Helpful information for your real estate journey

If the built-up equity in your current home will be applied to the down payment on the new home, naturally the former will need to be sold first.

Some home buyers decide to turn their current home into an investment property, renting it out. In that case, the current home will not need to be sold. However, your loan advisor will still need to evaluate your risk profile and credit history to determine whether making a loan on a new home is feasible while retaining title to the old home.

Buyers often have a short time frame to sell their current home when relocating to a new city because of a job transfer. If you are moving but taking a position with the same employer, check to see if they offer relocation assistance to help offset some of the costs.

The list price that you see online is wrapped up in one number, but the reality of buying a house comes with closing costs, a mortgage, and other considerations. Before you begin the searching process, apply for a pre-approved mortgage. This will give you an idea about how much you can afford and what you will have to pay in the next 15, 20, or 30 years. Plus, many sellers may require that buyers are already pre-approved for a mortgage. If you are fighting for the house of your dreams, you will need to do everything you can to get ahead

A deposit is the money you put down to secure a property that you want to purchase. Providing a deposit is both a gesture of good faith and a serious commitment. Once the seller accepts your written offer, it becomes an Agreement of Purchase and Sale (APS), which is a legally binding contract. The deposit is then placed into a trust account upon the acceptance of an APS and it forms part of your down payment.

Purchase price of your home

Minimum amount of down payment

$500,000 or less

5% of the purchase price

$500,000 to $999,999

5% of the first $500,000 of the purchase price 10% for the portion of the purchase price above $500,000

$1 million or more

20% of the purchase price

It’s not required, but it’s a darn good idea! Final walk-throughs give buyers a chance to make sure nothing had changed since their first visit. If repairs were requested, as part of the offer, a follow-up visit ensures that everything is squared-away, as expected, per the terms of the contract.
Home inspections are highly recommended because they can reveal defects in the home that are not easily detected. Home inspections bring peace of mind to one of the biggest investments of a lifetime.
The new mortgage rules require that all mortgage applicants qualify at a rate that’s two per cent higher than your contracted rate or the Bank of Canada’s five-year benchmark rate. This is to ensure that borrowers will be able to make their mortgage payments should interest rates increase. Note: The Department of Finance announced an update to how the rate is calculated in April 2020, but its implementation has been pushed back due to the COVID-19 pandemic.
There is a common misconception that mortgage loan insurance protects the borrower. This is not the case. Mortgage loan insurance is there to protect the lender against default in payments by the homebuyer. If the buyer has a down payment of less than 20 per cent of the purchase price, the lender will purchase default insurance and pass that cost on to the borrower. This can be paid up front or tacked on to the mortgage payments and stretched out over time. Mortgage loan insurance is offered by companies like Canada Mortgage and Housing Corp., Genworth Financial Canada, and Canada Guaranty.
If you have less than 20% of the selling price to include as a down payment, your lender will require you to arrange mortgage default insurance. The Canada Mortgage and Housing Corporation (CMHC) is the most widely-used provider of mortgage insurance, and while your lender will pay the insurance premium on your behalf, the premium will be included in the cost of your mortgage. However, you will be responsible to pay the provincial sales tax on the cost of this insurance at closing.
You can expect to pay for your home inspection, mortgage default insurance if you down payment is less than 20 per cent of the purchase price, the Land Transfer Taxes, lawyer fees, appraisal fee and property taxes, among other things. Make sure you budget for this! On a $500,000 home, closing costs can range from $7,500 to $20,000
In Ontario, a first-time home buyer can qualify for the Land Transfer Tax Rebate of up to a maximum of $4,000.00 of the total land transfer tax. There are different factors that determine whether you are a first-time home buyer or not. Some of these factors are very straight forward and others not. A series of questions need to be answered for the buyer’s lawyer to be able to properly assess a buyer’s eligibility for the Land Transfer Tax Rebate.
Some lenders may also require you to carry title insurance for the property. Title insurance is designed to protect you from potential issues, including the existence of previous liens on the property that could prevent you from establishing clear ownership. Land survey and property record errors have also resulted in cases where ownership has been disputed. You can learn more about title insurance from the Financial Services Commission of Ontario (FSCO)
In any given sale of a home, you will be asked to give notice to the service providers to your home such as hydro, cable, water, gas and home insurance as of the date of closing and to close these accounts.