Buying a home is often the biggest purchase of your life and a mortgage loan, your biggest debt.
Whether it is a short-, medium- or long-term project, it is essential that you get all the information you need in order to make an informed choice. What are your needs? Will you have a single-family home? A condo? An income property? A new home or a previously owned one? Will you be able to afford it? What are your needs?
Types of dwellings
Your new home
The type of home you choose will have its share of advantages and disadvantages, so it’s important to weigh the pros and cons.
- Lower maintenance costs
- Materials up to current codes and standards
- New home guarantee program
Previously owned home:
- No GST or QST to pay on the purchase price
- Landscaping already done
- Higher maintenance costs
- Attractive option for a first home
- Co-owners agreement
- Administration, management and maintenance fees
- Collection of rent, accounting
- Renovations, maintenance, etc.
Your purchasing power
What is the maximum price you can pay? The mortgage loan amount necessary? Before making one of the biggest financial decisions of your life, you should:
- Make a realistic budget
Closely examine your personal finances: average gross monthly household income, current home expenses, your debts and other monthly obligations.
- Determine the down payment
The percentage of the purchase price you will have to pay for the mandatory down payment varies according to the type of building: single-family home, duplex, multiplex, cottage, condo, etc. This amount reduces your mortgage payments.
- Use the Home Buyers’ Plan (HBP)
Whether you are single or a couple, the HBP enables you to withdraw up to $25,000 from your RRSP, without any tax consequence, for the purchase of a first home.
- Budget for other costs
– Transfer duties (welcome tax)
– Fees: notary, building inspector
– Property taxes and utilities paid by the seller
– Mortgage life insurance, if necessary
Your financing choices
Some aspects of buying a home can be complex. You will have to make a number of important financing decisions and choose:
- The type of mortgage loan
- The amortization period
- The term of the loan
- The interest rate: fixed, variable?
Are you ready?
What is the best option in your situation? Do you know your real repayment capacity? Do you understand the financial implications of your choices? The impact of your real estate investment? Before making this big lifestyle change, it’s important to analyze your different options.
The purchase of a first home is a major asset in building your patrimony and can serve as leverage for other big projects. You should leave nothing to chance and avoid falling in love with a home that becomes a financial trap. Remember that a property is an investment whose value is measured when it is sold.
In your interest
With their proven know-how and expertise, our Wealth Management Advisors know all about the big steps that await you.
Working with our financial planning team (notary, tax specialist, financial planners), they recommend solutions that are tailored to your situation and your needs.
The Financial offers you a turnkey solution by giving you access to all the resources you need and by helping you make the right choices.
Should you invest in real estate?
For more detailed answers and a thorough analysis of your situation, place your trust in one of our advisors.