Canada has one of the highest rates of home ownership in the world, with two out of three families in the country owning a house. More and more Canadians are investing in real estate, and smartly so, since it is one of the best investments one can make. Investments in general are volatile, but real estate is one in which you can be sure of a steady increase in its value, and get a substantial return on your investment.
There are so many advantages of owning property; you don’t have to be at the mercy of your home owner, and vary of increased rents or cancelled leases. When you buy your home, the payment you invest builds equity, whereas the money you pay as rent goes to your building or property owner. This equity can in turn be used as a security for any other loan that you may need to take in future.
Investing in your first home can certainly be an intimidating experience, especially since it is one of the largest investments that you would be ever making at that phase in your life. First time home buyers enjoy many benefits, but to qualify as a first time home buyer neither you nor your spouse should not have ever owned a home or made a purchase before.
Do your research
If you are planning to invest in your first home and have zeroed down on your preferred location it is important that you first conduct a research on what incentives are currently available for first time home buyers. No matter which part of the country you plan to invest, be it Milton, Mississauga, Oakville, Toronto or Burlington, you will find that you can obtain a mortgage pre-approval for the home loan with notably reduced down payment requirements.
In order to ensure that you have saved enough money to pay the down payment and other fees that are involved in your home purchase, you would need to have a clear understanding of the down payment requirement and the loan options you can obtain a mortgage pre-approval for.
As a first time homebuyer, you can take advantage of the two major incentives that the Government of Canada has introduced. These are the Home Buyers’ Plan (HBP) and the First-Time Home Buyers’ Tax Credit (HBTC), and are both a great way to help save money when buying your first home.
Let’s get to know a little bit more about each of these incentives and how you can benefit while buying your first home. First time homeownership has become so much more affordable and attainable than earlier, with the lowered down payment amounts and subsidized interest, and you will find that there really is no time like the present to make your dream come true.
Registered Retirement Savings Plan (RRSP) First-time Home Buyers’ Plan
This excellent initiative from the Canada Revenue Agency will provide you a tax incentive if you are a first-time home buyer, as you can use your retirement savings to buy or build a home. Under this plan, you can withdraw up to $25,000 from your Registered Retirement Savings Plans with absolutely no tax penalty to buy or build a home for yourself or for someone related to you with a disability. Of course, you should be a resident of Canada who is purchasing your first home or else it has been at least 4 years since you have last owned a home, in order to qualify for the Home Buyers Plan. You will need to enter into a written agreement to buy or build a home before you can withdraw funds within the Home Buyer’s Plan. Additionally, in order to be eligible, you also must occupy your home as your primary residence. You have a maximum time period of 15 years to pay back the amount that you withdraw from the plan in yearly installments.
Here is more information on the Home Buyers Plan that can help you decide if you are a fit:
• The amount being withdrawn should have been in your RRSP account for a minimum period of 90 days.
• If you are buying your home jointly with a spouse, you may withdraw up to $50,000.
• You can repay the RRSP in yearly installments for up to 15 years, which starts from the second year after withdrawal your yearly repayment will be 1/15th of the amount you withdrew. In case you have not contributed to your RRSPs for one or more of these years, the amount will be added to your income at tax time.
The Home Buyers Plan actually allows you take money out of your RRSPs tax-free and is a great way for you to put a down payment on your new home if you have an RRSP account.
If you don’t have an RRSP account, it’s not too late, and you can still benefit from the Home Buyers Plan. All you need to do is to open up an RRSP account and start putting your savings in it. You will receive a credit/refund at tax time, which can be added to your savings or used to pay for other expenses.
First-Time Home Buyers’ (FTHB) Tax Credit
The First-Time Home Buyers’ (FTHB) Tax Credit is Canada’s Economic Action Plan incentive which gives first time home buyers assistance with the huge costs associated with the purchase of a home. The various costs involving the purchase of a home, such as land transfer taxes, legal fees and disbursements can be a great strain on your finances, as in addition to bearing these costs, you will also require to save money for the down payment. According to this incentive, a $5000 income tax credit is given for the whole year in which you buy your first home. If you are purchasing the property with your spouse, you can split this credit, but not exceed $5000 so you can expect up to $750 in federal tax relief.
As with the Home Buyers’ Plan you can be eligible for incentive only if the home you purchased is used as your principal residence. In order to receive this credit, all you need to do is to notify your tax preparer about the purchase of the qualifying home, and you can be sure that you receive this credit.
Arm yourself with The Home Buyers’ Plan and First Time Home Buyers’ Tax Credit to get the most out of your first time home purchase.
Buy / Sell / Invest in property – Pam Bhasin
Planning to buy a house for your family and you in Milton, Mississauga, Oakville, Toronto or Burlington, and want to make sure that you get the best deal? The entire process may not be as easy as you think, with complexities cropping up when you least expect it to. Most people find it easier to buy their dream home with a real estate agent by their side. There are so many activities that need to be coordinated at the same time—tons of paperwork to process, hiring inspectors, forming and maintaining good relations with the sellers through their agent, getting repairs done and negotiating prices and who pays for them and so much more. You can expect ready replies to your questions about the local market area, not just about properties for sale, but also about neighborhoods, schools, medical facilities, local economy and more.
A professional real estate real agent with years of experience up his sleeve would usually have established contacts with mortgage loan brokers and good inspectors, and many others whose combined efforts help to make the entire buying process easier. These are people in the real estate business who know all about the appropriate practices and behaviors in the Ontario region. Real estate agents act diligently on your behalf, and help to remove all stress and confusion from the home buying process.
Buying a home is a breeze with a real estate agent by your side
You don’t buy homes every day. It’s therefore a total waste of time and effort to have to learn about real estate dealings in great detail. Hiring a real estate professional does away with your need to know about all the nitty-gritty’s involved in buying and selling real estate. Most often, real estate agents in the same geographical area tend to charge you similar fees, so why not hire a person who has more knowledge and market experience than you do? Since residential real estate is a very local business, you will find that even a distance of a few residential blocks can make a world of difference in the price of a home. Only an excellent real estate agent will possess the knowledge about the specific neighborhood in which you hope to buy or sell a home. When you hire professionals, you can save precious time that you could put to better purposes.
Professional real estate agents pay attention to details
Real estate agents are highly effective and helpful individuals who are able to understand the contract and sales processes. They are trained to pay close attention to the smallest details which may prove to be an important issue in the buying process. An experienced agent is highly attentive to your needs and will prepare you for all meetings that you may need to attend. He or she would help you prepare necessary documentation and make sure that the entire process is completed accurately.
With a trained eye for details, your agent will recommend relatively simple improvements to your home, like easy repairs, painting and de-cluttering, which can help you sell your home faster and for a better price. As your neighborhood expert, he or she can just walk through your home and see right away what needs to be done to get it sold sooner and for a better price. You will be surprised at their insights and tricks of the trade that you were unaware of.
Attentive service that is focused on your interests
Your real estate agent will focus on your wants and needs to the fullest extent as allowed by law and will strive to add value through representing your interests. He or she will focus on getting you the best possible home at the best possible price that is available in the market. While working hard not only in finding you potential new homes to see, he or she will also keep you informed of all events that takes place. As your representative who is an expert in the local market, your agent will negotiate the best prices and terms for you and be in a position to answer all of your questions when they arise. You can be assured that his or her vast experience and expertise in the local market will be used in your best interests during the entire negotiation process.
Attentive service that meets all your expectations
As someone who is planning to buy or sell a real estate property, it is entirely reasonable for you to expect your agent to tailor his or her approach to match your needs. Since your real estate agent represents you, he or she should be professional in appearance and demeanor. You can expect all your phone calls to be promptly returned, clear communication and an honest opinion about the property. Of course, it would be ideal to engage a real estate agent you really can get along with, but in reality, it’s not essential. As long as the person has the important skills that you lack, your compatibility with him or her is not of importance.
Efficient agents are those who are able to remove themselves from the emotional aspects of the transaction, yet provide courteous and attentive service to you. This trait also helps them in conducting negotiations, and because unlike you, emotions do not cloud their judgments or decisions. These professionals are able to present your case in the best light and agree on holding your information as confidential from other competing interests.
Get the benefit of the right affiliations
Your real estate agent will be a member of the local real estate board or be attached to a real estate firm that has access to the local listing services. He or she will also be active in the market or geographical area of Canada in which you hope to buy or sell property. You get access to their extensive database,
While some people are able to sell their own homes by just studying the long list of frequently asked questions that are found on websites where owners put their property for sale, the buying process isn’t as simple as you may assume. There is always the chance that you get into a tough situation and it can really pay to have a professional on your side.
Buy / Sell / Invest in property – Pam Bhasin
Now that the holidays are over, and the weather has begun to warm up, and so have you—you get more serious about your mission to buy or sell your home. Your interest perks up. You begin to day dream about owing your own piece of heaven that you would soon hope to call your home. You start by listing your home. You plan to accomplish your mission all on your own. Filled with hope, you hit the internet.
Yes, don’t be surprised, you are not alone, because for most people all over the world, the internet holds all the answers to their queries and the solutions to their problems. Some of you may even subscribe and peruse real estate magazines and publications. But what you need to know is that an experienced real estate agent holds the one key that can open several locks to potential homes in and around your preferred geographical area. He or she is your direct connection to the inside world of all residential and commercial property dealings and real estate. Sure, you can get tons of info on the internet, but for the hottest info on best deals and clarity on all legal aspects, your real estate agent is your best ally.
Your real estate agent can be an ally you can trust
That’s right, hiring an expert real estate agent is like finding a new best friend. This is someone who understands your life style and knows exactly what you need. It’s as though he or she can actually peer into your brain and read your mind, and then come up with professional advice that will take all your stress and worries away. On the other hand, if you are in a position where your real estate agent does not understand your needs or requirements for housing, it can be a nightmare that could result in endless headaches. A truly professional real estate agent will be able to smoothly streamline the entire process of shopping for your dream home.
Get the most reliable information on market conditions
For a clear picture on the current market conditions, the information that your real estate agent provides can actually influence your buying or selling decisions. There are several factors that can control the way you proceed—data on the average per square foot cost of similar properties, sales prices, number of days the property has been on the market are only a few of the factors which can have an impact on what you ultimately decide to do.
Real estate agents can prevent you from getting buried in paperwork
Purchase agreements run several pages these days. In addition, there are so many disclosures and other legal documents that fit into several inches thick dossiers. Now, do you imagine yourself studying every single document for accuracy? Are you confident that you can do that without making that one tiny error or omission that can cost you several thousand dollars?
Legal contacts can be hard for non-experts to handle. Of course, it won’t come as news to you that once you have made the decision to buy or sell a residential property; the “offer to purchase” contract is there for protecting your interests. It has terms and conditions to ensure that if certain conditions are not met with, you are in the position to back out of the real estate dealing. An expert real estate agent encounters similar types of contracts and conditions on a day-to-day basis, and that makes him or her very familiar with the apt terms and conditions to be used, how and when it is safe to remove these conditions and how your residential contract can protect you, whether you are making a sale or a purchase.
Take advantage of a large professional network
Most experienced real estate agents network with various other professionals in different fields, many of whom provide services that you may need to avail of when you are in the process of buying or selling real estate property. Keeping in mind the myriad of legal liability issues that come into play, many agents may hesitate to recommend one particular individual or company over another. However, they have an in depth knowledge about which vendors possesses a reputation for efficiency, competency and maintain pricing standards. Your real estate agent will be able to provide you readily with a list of references they have interacted with or have worked with in the past and give you reliable background information which will assist you in making a smart, well informed selection.
Your relationship with your real estate agent does not end after the transaction has been completed, for even the smoothest deals that close without any snags have the tendency to come back and haunt you. Just when you least expect it, authorities may fall months behind in the collection of taxes and invoices can get mixed up, or issues that were overlooked in the process may pop up, but you can be assured that all such confusion can be straightened out by getting in touch with your agent. Professional agents always stand by their clients to guide and advise you in times of your need, and never leave you in the lurch.
Real estate advise that can never go wrong
With an expert real estate agent by your side, looking out for your best interest, you will never be afraid to aim for what you want. Your agent will always work to help you get precisely what you desire, and aim to strike the best deal possible. Always make sure that you take time to speak to your real estate agent and effectively communicate your requirements and goals, and then pay attention to how he or she responds. Your relation to your real estate agent is akin to a marriage, it is a relationship that could even last a lifetime and as your closeness grows, you create a successful financial situation that benefits everyone.
Buy / Sell / Invest in Property – Pam Bhasin
Buy a house not a mortgage.
It is never easy to say “no” when you find yourself in a cozy two bedroom condo that is up for sale in one of the most popular communities in Milton, Ontario, Canada, especially after spending months searching for real estate options. You know that the condo seems exactly custom-made to match your lifestyle, complete with a lovely pool, and a fabulous gym which can save you so much on your annual health club membership. Oh, and the views from your living room of Lake Ontario are to die for.
Excited with your find, you may feel that the price tag on the condo seemed pretty reasonable, keeping in mind the convenient location, which would actually allow you to even walk to work and give you easy access to super markets, your kid’s school and the health clinic. It couldn’t get any better, could it?
But as you continue to ponder over the amount you would need to shell out, you realize that rather than owning a home that would make you feel warm and safe, you would end up owing a huge mortgage that would make you feel insecure and live in the shadow of fear for the rest of your life. As you consider further, just paying off your mortgage would make you give up on things that you consider a part of your lifestyle, like eating out at fancy diners with friends, or that occasional shopping splurge over the weekend.
And you really don’t need to have a graduate degree in Economics to understand the huge financial risk you are involved in, where a slight change in Canada’s lending rates would bring the market way down and leave you with a condo that you would not be able to sell at the price you have paid for it. And where would it leave you—scuttling back to the safety of your parents’ home, or hunting for a rental apartment all over again?
There are so many factors to keep in mind before investing in your first home—factors that may not be in clear sight when you first arrive at the foyer, awe struck by the sheer beauty and obvious conveniences that stare back at you. You need to consider the fact that while your current work location is close by, you may not be able to take up the imminent promotion that comes along with relocating to another city. This is a common cause of labor imbalances in Canada, where people buy their own homes and are less willing to move to another city to take up other jobs. The huge debt that is racked up by mortgages are also taking a toll on people’s minds and bodies and it’s not surprising to see more and more people suffering from anxiety and poor eating disorders.
Getting on a huge mortgage to pay for the home you have fallen in love with may prove dangerous, and you must realize that it would only work to your benefit if you ended the romance more sooner than later. You may be advised by your family and friends and even your government, to invest in your own home, but you have to realize that in today’s economy, real estate business has grown deep roots and is one of the leading sectors of the whole Canadian economy.
It is but natural to have a growing desire to own the space in which you would want to live in, but this may lead to a grave situation that you may have never planned to be in—and you may find yourself trapped by the four walls around you, buried deep in the mortgage you thought would be easy to pay off.
It is quite common for many first-time home buyers in Canada to find that they end up shelling out their entire income on mortgage payments, leaving them with very less to live on. In many cases, the kids end up paying the price of their parent’s bad decisions. While they live in good-quality homes in perfectly great communities, they’re being compromised by depriving them slowly and steadily of things that they should normally be entitled to. No more signing up for sports programs or going out with friends. What’s worse is that parents are forced to put their growing child’s health at stake by sacrificing good-quality food.
Buying a home is a great investment that’s good for you and even better for Canada’s economy. If you have a great paying job, it would be best to get a whole lot of savings so that you are not dragged into the quick sand that mortgage payments are. Your home is where your heart is, but that’s where you use your mind to plan out payments and not let mortgage scare you out of the real estate market.
Shopping for a new home is an exciting experience and taking out a mortgage is probably the single largest financial move that you will ever take. Never get caught making that move without the proper advice. The best course of action would be to get an online or over the phone consultation with a real estate agent or a mortgage specialist so you can have a mortgage pre-approval before you begin your search for a home. This way, you can avoid the disappointment of not getting qualified for a mortgage and shop with the confidence of knowing that you will qualify once you find the right real estate property.