What a First Time Home Buyer in Etobicoke Needs To Know

Part 1: Getting Your Finances in Order

So you’re a first time home buyer in Etobicoke (these tips work for all of Toronto as well 😉 )? Congratulations! The first question that I’m going to ask you before we start looking at houses is…how much house can you afford? If you don’t know the answer to that, this is where you start.

Mortgage Pre-Approval

Have no idea how to figure this out? Talk to your bank or mortgage broker. They will take your income, debts, and down payment info into account to help you figure out how much of a mortgage you can get approved for, which in turn will help inform how much purchase price you can afford. Don’t have a mortgage broker? Reach out and I can connect you with one of many trusted brokers I use.

Down Payment

This is how much money you’ve saved, or if you’re one of the lucky ones who have gotten a monetary gift from family, this is where you add up these totals to figure out how much money you are putting down towards the purchase price of your home, outside of the money you’re going to borrow from a bank.

RSP Home Buyer Withdrawal

When embarking on being a first time home buyer in Etobicoke and reviewing your assets for your down payment, don’t forget that if you’ve contributed to your RSP’s over the years, you’re allowed to withdraw up to $35,000 of your RSP’s to put towards your purchase – without having to pay withdrawal taxes or fees!
This is one of the governments ways of incentivizing people to purchase a home. If you’re a couple – that’s $70,000 you could be putting toward your down payment. Just remember; that you will have to pay this money back to your RSP in small increments over the next 15 years. Check out the governments website for more info.

AND ONE FINAL NOTE

There is one more option to you can explore in order to get help with buying a home. It’s called the FIRST TIME HOME BUYER INCENTIVE PROGRAM. Essentially, it is a shared equity program where the federal government will loan you 5-10% of the homes purchase price, interest free. The government essentially owns the value that they’ve lent you until you pay it back either when you sell, or within 25 years. As your home increases or decreases in value, so too does the amount that you have to pay back to the government base on the % that you borrowed. Click here for more information and to apply.

Okay! Now that you’ve got your finances in order its time to start shopping!
Check out my next article to learn more about what you need to know when looking for your first home!