Complete Guide to Buying Your First Home in Canada

Buying your first home is an exciting milestone, but it can feel overwhelming. This comprehensive guide will walk you through every step of the process.

Step 1: Assess Your Financial Readiness

Calculate Your Budget

• Gross Debt Service (GDS): Should not exceed 32% of gross monthly income
• Total Debt Service (TDS): Should not exceed 40% of gross monthly income
• Emergency Fund: Keep 3-6 months of expenses separate from your down payment

Down Payment Requirements

• Minimum 5% for homes under $500,000
• 5% on first $500K + 10% on portion above $500K (up to $999,999)
• 20% minimum for homes $1M and above

Step 2: Get Pre-Approved

Pre-approval gives you:

• Clear budget understanding
• Competitive advantage when making offers
• Rate protection (typically 90-120 days)
• Faster closing process

Step 3: Government Programs & Incentives

First-Time Home Buyer Incentive (FTHBI)

• Shared equity mortgage with government
• 5% for existing homes, 10% for new construction
• No monthly payments required

Home Buyers’ Plan (HBP)

• Withdraw up to $35,000 from RRSP
• 15 years to repay without tax consequences
• Both spouses can use if both are first-time buyers

Land Transfer Tax Rebates

• Available in most provinces
• Can save thousands on closing costs

Step 4: The Home Search Process

Working with a Realtor

• Choose someone experienced with first-time buyers
• Understand their commission structure
• Ensure they understand your needs and budget

What to Look For

• Location and neighborhood trends
• Property condition and potential repairs
• Future resale value
• Commute times and amenities

Step 5: Making an Offer

Key Components

• Purchase price and deposit amount
• Conditions (financing, inspection, etc.)
• Closing date
• Included items and exclusions

Common Conditions

• Financing: Protects you if mortgage falls through
• Home Inspection: Identifies potential issues
• Status Certificate (condos): Reviews condo corporation finances

Step 6: Finalizing Your Mortgage

Required Documents

• Employment verification
• Income documentation (T4s, pay stubs)
• Bank statements
• Credit report authorization
• Property details and purchase agreement

Mortgage Protection

• Consider mortgage life insurance
• Disability insurance for income protection
• Critical illness coverage

Step 7: Closing Day Preparation

Final Walkthrough

• Ensure property condition hasn’t changed
• Verify all included items are present
• Check that agreed-upon repairs are completed

Closing Costs (Budget 1.5-3% of purchase price)

• Legal fees ($1,000-$2,000)
• Home inspection ($400-$600)
• Appraisal fee ($300-$500)
• Land transfer tax (varies by province)
• Title insurance ($200-$400)
• Moving expenses

Red Flags to Avoid

• Stretching your budget: Don’t max out your approval amount
• Skipping inspection: Even new homes can have issues
• Ignoring additional costs: Property taxes, utilities, maintenance
• Emotional decisions: Stay within your predetermined criteria

Next Steps

Ready to start your home buying journey? Contact me for a personalized consultation where we’ll:

• Review your financial situation
• Discuss mortgage options
• Create a timeline for your purchase
• Connect you with trusted real estate professionals

Remember: Buying a home is a marathon, not a sprint. Take your time to make informed decisions.