First-time buyers plan: 8 steps to buying smart
Navigating the world of Canadian home buying
Step 1: Figure out how much you can afford.
Falling in love with a house you can’t afford can be heartbreaking. Avoid disappointment by figuring out your budget before you start looking.
- First, decide how much you can afford for your down payment. The Home Buyers Plan lets you withdraw up to $25K per person (or up to $50K per couple) from your RRSPs – tax-free – to be repaid over 15 years. More on that here . The bigger your down payment, the less principal you will owe, and the less interest you will pay.
- Don’t forget about closing costs, like insurance, legal fees, home inspection costs, land registration and land transfer fees. Add those to your moving expenses and service hookup fees, and they can add up surprisingly fast.
- Your monthly housing expenses (mortgage, taxes, heat, etc.) shouldn’t use up more than 32% of your income. (If your combined monthly income is $5000, for example, 32% of that is $1600.) If you have car payments or credit card debt, the rule of thumb is that debt repayment shouldn’t be more than 40% of your income.
- Get pre-approved for your mortgage. It’s a good way of finding out how much you can borrow – and it speeds up the process once you’ve found the home you want to buy.
Step 2: Figure out what type of home is right for you.
Step 3: Decide where you want to live.
Living in an area you like is as important as buying a home you love. Do you want a busy urban lifestyle, a house in the ‘burbs, or a quiet place in the country? Do you want to walk to work or are you okay with a longer commute? Do you need to be close to good schools? Rec facilities? Shopping?
Step 4: Start looking.
Go to open houses. Visit mls.ca. Check the classifieds. Drive around neighbourhoods you like looking for For Sale signs. Talk to your REALTOR® about your needs and start looking at properties.
Step 5: Build a team.
Put together the right group of experts to help you buy. Start with a REALTOR® you trust, then look for a reputable lender or mortgage broker, a lawyer (or a notary in Quebec), a home inspector and an insurance broker. Your REALTOR® works closely with all of these professionals, and will be happy to recommend people you can depend on.
Step 6: Make an offer.
You’ve found the perfect place – now it’s time to make an offer. An offer to purchase includes the purchase price you’re offering, chattels to be included in the purchase (like appliances or light fixtures), the amount of the deposit, the closing date and any other conditions.
Your REALTOR® will help you prepare your offer, and will present it to the vendor, who will either accept it or make a counter offer (which asks for a higher price or different terms). You can accept or reject the counter offer. If everyone agrees, the home is yours. If not, you can make another offer, or you may have to keep looking.
Step 7: Get a mortgage.
Once you’re approved, you’ll need to decide what type of mortgage works best for your needs. Will you go with a fixed or variable interest rate? Will your mortgage be closed or open? What will your amortization period be? Will you make payments monthly, biweekly or weekly? Your mortgage broker or lender can help you find a mortgage that suits your needs – and saves you the most money in the long term.
Step 8: Move in and enjoy!
Trademarks owned or controlled by The Canadian Real Estate Association. Used under licence.
Using Your Fireplace Safely
A fireplace is a great feature in any home, and can create that warm, homey feeling on a cold winter evening that every homeowner dreams of. Whether you have a gas fireplace or a wood-burning fireplace, there are a few important precautions you should take and safety measures to follow every time you use your fireplace.
Keep The Fire Contained
Especially if you have an older home, you should verify that the fireplace and hearth are up to code. The hearth is required to be a certain size to prevent sparks or embers from the fire hitting the carpet or wood floors and starting a fire. You should also ensure that you have appropriate metal doors or a mesh curtain that will keep the fire and any sparks inside the fireplace itself.
Keep anything flammable away from the fireplace, including paper, blankets, furniture, or anything else that could easily catch fire. If you have a wood- burning fireplace, keep the wood in a spot where a stray spark or emberwon’t reach it. The same goes for kindling or anything you use to start the fire.
Maintaining The Fireplace And Chimney
In a wood-burning fireplace, a substance known as creosote can build up on the inside of the chimney, putting you at risk for a dangerous chimney fire. Every year before the winter season begins, you should have a professional chimney sweep clean out your chimney. They should also inspect everything to ensure your fireplace is functioning properly. Be sure to clean out ashes and soot from the fireplace regularly; this is recommended every time you use it.
Even with a gas fireplace there is some maintenance to consider. You should have a chimney sweep perform a yearly inspection and cleaning of the inside of your fireplace, especially in hard to reach places like the fan. They should also make certain that the gas lines and ignition switch are working properly.
Fireplaces And Children
If you have children, use caution with your fireplace. Never leave a child unattended in a room with a lit fireplace. Be certain that lighters and matches are always kept well out of reach. Before you start the fire burning season, sit down with your children and discuss the safety rules for the fireplace, making sure they understand the dangers.
Your fireplace can provide warmth and ambience, and will serve you well for a long time as long as you take care of it. Keep up on maintenance and ensure that everything is safe and up to code before you use your fireplace.