At REMAX Condos Plus we understand that for a first time buyer, the process can be overwhelming. That's why we've compiled a step by step guide to get you on the right track.
Before any home search begins a new buyer will need a down payment. In a Conventional Mortgage your down payment is at least 20% of the purchase price. However, you can buy a home with as little as 5% down. Anything less than 20% of the purchase price for a down payment is considered a High-ratio mortgage. High-ratio mortgages need mortgage loan insurance which protects the lender against mortgage default. Mortgage Insurance can be provided by a few different companies such as CMHC, Canada Guaranty and Genworth. Mortgage Insurance Premium fees are determined by the percentage of your mortgage and can vary from 0.5% to 5.65%.
You can determine down payment options and CMHC premiums using our Mortgage Calculator
The next step in the buying process is getting pre-approved. Getting pre-approved for a mortgage determines how much a lender will be willing to give you. Most REALTORS® will not be willing to show you homes until you’ve met with a Mortgage Broker. At RE/MAX Condos, we have a Mortgage Broker*//link to the mortgage center//* in house for your convenience. When you sit down with a Mortgage Broker they will take a look at four things.
Pre-Approvals are normally good for around 90 days and you are guaranteed the lowest rate available during that time period. However, Keep in mind that pre-approval is not a guarantee. For example, if the property doesn’t appraise at or above the purchase price, you may not quality for the mortgage you need. This leads us to our next step…
There are over 40,000 realtors in Toronto so choosing your REALTOR® isn’t always an easy decision. The best thing you can do is choose a REALTOR® that you feel you can trust and that you are confident with. If you meet with someone that doesn’t feel like the right fit, move on. When you have found someone that you can work with you may be asked to sign a Buyer Representation Agreement. this ensures that your REALTOR® is working for you and in your best interests.
Now it’s time to decide what exactly you are looking for. This may seem like an easy question but it can be harder than you think. The first thing you should consider is the Big Three;
A few other questions you should consider are what features you need to have compared to what features you want to have. Discuss it with your REALTOR® so together you can find your perfect home.
So you’ve found your dream home, you have your pre-approval and down payment in hand, now it’s time to make your offer. Your REALTOR® will draft the offer and go over all the clauses and answer any questions you may have. When it comes time for negotiation, your REALTOR® will put your best interest first.
Once your offer is accepted there is still a lot to do before closing. If you purchased a Condo, your offer could be conditional upon the Status Certificate. Your REALTOR® will be able to refer you to a lawyer to read over the documents. If your offer is conditional on a home inspection your REALTOR® will also be able to refer you to a reputable home inspector. Finally, you will need to have the home appraised.
It’s up to your REALTOR® to make sure everything runs smoothly on closing day. This is the day you (or your lender) hands over the full amount of the home price and the deed gets signed over to the buyer. The buyer gets the keys to their new home and it’s time to celebrate!