You have just arrived in Canada and are dreaming of buying your own home? Here is a text that will be very useful. Feel free to share it on your social networks and email with your loved ones and members of your community.
It is important to understand how the Canadian system works. It is not so different from other Western countries, but there are nuances and peculiarities.
First, target your needs
Once you have determined the number of rooms you need, the neighborhoods that interest you, and the amenities you want to have close by (grocery store, school, public transit, park, highway, etc.), you’ll have to stop by the type housing that interests you.
In Canada, there are single-family homes, cottages, townhouses, condominiums, multi-units, and so on. You have the choice between new, recent or older buildings.
How much can you afford?
Although everyone’s dream is to pay for their home entirely, this is rarely possible. It must be said that the average price of a home in 2016 in the Quebec metropolis is $ 363,000. And this, not to mention the cost of electricity, municipal and school taxes, telecommunication costs, maintenance etc. So, usually, we will finance the purchase of his condo or his home for a decade or more. At most, the amortization will be done over 30 years.
Then, the buyer must be able to deposit 20% of the price of the property as a down payment . In this case, it represents $ 72,600. This is an important sum, I agree. When that money can not be collected, CMHC (Canada Mortgage and Housing Corporation) is used. This parastatal agency ensures loans with a down payment of less than 20%.
For a premium payable (usually between 1.8% and 3.6%) at the time of purchase, CMHC will guarantee that the debt will be honored. The minimum bet is 5% for residences of less than $ 500,000. Try the calculator “How much can I afford?
The main expert in the field, the one who can help you to achieve your dream is the mortgage broker . The latter will be able to assess the acceptable limits with you and gather the necessary so that your file can be accepted at a financial institution.
I strongly recommend that you determine your budget and understand the requirements with the mortgage broker before you even think of visiting and submitting bids. This will save you a lot of disappointments!
In order to be able to evaluate the maximum loan that can be granted to you, the institutions will require to know your credit report. This is neither more nor less than your report card as a payer and borrower. Generally, it takes a few years for a Canadian citizen to have useful data in his credit file. It starts with a fixed address, a stable job and a bank account.
Then, to demonstrate your ability to manage your finances, consider how you manage your credit card and financial responsibilities. No need to have multiple cards or to have a very high margin. Only one is enough, but remember that if you inflate too often to its maximum or worse, if you skip a few payments, it will ultimately hurt you by tainting your “score” in the credit report.
On the other hand, if you pay your telephone, electricity, rent and car rental / loan bills with rigor and on time, you will reassure the lenders.
For a newcomer, income, employment stability and credit history are the main keys to homeownership.
The accessible dream
Once the mortgage broker has successfully pre-approved your file, you can begin your residency search. If this is your first shopping experience, an experienced real estate broker can share his knowledge of the different neighborhoods and tell you about the particularities of each building. He knows the current dynamics of the market and will negotiate the price of the coveted house.
Contrary to popular belief, you will not have to pay it. He will get his commission from the seller. In addition to identifying houses of interest, he will see to plan for you visits and ask the technical questions most likely to avoid complications and trouble. It is better to work with one agent. Meet several to select the one who understands your requirements and with whom the communication is clear and clear.