
  • Negotiates price and terms on behalf of you to help you get the best possible deal
  • Writes an Offer of Purchase. This offer includes all the details of the sale.
  • Helps you to set the closing date you prefer. (Closing date is the date on which the sale of a property becomes final and the new owner usually takes possession.)
  • Gives you important information about the community
  • Helps you arrange a home inspection
  • Approximately calculates your monthly payments.
  • Approximately calculates possible Closing Costs various expenses associated with buying a home. These costs can include, but are not limited to, legal/notary fees and disbursements, property land transfer taxes, as well as adjustments for prepaid property taxes or condominium common expenses, if any.

Actually, the experienced realtor has already worked out the entire team and you will not have to worry about choosing a mortgage specialist, home inspector or lawyer.

HOMEBUYING STEP BY STEP

Canada Mortgage and Housing Corporation (CMHC) has developed a comprehensive Step by Step homebuying guide that gives you the information you need to make a wise homebuying decision and guide you through the entire homebuying process. This guide is very well written, easy to understand and it has everything you should know about buying a home in Canada. We strongly recommend you to start your new journey with it. Please go to http://www.cmhc-schl.gc.ca/en/co/buho/hostst/index.cfm

Homebuying Step by Step Guide will help you: evaluate your current financial situation to determine what exactly you can afford; identify related costs of buying a home; determine which professionals can help you with your purchase; evaluate your current and future needs, the type of housing, and the location that would be best for you; show how to do research on houses and condos for sale that reflect your needs; describe in detail how mortgage works; how to present an offer of purchase to the current homeowner; explain everything about closing day; and tell about your responsibilities as a new homeowner. It provides examples, worksheets, terminology definitions, and much more.

GOVERNMENTAL PROGRAMS

The Government of Canada offers programs and services to help you purchase, renovate, and adapt your house or condominium. There are a number of federal programs that can help you save money for a down payment:

  • A tax-free savings account (TFSA) lets you set money aside in eligible investment vehicles and watch those savings grow tax-free. You can use the savings to purchase and renovate a house.
  • The Home Buyers’ Plan (HBP) allows eligible individuals to make tax-free withdrawals from their RRSP – registered retirement savings plans to purchase or build a qualifying home.

GST/HST New Housing Rebate

The GST/HST New Housing Rebate program provides a rebate on part of the GST or the federal part of the HST paid on the construction or purchase of most newly constructed or substantially renovated houses used as a primary place of residence. It is delivered by Canada Revenue Agency (CRA). The rebate is available for any of the following:

  • building a home or contracting someone to build one
  • buying a newly constructed or substantially renovated home from a builder
  • buying a newly constructed house from a builder, where you lease the land from the builder under the same agreement to buy the house
  • substantially renovating a home or building a major addition to one
  • rebuilding a home destroyed by fire
  • buying a share of the capital stock in a newly constructed cooperative housing project

WHAT YOU SHOULD KNOW ABOUT A MORTGAGE

A mortgage is a loan secured by real property. The word mortgage is a Law French term meaning “death contract,” meaning that the pledge ends (dies) when the obligation is fulfilled, the property is sold, or the property is taken through foreclosure. A home buyer or builder can obtain financing (a loan) either to purchase or secure against the property from a financial institution, such as a bank, either directly or indirectly through intermediaries. Features of mortgage loans such as the size of the loan, maturity of the loan, interest rate, method of paying off the loan, and other characteristics can vary considerably.

To know more about the mortgage please visit the page “Mortgage” in sections “Everything About” – “Money” of our website.

YOUR RESPONSIBILITIES AS A HOMEOWNER

  • Make your mortgage payments on time
  • Maintain your home: A regular schedule of seasonal maintenance and repairs can help you protect your investment by putting a stop to the most common and costly problems before they occur.
  • Plan for the costs of operating a home: Think about some extra money for maintenance and other operating costs such as repair, snow removal, or gardening.
  • Make your home a safe place to live in: develop a fire evacuation plan; equipped your home with fire extinguishers that must always be easy to reach; install smoke alarms and carbon monoxide detectors – it is a legal requirement in Ontario.
  • Keep a list of emergency phone numbers handy.
  • Save in case of Emergency

 

RENOVATE YOUR HOME

The Government of Canada also offers programs and services that help with the renovation of your home. If you want to upgrade your house or condo, available programs, grants, and incentives include the following:

  • The Home Renovation Tax Credit is a non-refundable tax credit for work performed or goods acquired in renovating your home.
  • The GST/HST New Housing Rebate program provides a rebate on part of the GST or the federal part of the HST paid on the construction or purchase of most newly constructed or substantially renovated houses used as a primary place of residence.
  • Energy and pollution-saving upgrades are offered by the Office of Energy Efficiency. Grants and incentives will help you use less energy, switch to renewable energy, and produce less waste at home and on the road.

HOUSING SUPPORT FOR NEWCOMERS TO CANADA

If you are a newcomer to Canada, CMHC offers resources to help you:

  • Choose a city to settle in
  • Rent a home in Canada
  • Buy a home in Canada
  • Maintain a home in Canada

So, it is up to you to be a homeowner or not to be.

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Author: AllOntario Team

AllOntario.ca is a Problem-Solving Guide for Ontario residents and a marketplace for Ontario businesses. It’s all about living and doing business in Ontario. All in one site.