Buying Your First Home

It’s never too early to assess your credit rating; the sooner you resolve any issues, the easier it will be when applying for your mortgage. To help boost your credit score, pay down credit card debt (aim for a balance of less than 25% of the card limit), don’t make large purchases on credit, and don’t apply for a loan (including car loans).

Having a mortgage pre-approval is highly recommended, especially if you’re buying your first home. Not only will it help you determine your price range, but when you find your dream home, you won’t risk another buyer putting in an offer before you. Pre-approvals are free, have a guaranteed interest rate, and a written term of 90-120 days.

If you can make a 20 percent down payment, not only will you save thousands in interest, but you won’t have to pay for CMHC’s mortgage default insurance which can run up to 3.25 percent of the loan’s value. When you’re buying your first home in Ottawa, you can also use up to $25K from your RRSPs with 15 years to return it. It’s valid for both yourself and your partner which means you can get up to $50K tax-free together.

Many first-time homeowners don’t budget for costs associated with closing, which may add up to 2-4 percent of your total home cost. These include home inspection fees, lawyer’s fees, property transfer tax, appraisal fees, title insurance, and property and fire insurance.

Starting January 1, 2017, the land transfer tax rebate for those buying their first homes in Ottawa doubled to $4,000, which removes the land transfer tax from the first $368,000 of the purchase price for Canadian citizens and permanent residents. Another benefit of being a first-time home buyer is an additional tax credit of $750.

You may not find everything you want in your first home, so it’s useful to make a list of the features that you must have and those that aren’t as important. This will save time when you’re comparing homes and may include the number of bathrooms, finished basements, location, proximity to work, etc.

When you’re buying your first home in Ottawa, don’t end up “house poor” and buy outside your budget. RRSP contributions, child care, and tuition, as well as homeownership expenses such as property taxes and upkeep, should be accounted for. Also, maintain a separate fund for home repairs and emergencies in the off chance that you end up out of work for several months.

As you search for your home, your main concerns should be structural and mechanical conditions such as the roof, plumbing, and hot water tank, etc. With my background in home construction and renovations, my insight into these areas is invaluable and will protect you in your investment. Be prepared to do minor repairs and don’t concern yourself with areas such as carpets, wallpaper, painting, and cabinetry—these can all be upgraded in time.