Ottawa First Time Home Owners – What You Need to Know
It is a very exciting time when we dream of owning our first home. Whether you saved enough for a condo or single detached home there are some breaks that first time homebuyers should know about.
Mortgage:
Your first step is to make sure you know how much mortgage you qualify for. This is an important step as you will be able to start looking for properties in your price range. For example, if you qualify for a $350,000 mortgage and you plan to put down $25,000, you can search for properties that are in the $375,000 range. It doesn’t necessarily mean you will be at the top of your mortgage qualifying range. A good real estate agent will be negotiating on your behalf and will try to get you the best price.
You will need to get mortgage approval from your bank, but check with a real estate broker also and this will help you decide how to get you the best mortgage interest rate dependant on your personal circumstances.
First-Time Home Buyers’ (FTHB) Tax Credit
This is a $5,000 tax credit that is offered to first time home buyers that you can claim on your personal income tax. You may get up to $750. in tax relief.
Home Buyers’ Plan (HBP)
This program allows you to withdraw up to $25,000 in Registered Retirement Saving Plan (RRSPs) for a qualifying home. Generally, you have up to 15 years to repay your RRSPs.
Land Transfer Tax
When you buy a property, you will need to pay land transfer tax. You may be eligible for all or part of the tax up to $2,000 as a first time home owner.
House Inspection
This is always a good idea to have the property inspected. You will know if there are any severe repairs that need to be done, mold or mildew and inspection on all electrical and plumbing. House inspectors range in price on average from $400-$650.
Legal Fees
Legal fees range in price but a good rule of thumb is that the fees will cost anywhere from $500 to $1500 on average.
Adjustment Costs
Your lawyer will have to calculate adjustment costs for utility costs, property taxes or any metered services like hydro etc. They will make sure that everything is balanced out between owner and seller.
Title Insurance
Although this insurance isn’t mandatory it will protect you against mortgage fraud, identity theft and forgery. The cost is dependent on the price of your home and is well worth the investment.
Canada Mortgage and Housing Corp. (CMHC) Mortgage Loan Insurance
If you plan to put down less than 20% of the cost of your home, you will need to pay CMHC mortgage insurance which will be finance as part of your mortgage. This insurance protects lenders in case of mortgage default but it also allows you a minimum 5% down payment.
House Insurance
You will want to make sure that your home will be protected when you move in. Depending on the type of coverage you want expect to pay around $800 per year. Check with a house insurance broker to find the best insurance company for your circumstances.
Now you have the tools to know what you can expect to pay or get in rebates when you purchase your first home in Ottawa. Now, the next most important step is to get an experienced real estate company that has your best interests at heart.
The Anne Winch Ottawa Real Estate Team can help you find your first home. They understand your concerns and questions you may have as this is all new to you. That is why they have prepared Seven Steps to Ottawa Home Buying to simplify the process for you. Just call or email the Winch Walton Team for any of your home buying needs.
Contact the Winch Walton Team for all your Ottawa real estate and free home staging needs.