If you are new as a foreigner in the real estate field, you must wonder how you would buy a house in Canada. Worry not about it. Let’s see the main steps of buying property in Canada.
1. Get prepared by saving for a down payment
When you really want to buy a property, you need to be prepared by taking baby steps first. And, you can initiate doing so to save for a down payment.
A down payment is referred to the amount of the property's buying price that the purchaser supplies at the time of purchase.
A down payment + mortgage loan = property purchase price
There are different acceptable sources of this payment. In Canada, the buyer has to put down at least 5% of the home purchase price.
Usually, it is good to put aside so far as possible as a down payment. This is because when the payment is larger, the buyer can get the following benefits –
Along with a home down payment, you will also have to save 3% to 5% of the home’s purchase price that you will have to pay as closing costs. The common closing costs include land transfer tax, lawyer fees, title insurance, and home inspection.
2. Decide about the place and buying property
Deciding about the place and type of property you want to buy is a significant step you cannot miss. The place and type are closely related to get a great deal and your future outcomes. So, when you have a clear picture of your property objectives, it will help you to assess the worth of all the consequences. You can then expect according to it and even decide if you would proceed with it or not.
3. Organize your finances and paperwork
Another important step is to organize the finances and paperwork. In this step, you must pay down all your debts (Credit debt, student loan debt, car loans, and more) if you have any. While decreasing the debt level will help you have a favorable result in your credit score. Besides, it will also be favorable for your debt service ratios. With fewer debts, you can borrow more for your mortgage at ease.
Then comes a lot of paperwork when you will apply for the mortgage. The documentation you will need is –
So, it will save your time if you start preparing to organize these papers from before.
4. Check for rebates and grants
You will have to make sure that you are not spending more money than needed to buy a house. For this, you will need to take out time to check your eligibility for any rebates or grants. The first-time homebuyers usually go for some available programs to make the purchasing procedure much costlier. These programs are –
5. Search for a good offer to purchase
You will have to hunt for houses and pick a suitable one to give you a reliable offer to buy it. This is when you are ready with finances and have an idea about your house purchase price range. Contacting a real estate agent is an ideal move at this point, and then you can begin your house hunting.
The real estate agent will help you search for the type of house or neighborhood you like better. If you are buying a home for the first time, it is good for you to rely on a specialized agent. Know your flexibility and research the desirable properties with their help. And then you will be ready to get going with the competitive market.
6. Get a mortgage pre-approval
After the seller accepts your offer and other conditions, a professional person will work with you to decide your mortgage approval.
Mortgage pre-approval is actually free. It does not commit you to a single lender. It is also a low-risk method.
7. Grab an offer and close the deal
At last, when you will find a house that matches all your criteria, you will have to grab the offer. For this, you will have to submit an offer to purchase. Once they accept your offer, you will pay the deposit and finalize your mortgage financing with the help of your mortgage broker. Then, you can arrange for a home inspection. When the financing is secured, pay your down payment and transfer the title to the home into your name, taking help from a property lawyer.
This process will take about 1-2 months, and then you will become the official owner of your desired property!
Looking forward to starting a new life in Canada? Leave us your details, and an esteemed team from IQI Canada will be in touch to guide you to take that step.