Get started on your journey to homeownership!
For many Canadians the homebuying process can seem daunting and overwhelming. Below we outline 10 steps to help guide you through the basics of the homebuying process to get you started!
STEP 1 – Build a Budget
To purchase a home you will require a minimum down payment of 5% and enough money to cover closing costs-typically around 2.5% of the purchase price. Consider where this money will come from and how much you would be comfortable paying monthly towards your mortgage. It’s important to keep in mind taxes, utilities and lifestyle against your household income and debts.
Once you’ve reached your desired monthly payment, you can use our calculator page to determine your comfortable mortgage range and purchase price.
STEP 2 – Mortgage Pre Approval
Before you start the house hunting process, you should obtain a mortgage pre-approval from a mortgage specialist. The mortgage agent will collect all the required documentation to verify how much how much house you can afford based on your income, debts, credit score and lifestyle/financial goals. With a pre-approval the mortgage agent will be able to obtain a rate hold for 120 days. The mortgage pre-approval will give you confidence in your purchase power so you can make an offer quickly, if needed.
Visit our Brokers page for a list of Accredited Mortgage Agents.
STEP 3 – Choose a Realtor and Lawyer
Finding a trusted Realtor is crucial to the home buying process. Your Realtor will understand everything you’re looking for in a home and will guide you through the house hunting experience. The Realtor will show you homes, put in your offer to purchase and help negotiate with sellers.
It’s also important to have a real estate lawyer in mind before you start looking for houses. If you’re unsure of who to use, we are always happy to recommend one of our trusted realtor and lawyer connections.
STEP 4 – House Hunting
Working closely alongside your Realtor you will begin house hunting for the perfect home. While you are house hunting keep in mind your wish list, your budget, the neighbourhood and location.
STEP 5 – Make an Offer
Once you’ve found a house you would like to purchase, your real estate agent will write up and present your offer to the seller. This offer will include the price, conditions, deposit and closing date. The seller either will either accept, reject or counter your offer. If your offer is accepted you will move on to the next step.
STEP 6 – Home Inspection (If Applicable)
If you included a home inspection in your offer to purchase (this is voluntary), the purchase is conditional on the outcome of your inspection. If your inspection reveals major issues, you can negotiate those repairs with the seller before your deal closes, or legally withdraw your offer. If you chose not to include a home inspection in your conditions, you will skip this step.
Step 7 - Appraisal
Some lenders require an appraiser to provide an independent estimate of the value of the house you are buying. The appraiser is a member of a third party company and is not directly associated with the lender. The appraisal will let all the parties involved know that you are paying a fair price for the home.
STEP 8 - Obtain House Insurance
Prior to your closing day, you will need to have home insurance in place and provide proper proof of insurance documentation to your lawyer. You can obtain home insurance from a trusted institution or with the help of an insurance broker to help to shop around on your behalf.
STEP 9 – Finalizing The Deal
Finalizing the deal will include the final approval of your mortgage, a meeting with your lawyer to finalize details like insurance and conditions, and the results of a title search. It will also include signing mortgage loan documentation from the lender.
STEP 10 – Closing Day
The final step in the home buying process-closing day! This is the day you legally get possession of the house. Your lawyer completes the paperwork, payments are finalized and you receive the deed and the keys to your home.