First-Time Home Buyers

Being a first-time home owner can be a new chapter of your life, so we want to be a helping hand relating to this big next step. We would like to educate and guide first-time home buyers in making an informed decision, so we have implemented this website with extensive information and resources that can assist a first-time home buyer throughout the home buying process.
First-time home buying is typically considered as a stressful and/or difficult decision. However, Pratham believes this is just a myth as more and more people are becoming home owners rather than renters. Also, there are many programs (first-time home buyer programs) in Canada that assist first-time home buyers enter into the housing market.
As any prudent home buyer, it is important to learn about the process of first-time home buying from start to finish. Below you will find some common first-time home buyer FAQs and it will cover important topics such as; tax benefits, rebates, first-time home buyer programs, home buying process, minimum down-payment and more. Additionally, you can browse through the main tabs (Buyers, Sellers, Condos, Investors, Mississauga, Helpful Resources etc.) to learn more.

Are you a First-Time Home Buyer looking to buy in Mississauga? 
Pratham Kalia has helped numerous first-time home buyers move into their dream home in Mississauga and the surrounding areas throughout his career from; newcomers, families, individuals, couples and millennials.
Call 647-606-2704 to learn more about a FREE first time home buyer seminar

Pratham is a fantastic realtor! He is very knowledgeable, resourceful and friendly. He exceeded my expectations. Thank you for being so amazing throughout the entire process. Wendy S.
Below are some Frequently Asked Questions (FAQs) that will be covered:  Do buyers have to pay any real estate commission?  
Typically, buyers do not pay real estate commission. This example can be based on a standard scenario where both the buyer and seller are being represented with their own real estate agent. The real estate commission is usually paid by the seller to the buyer's brokerage either directly or through the listing brokerage. However, a buyer can be asked to pay commission to the buyer's brokerage if the buyer brokerage is not paid any commission from the listing brokerage. 
What questions should I ask a real estate professional before hiring them to represent me as a first-time home buyer?
As a first-time home buyer, it is important to hire a real estate professional that will be the best fit for you. If you are in the early stages of searching for a real estate professional, here are a few questions that you may want to ask before hiring a realtor®: Are you working full-time or part-time? How long have you been in the real estate business? What markets do you specialize in? Do you have experience working with first-time home buyers? Are you going to be representing us as clients or customers? Are you going to be emailing us new listings for homes that are of interest? How many hours notice do we need to provide in order for you to show us a property of interest?
What is a Buyer Representation Agreement?
This is a legal document that forms a contract between a buyer and a real estate brokerage for a set time period. This document allows the real estate brokerage to represent the buyer in the purchase of a property. If the buyer is a client of the real estate brokerage, then RECO (Real Estate Council of Ontario – Ontario’s governing body) REBBA Code of Ethics requires there to be a written Buyer Representation Agreement presented to the Buyer for signatures before an offer is presented on behalf of the buyer. Click here to view an easy-to-read Buyer Representation Agreement, the red highlighting breaks each section into simple English.

How much is the minimum down payment?
When purchasing a home, this is typically one of the largest expenses. The minimum down payment is 5% of the purchase price, with the increments of 5%, 10%, 15%, 20% and anything higher than 20%.

If the purchase price is $500,000 or less the minimum down payment required is 5% or $25,000. If the purchase price is between $500,000 and $999,999 then the minimum down payment would be 5% of the first $500,000 and 10% of any amount over $500,000. If the purchase price is over $1,000,000 the minimum down payment would be 20%. Overall, the minimum down payment is dependent on the purchase price, credit history, income etc. 

A down payment of 35% or more of the purchase price applies to Canadian non-residents and newcomers who are not employed or with no established credit history.

Why is a mortgage pre-approval important before searching for a home? 
This is an important first step when starting a home search, as it gives a clear indication on affordability. By indicating the higher limit and how much can be borrowed, the mortgage pre-approval letter will give confidence to the home buyer and real estate professional on specific properties that are within the range of the mortgage pre-approval, which can simplify the home search. 

Is there a first-time buyer Land Transfer Tax Rebate? 
Yes, if you qualify as a first-time home buyer there is a Land Transfer Tax Rebate of $4000. Certain terms, conditions and restrictions may apply, please speak to a professional real estate lawyer and visit the official Government of Ontario website to get more information. Under the helpful tools tab, there is a land transfer tax calculator to help get an estimate on land transfer tax, based on the province, city and property value. 

Are there any government rebates for home buyers and home owners? 
Yes, here is a list of a few government rebates for home buyers and home owners, which include: First Time Home Buyer Incentive, Home Buyers Tax Credit (HBTC), Land Transfer Tax Rebate, Home Buyers Plan (HBP), Ontario Energy and Tax Credit, GST/HST New Residential Rental Property Rebate. Learn more: Government Rebates for Home Buyers and Home Owners.

Is there an advantage working with a buyer agent? 
There are many benefits of working with a buyer agent. If you hire Pratham Kalia as a Realtor®, you are ensured to have your best interests taken care of. Searching for the right home, preparing an offer, negotiations and having a smooth and easy closing. Being a local and experienced Realtor® certainly has benefits.

How much does a home inspection cost? 
The average cost for a home inspection can cost approximately $300-$350. This cost can vary based on the location, property condition and size of the house. A condo home inspection can cost approximately $225-$275, again based on the location, property condition and size of the condo. 
What are legal fees and how much does it cost?
Legal fees are the cost you pay when you use a lawyer (can vary based on a flat fee, hourly rate etc.). A buyer can contact a real estate lawyer and obtain a quote on their fees and it is very important to clarify their total legal fees including disbursements. Disbursements are costs that consists of items such as; title search, couriers, photocopies, bank charges etc. Legal fees depend on various circumstances (purchase price, time, situation etc.) but in general legal fees can cost anywhere from approximately $1,300-$1,800.
What is mortgage loan insurance?
This is a one-time insurance premium that is added to the mortgage amount for a down-payment that is less than 20%, as a down payment that is less than 20% is considered as a high-ratio mortgage. It is important to remember that mortgage loan insurance protects the lender, in case the buyer cannot make payments.
What is a deposit and how much is it?
When a buyer has decided to proceed with a home and is ready to submit an offer with their real estate professional, at this instance the buyer may need to put down a deposit. Depending on the outlined structure of the offer, the deposit can be submitted upon acceptance of the offer, with the offer or otherwise described within the offer.
There is no specific amount that is required; however, the deposit amount will depend on the purchase price, the area of the property and the buyers own circumstance. The total deposit amount submitted by the buyer is considered as a part of the buyers down payment, as it is deducted from the total purchase price. 
How do I determine the total amount for home buying costs?
There are different types of home buying expenses typically range from one-time costs, closing costs and on-going costs. It is important to note that home buying expenses will vary based on the area, property, purchase price, builder new or resale and more. For more information, you can read home buying expenses where we have discussed each in greater detail.
What is closing day?
Closing day is when the buyer takes legal possession of the property. If you have made it this far, congratulations as this is the date you will be picking up the keys to your home. It is important to note, on or a few days before the closing date the buyer will need to meet with their lawyer or notary to provide the down payment (less the deposit) and other closing costs. You can view moving checklist; we have written some helpful reminders and steps that may assist with your move and/or closing.
What is an appraisal?
A home appraisal is conducted in order to find out the value of the property. When a buyer is purchasing a property and requires a mortgage loan the banks would like to determine and assess the property’s value as the banks do not want to loan more than the property is worth. The home appraisal can be conducted via an online system or a professional home appraiser may be required to physically view the property for an in-depth assessment of the value. Items such as the MLS® listing, property tax assessment and information, square-footage of the property, APS (Agreement of Purchase and Sale) can be provided to your mortgage professional to help speed up the process.

If I have a work permit can I still purchase a property? 
Yes, you can still purchase a property on a work permit. It is important to note however, if you purchase a property on a work permit then you will need to pay the 15% Foreign Buyer Tax that has been implemented. If you are in the process of obtain a permanent resident (PR) then this amount is reimbursed to you upon receive your PR.
What is the down payment required without at least 2 years of employment history?
This will be dependent on this specific situation. But if the home buyer is able to put down at least 35% of the purchase price as a down payment then the buyer may still be able to qualify for the mortgage. However, we it is advised to speak to a professional as this is based on a case-to-case basis.
Is property insurance expensive?
Typically, home insurance can cost anywhere from $30 to $120 per month. It is important to note that this number is just an approximate as home insurance will be dependent on many factors. Property insurance protects you just like any other insurance company where you pay a premium in exchange for a coverage. The cost on property insurance may vary based on location, postal code, property type, property size, property age, number of inhabitants, special use, past claims, replacement cost, swimming pool, proximity to a fire hydrant and more.
How much should I allocate for closing costs as a first-time home buyer?
This will depend on the specifics (purchase price, type of property, resale or builder new, location, lawyer etc.). But, in general anywhere between 2% and 5% of the purchase price. For example, if the purchase price was $450,000 then you will pay $9000 to $22,500. We have written in detail a breakdown of home buying expenses and closing costs which you can also give a read for more information.
Are there any key factors to look for in a neighbourhood?
Moving into the right neighbourhood is crucial, as a buyer you may want to be mindful of the following regarding the neighbourhood: age, reputation, future development, taxes, convenience stores, schooling, public transportation, parks, entertainment and shopping, type of properties, environment and more. 

Where can top Mississauga schools be found?
A list of top elementary and secondary schools can be found on the Fraser Institute website. If you are planning to buy in Mississauga, contacting the Peel District School Board is also recommended to get more information of a school. Pratham Kalia finished all of his schooling in Mississauga (elementary, middle, secondary and post secondary). 

How to find homes near top Mississauga Schools? 
You can find out top Mississauga schools by rating on the Fraser Institute website. Then by selecting a few schools and asking your real estate professional to help find you a home near the specific schools. To ensure that the home address falls in the school boundary, you can visit Peel School District. On this website, public schools can be found near the specified address of where you are looking to buy a home. If Catholic Schools are of preference, then please visit Dufferin Peel Catholic School District

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