First Time Home Buyers
Purchasing a home for the first time can have mixed emotion such as exciting, scary, and a great accomplishment! It is also one of the largest financial decisions that you will ever make. It may be a process with questions and facing in mystery and unknowns; however, it does not have to be!
At the Lotus Yuen Team our mission is to commit to deliver you the highest level of real estate customer service and a stress-free first time home buying experience. We believe that your first time buying a home should be exciting, comfortable, informative and stress-free. We will take care for you every steps and explains to you when you have questions.
To help alleviate some of the stress and answer your many questions about getting into the housing market, we have put together a summary of some of the most significant things you must know when buying your first home:
What You Need to Know About Buying Your First Home
1. Determine What You Can Afford
The first step in your home purchase is to prepare yourself for the reality and financial responsibility of your new home ownership. And you need to make sure that you are in a position to handle those responsibilities and to get pre-approved for a mortgage.
Purchasing a home involves one-time costs and monthly expenses; therefore, you are required to determine how much you can afford for your new homme and if you’re financially ready for home ownership. Surely you’ll want to figure out:
- Total Household monthly income.
- Total Household monthly debts and expenses.
- How much you have set aside for a down payment.
2. Know Your Expenses
The purchase price of your new home is just one of the costs associated with home ownership. Real estate experts suggest that you budget 1.5% of the purchase price of your home to cover these costs. It depends on the value of your house and your Realtor can provide you the estimated closing close.
- Home Inspection – A home inspector’s job is to examine a home’s condition. Typical issues involve normal wear and tear, but can sometimes include serious material defects. Getting a home inspection before purchasing a property is one of the best decisions you can make.
- Appraisal and/or Survey – In order to provide financing your lender will sometimes require an appraisal or survey of the property, to make sure that the value of the home matches its purchase price.
- Land Transfer Tax – A provincial tax based on the purchase price of your new home. With the current government program, you can get different rebate from the government.
- Mortgage Insurance – If your down payment is less than 20% of your purchase price, you may need to pay mortgage default insurance. The cost of this insurance varies depending on the amount of your down payment. The cost will be rolled into the cost of your monthly mortgage payment.
- Legal Fees – There are a number of legal fees involved in the purchase of a home, such as paying your attorney for the title search, deed preparation and registration.
- Title Insurance – Protects you from situations such as title fraud or flawed surveys.
- Home Insurance – Making sure that your home is insured is a condition of your mortgage. Your lender will require you to have home insurance before they release your mortgage to you.
- Adjustments – Adjustments are made for things that the seller has paid for, but which you now owe part of because the home is now yours. This could include things like property taxes or rental fees for hot water heaters.
- Utility Hookups and Moving – You will be responsible for any utility transfers and costs associated with moving into your new home, such as hiring a moving company.
- GST – for new home or presale, you may need to incur to pay GST on completion.
3. Get Pre-approved
After you have figured out what you can afford, it is a great idea to sit down with a mortgage agent or broker and get pre-approved for a mortgage. This will make your home search easier by narrowing your focus and will prevent you from falling in love with a home that is outside of your price range.
If you’re not sure where to start, visit our Business Partners page for a list of mortgage agents and brokers. Our clients have enjoyed working with them. If you’re ready to get pre-approved, visit our Get Pre-Approved for a Mortgage page.
4. First Time Home Buyer Incentives
As a first time home buyer you are eligible for refunds, benefits and programs not available to other home buyers. For example both the First Time Home Buyers’ Tax Credit and the Land Transfer Tax Refund for First Time Home Buyers are tax breaks that could end up saving you thousands of dollars!
Home Buyers’ Plan
Qualifying home buyers can withdraw up to $25,000 (couples can withdraw up to $50,000) from their RRSPs for a down payment. Home buyers who have repaid their RRSP may be eligible to use the program a second time.
Canada Revenue Agency www.cra.gc.ca
Enter ‘Home Buyers’ Plan’ in the search box. 1.800.959.8287
GST Rebate on New Homes
New home buyers can apply for a rebate for the 5% GST if the purchase price is $350,000 or less. The rebate is equal to 36% of the GST to a maximum rebate of $6,300. There is a proportional GST rebate for new homes costing between $350,000 and $450,000. At $450,000 and above the rebate
Canada Revenue Agency
www.cra.gc.ca Enter ‘RC4028’ in the search box.1.800.959.8287
BC Property Transfer Tax (PTT) First-Time Home Buyers’ Program
Qualifying first-time buyers may be exempt from paying the PTT of 1% on the first $200,000 and 2% on the remainder of the purchase price of a home priced up to $475,000. There is a proportional exemption for homes priced between $475,000 and $500,000. At $500,000 and above the rebate is nil.
BC Ministry of Small Business and Revenue
First-Time Home Buyers’ Tax Credit (HBTC)
This federal non-refundable income tax credit is for qualifying buyers of detached, attached, apartment condominiums, mobile homes or shares in a cooperative housing corporation. The calculation: multiply the lowest personal income tax rate for the year (15% in 2012) x $5,000. For the 2013 tax year, the maximum credit is $750.
Canada Revenue Agency
For more information, click Top Grant and Rebate Oct 2014.
5. Know What You Want & Get Organized
At this point you’ll want to sit down and figure out exactly what type of home you’re looking for. A simple way to do this is by making 2 different lists: a list of what you need from a home, and a list of things that you want from your home. The list of things that you need will include all of the features that are necessary for you and your family to function comfortably during your daily life. Things such as the number of bedrooms you need for the size of your family, or a one storey home if accessibility is a factor. The list of things that you need will include features that you would like to have but that aren’t absolutely necessary, such as a pool or a den.
It’s also a good idea to make sure you are organized for your home search by doing some research on what area you’d like to live in. Look at all of the aspects of the location you are considering and the surrounding area: is it attractive based on your proximity to work, schools and amenities such as grocery stores, parks, commuter routes, etc.? Keep a detailed map on hand and highlight your areas of interest. Knowing what you need and what you want from a home, as well as what area will suit your lifestyle best will make searching for your new home easier and less stressful.
6. Get a Professional on Your Side
The purchase of your first home is one of the biggest and most exciting investments that you will make. This purchase will affect your family, your finances, and your lifestyle. For a decision this important you want to make sure that you have an experienced professional on your side who can guide you through the process and protect your best interests along the way.
Best of all, as a home buyer the professional services of your Buyer’s agent are completely free to you! As is the industry standard, your buyer’s agents fees are paid by the home seller. A licenced agent will protect your interests by making sure that you are fully informed about your purchase and by handling the legalities and negotiations.
What Can Lotus Yuen Team Can Do For You
When you with Lotus Yuen team, you not only get the benefit of working with an experiences professional, you also receive the services of a whole team of people dedicated to the stress-free purchase of your home! Where else can you employ the services of entire team of professionals at no cost to you?
We understand the importance of purchasing your first home and we believe that every real estate purchase should be handled with the utmost responsibility and care. Buying your first home should be exciting, informative, comfortable and stress-free.
We Commit To:
- Go Above & Beyond.
- Provide you with the highest level of customer service.
- Work as your partner in the purchase of your home. To consult with and educate you, so you can make informed decisions regarding the purchase of your new home.
- Provide you with stress-free real estate experiences.
To learn more about our philosophy visit our Mission, Vision and Values page.
We also offer a number of complimentary services, all geared towards making your first home purchase exciting, informative, comfortable and stress-free. Our team will provide you with:
- VIP Listing Access – Automatic notification of new homes on the market as soon as they become available, BEFORE they hit Realtor.ca or your local newspaper. Sign up for VIP Listing Access.
- A Dedicated Buyer specialist who is looking out for YOUR best interests.
- Information on market trends in the area.
- Information on government programs available for Buyers.
- Local school information.
- Factors affecting local neighborhoods, such as zoning changes and new developments.
- Conditions and histories of properties.
- Comparative Market Analysis on homes you are interested in purchasing so you can determine what they’re really worth!
- Assistance in viewing unlisted (for sale by owner) properties.
- A whole team of professionals working towards the stress-free purchase of your first home. Meet the Team to find out more about us.
It is our hope that you have gained some insight into the home buying process and that we’ve taken some of the mystery out of how to get started.
If you’d like more information on buying your first home, access to our detailed and comprehensive Home Buyers Guide, or to speak with somebody about buying your first home, sign up for a free, no obligation Buyer Consultation with one of our professional Buyer Specialists: