Today’s mortgage rates are attracting new buyers into the real estate market. Low rates make your mortgage payment more affordable and drive up the demand for local real estate.

If you’re a first time home buyer, don’t let the house hunting FOMO push you into making any of these costly mistakes.  Here are some common mistakes you can avoid.

Mistake #1: House Hunting Before You Have The Mortgage Figured Out

There is no harm in searching online or checking out your local real estate, but if you go out and start seeing homes before you have strong financing, you are setting yourself up for disappointment. The house you see today could be sold tomorrow, so it doesn’t make any sense to fall in love with a home before you have financing. Make sure you know your budget and that you’ve spoken with your mortgage broker to get a preapproval for the amount that fits your lifestyle.

Mistake #2: Talking To Only One Mortgage Lender

Today’s mortgage rates are historically low, but that doesn’t mean that you should trust the first mortgage lender that comes to mind. You should do some homework and connect with a mortgage broker who can help you get approved for the best mortgage. Remember that the mortgage rate is just one part of the total cost of buying a home, and different lenders provide different levels of service and have different fees. Find a licensed professional that you are comfortable working with.

Mistake #3: Forgetting About Closing Costs

Purchasing a home has several other costs that won’t be as clear cut as the house price that you agree on with the seller. If you forget to budget for closing costs, you could run into a very stressful situation. Thankfully, first time home buyers can take advantage of rebates on Land Transfer Tax and other programs. However, the other typical closing costs include appraisals, lawyers’ fees, title insurance, and fire insurance. Every scenario is a little different, but plan to set aside 1.5% of the house purchase price for closing costs as a rule of thumb.

Mistake #4: Waiting For The Perfect House

Not to say you shouldn’t be picky for a house you love, but if you delay getting into the market while you wait for the dream home to hit the market at your price point, then you could be worse off financially. There is an opportunity cost to not being able to grow your equity. If you wait a couple of years while you search endlessly, a house that you liked may go up in price while you watch from the sidelines. Consider the benefits of building some equity for a few years until you have enough for the home you love.

Buying a home is one of the most significant financial transactions you will make. Don’t go it alone! I have helped many first-time homebuyers go through the process.

If you want to learn more about how to get into the real estate market as a first time homebuyer, contact me Nancy Bergman.

When buying your first home, there are more costs involved than you may expect. Between moving expenses, legal fees, inspections and taxes, purchasing a property involves a lot more than just saving for your down payment. It’s not uncommon for first-time buyers to skip on budgeting for these expenses and then get sticker shock when all of the additional costs pile up. 

Thankfully, first-time home buyers in Canada have exclusive access to programs to help offset some of the costs. From rebates to tax credits, there are a variety of initiatives available to support prospective home buyers on their journey to homeownership. 

Here, is the scoop on five first-time home buyer programs in Canada you can apply for when you’re ready to make the leap into homeownership. 

The Home Buyers’ Plan (HBP)

This federal program through the Canadian Revenue Agency lets you withdraw up to $35,000 tax-free from your registered retirement savings plan (RRSP) as a loan to build or buy your first home. 

In order to qualify for the HBP, you must be a first-time home buyer, have an agreement to buy or build, and intend to live in the qualifying home as your principal residence within one year after purchase or when the residence becomes habitable. You can make a single withdrawal from your RRSP or several within the same calendar year. 

You must pay back the HBP loan within a 15-year period to avoid penalties, starting the second year after the funds are first withdrawn. 

GST/HST New Housing Rebate

Targeted specifically at Canadians  buying a new construction property, the GST/HST new housing rebate allows you to recoup some of your tax expenses. 

To be eligible, you’ll need to have purchased or built a new home, or substantially renovated your own existing home that has a fair market value under $450,000 once construction is complete. The property must be your primary place of residence. Floating and mobile homes are also eligible, as well as land that is leased for at least 20 years. 

When you’ve applied for your tax rebate, be sure to keep a copy of the completed forms, original invoices and all other documents for up to six years. 

The First-Time Home Buyer Incentive

Overseen by the Canada Mortgage and Housing Corporation (CMHC), this new buyer incentive program aims to reduce monthly payments with a shared-equity mortgage with the federal government. 

New buyers can claim five or 10% of the property’s purchase price to put toward a down payment. Within a 25-year period, or when the home is sold, the same percentage value of the home is paid back. The homeowner can also pay back the incentive in full at any time. 

For the purchase of a resale property or mobile home, buyers can take a 5%incentive. If buying a new construction home, purchasers can take five or 10%. 

To be eligible for the First-Time Home Buyer Incentive, your household income must not exceed $120,000, your total borrowing cannot be more than four times your qualifying income, and you must meet minimum down payment requirements. 

The Home Buyers’ Tax Credit (HBTC) 

If you’re a first-time home buyer with a qualifying home you could receive up to $5,000 of the purchase from the Home Buyers’ Tax Credit (HBTC).

A qualifying home falls under most residential structure types, including single-family, semi-detached, condominium and townhouse properties that are complete or under construction. Shares in a housing cooperative granting you the right of ownership also apply. However, for any of these property types, you must intend to occupy the home as your primary residence no later than one year after purchase.

To file for the rebate, simply enter $5,000 on line 31270 of your tax return. If you’re applying for the rebate with a spouse, you can split the rebate between the two returns without exceeding the $5,000 limit. 

Land Transfer Tax Rebates

In Ontario, British Columbia and Prince Edward Island, first-time home buyers can receive a reduction on their land transfer taxes. Land transfer taxes are paid when the transaction closes, and are based on the purchase price. 

In British Columbia, buyers can receive $8,000 in rebates, earning the full amount up to a $500,000 maximum purchase price. Between $500,001 and $524,999, only a partial rebate is given, and there is no rebate for prices above $525,000. 

If you find rebates confusing, or are simply looking for advice on first-time home buyer incentives, a realtor, financial expert or mortgage broker can point you in the right direction of what will best suit your needs. 

I am experienced with working with all types of buyers, both new and seasoned, I am there to walk you through every step of the home buying process.

Once you’ve secured your dream home with an accepted offer, things start to get exciting. However, even if the property looks great, the only way to be sure everything checks out is to hire a professional home inspector. 

Home inspections can teach you so much about your new house, including how to maintain it and which repairs need to be carried out now or in the near future. Inspectors can also help uncover a property’s mysteries or even find nasty surprises you’ll want to know about – and possibly renegotiate on – before the sellers hand over the keys. 

Don’t Skip This Step

We get it – in hot markets where multiple offers are common, sellers may prefer dealing with buyers who have no conditions attached to their offer, including not insisting on a home inspection. However, forgoing an inspection is a bad idea.

If there’s ever an issue with the house that you want to go back to the seller about, without an inspection you haven’t done your due diligence so you’re not covered. 

Home inspectors assess a property’s main systems and check that the structure is sturdy, safe and to code. They can also alert you about necessary repairs or deficiencies. 

Inspectors are there to give a fair assessment of the building and, if he/she sees something serious, he/she will tell the buyer to get it looked into further or to obtain a quote for the repairs. It’s a great chance to learn about your new house.

The homeowners should accompany the inspector during the process, rather than wait for a written report. When on site, homeowners get all the information and, by the time the inspection is finished, they have a better understanding of what’s going on, so they can put the final report into context.

Can Discover DIY Projects Gone Wrong

Scroll through social media and it’s not hard to find examples of improvised repairs, such as DIY decks being held up with a single post, electrical configurations that can lead to fire hazards, or ill-conceived ideas where someone cut out part of a supporting floor joist to get more headroom in the basement. Inspectors see it all and will advise you what needs fixing. 

It May Uncover Unwanted Roommates

The last thing you want in your new home is a wasp’s nest or raccoons in the attic, bats in the walls or carpenter ants chewing your wood framing. An inspector takes a close look for signs of trouble and can help provide peace of mind.

New or Nearly-New Should Also Be Inspected

If you are purchasing a new property arrange for a pre-delivery inspection. This step is conducted with the builder before you take possession of your home, where you walk through the property and verify that all work has been completed.

The inpector will make sure all the t’s are crossed and the i’s are dotted. 

It’s always safer to get an inspection, because no one wants unwanted suprises.