5 main steps to buying a property

There are only a few short steps to buying a property, which means there’s not a lot of distance between you and your future home.

A good first step to take before buying a new home is to get pre-approval for a mortgage.

• This will establish your borrowing capacity in view of your income, monthly expenses, debts and credit rating.
• Pre-approval doesn’t guarantee an interest rate, but it does help you fix your budget for the house hunt.

Regardless of your maximum pre-approved amount, you still have to make sure you can handle the mortgage. Do your calculations carefully.

• Down payment. You’ll have to pay up front at least five per cent of the purchase price of the property. The down payment can come from your personal savings or your RRSP savings. The Home Buyers’ Plan allows for the withdrawal of up to $ 25,000 from your RRSP under certain conditions.

• Startup costs. You’ll have to plan for various professional fees and additional costs associated with buying a home: appraisal fees; inspection fees; lawyer or notary fees; mortgage insurance and home insurance; sales tax on a new home; municipal taxes, school taxes and the welcome tax; adjustments of taxes paid by the seller; moving expenses; new furnishings and appliances; and connection to essential services.

It's time to go house hunting. Remember that you’re looking for a house or condo that will still meet your needs beyond the next year or two.

• Hiring a real estate agent is useful, although it’s not mandatory.
• Once you find a property, you’ll negotiate the price and terms of sale and submit a bid.

If the bid is accepted by the seller, you’ll have to formally apply for your mortgage loan.

After your mortgage application is officially approved, you’ll have the deed transfer done by a notary or lawyer.

• Several documents have to be submitted by both buyer and seller.
• This is the contract signing that will seal the deal and confirm you as the new owner of the property.
• The funds will be transferred to the seller by the financial institution that granted you the loan and you will start your mortgage payments.

Now you know all the steps to buying a property. Enjoy living in your new home!