Purchasing a great home is indeed a difficult task, especially if you are a first time home buyer. There are a lot of options and resources, and so most of you find it difficult to narrow down your choices.
Here are a few tips, which can help you make a decision and can reduce your costs as well.
- The Home Buyer’s Plan
You should take advantage of the Home Buyer’s Plan or the HBP, as it is often called, if you are a first time home buyer and a Canadian citizen. This offer will allow you to withdraw a maximum amount of $25,000 from RRSPs, and you can either use it to buy a home or build a new one. However, this money must be paid back within 15 years.
- The Home Buyer’s Tax Credit
You can avail the Home Buyer’s Tax Credit or HBTC, if you have purchased a home, and you or your partner have not resided in a primary dwelling for the last four years. HBTC currently equals a value of $750, and is non refundable.
- Large Down Payment
You should consider buying a home only when you have saved a sufficient amount of money for the down payment. A large down payment will help you in acquiring a low interest rate, which can considerably reduce the costs of your monthly payments. It can also aid you by not requiring you to procure CMHC insurance, which is generally 20% of the new residence’s value.
- Real Estate Agent
You must appoint a renowned real estate agent to help you in the buying process. You may be going through this for the first time, but an experienced agent has been through the process many times, and thoroughly knows the ins and outs. He can answer all your questions and clear your confusions.
- Research
Do not just buy the first home you like. Conduct a proper research and evaluate all your options in terms of locality, price, and even mortgage rates. A thorough research is the key to acquiring a new residence at an affordable rate.
- Rates Comparison
It might be easier for you to take mortgages from your current bank, but that may not always give you the lowest rate. You should compare rates of all lenders and brokers before you select one. This will give you a general idea of the current rate, and will also help you in negotiation. In the long run, a difference of even a few decimal points in the rate can make a huge difference.