Buying a new home is highly liberating, but all your efforts could go south real quick if you are unaware of the benefits or demerits of the buying process in Canada. For all the new home buyers in Canada, buying your home is much more than just paying the money or getting a loan approved to buy it. It is essential to consider what you afford at present and what you will be able to do if you are dreaming of expanding your family or if your property requires significant repair in the next few years. It is undoubtedly a good feeling to buy your dream home if you have been saving up for years; however, buying a home requires a long planning time.

The Right Time to Buy a Home in Canada

Everyone's life is different, so the right time to buy a home varies depending on several factors for new home buyers in Canada. To determine whether it is a good time for you to buy a new home, here are some tips that you might find helpful:

1. Down Payment: In Canada, the minimum down payment on a house that costs $500,000 or less is 5%, and the home’s purchase price determines it. So, when you plan on buying a new home, always make sure that you have enough money for the down payment. You would indeed be emotionally invested in your home; however, you should be financially ready too. Apart from the down payment, you will also have to pay for several other associated costs, which is why only having the amount for the down payment is not enough.

2. Getting a Real Pre-Approval: Once you have found your dream house listing, it is time to get pre-approval, not from the relator but from your bank's mortgage broker or mortgage specialist. Once you find your lender, make sure to sit down and break down the numbers. It will help you determine whether you would be able to spend that much money for an extended period of time. Once you get the pre-approval from your lender, you should move forward to the next steps.

3. Know your Numbers: If you are buying a home for the first time in Canada, you might have a small down payment because you are stretching thin so that you can move into the new house. It is important to remember that when you buy a home, there are several other additional costs related to it, and you cannot escape them. You should also make sure that you have the resources to handle all the extra costs that you will have to deal with while buying a house.

4. Shop Around: Whether you are looking for a mortgage lender or a new home, do not hesitate to shop around. If you never look at the available options, you will never know which is the best choice for you. When it comes to applying for a mortgage, you can either visit your bank to talk about their mortgage programs or visit a private finance firm to get the best deal.

5. Right Motivation: Most young people today buy a new house because they think that society will consider them a failure if they do not buy a home within a certain age. However, with a mindset like that, with thin margins of their finances can backfire if you are unable to pay the mortgage on time.

6. First-Time Buyer Benefits: If the home you are planning to buy is going to be your first home, Canada’s Home Buyers' Plan (HBP) allows you to borrow a tax-free amount of $35,000 from your RRSP to use it as a down-payment. The first-time buyer incentive also offers first-time buyers to reduce their monthly mortgage payments by applying for a 5% or 10% shared equity mortgage with the Government of Canada.

Minimum Down Payment Rule in Canada

The minimum down payment rule allows you to determine how much you should save up for your first home. Of course, depending on the price of your home, the down payment will vary too, however; here is how you can quickly determine the down payment of your dream home:

1. If the home you intend to buy is lower than $500,000, you should be able to pay at least 5% as a down payment.

2. If your home’s price is between $500,000 to $999,999, the down payment will be 10% with an additional 5% for value below $500,000.

3. If your home is valued at more than a million, you should be able to afford 20% of the home’s value as a down payment.

These are only the minimum down payment values, so anything you pay above this will be better for you in the long run when you are repaying your mortgages. It is vital to find a mortgage that works perfectly for you, whether it is a closed/open, conventional/high ratio, or fixed and variable rate mortgage.

Best Mortgage Online is an online platform that has helped many new home buyers in Canada find their dream homes and helped them connect with world-class mortgage lenders. Their clients have enjoyed top-quality services when it comes to choosing the best mortgage lender in Canada.