The first step towards buying a home is to save for a down payment. You need to put down a minimum of 5% of the home’s purchase price and a minimum of 20% for homes valued at $1 million or more as a down payment.

Do you have a down payment saved? If not, you can use the Home Buyer’s Plan to withdraw up to $35,000 from your RRSP. You should save as much as possible for your down payment because it results in less interest paid overall, more equity in your home, a lower mortage loan insurance, and a lower monthly mortgage payment.

In addition to saving for a down payment, you also need to save approximately 3% to 5% of the home’s purchase price for closing costs. This includes lawyer fees, title insurance, home inspection, and land transfer tax.

Take the time to get your finances organized, while you are saving for your down payment. Pay down your debt if you have any car loans, credit debt, student loans, or a line of credit with a balance. Paying down your debt will have a positive impact on your credit score and debt service ratios.

This is also the best time to prepare your documentations because applying for a mortgage requires a lot of paperwork. Having everything you need right at your fingertips is useful if you find your dream house. It will help you move quickly through the mortgage approval process.

You will need a void cheque, other sources of income, current employer information, savings and investment statements, and proof of withdrawal from your RRSP if you are planning to use the Home Buyer’s Plan.

Do not make the process of buying a more more costly than it needs to be. Take the time to check if you are eligible for any grants or rebates. Below are some common programs available to first-time homebuyers:

– Home Buyer’s Plan: Withdraw up to $35,000 from your RRSP, tax free for a home down payment.

– Home Buyer’s Amount: A non-refundable $5,000 income tax credit.

– GST/HST New Housing Rebate: A partial rebate on the GST/HST you paid on the cost of your new home.

– Toronto’s Land Transfer Tax Rebate: If you are buying a house in Ontario, you may receive a partial refund up to $4,475.

Take your time to shop around for a great mortgage rate. Finding the lowest mortgage rate could save you thousands in interest over the life of your mortgage. Before you start applying and signing, you need to be as realistic as possible. It is important to have a good understanding of what you can afford in order to create a realistic budget.

Shopping around for a great mortgage rate is easy when you use a mortgage broker. A mortgage broker will have you complete one application, then shop it around to many different lenders, returning with the best offer and lowest rate for you. At worst, you will receive great personalized advice, if your mortgage broker is not able to return with a great mortgage rate.

Getting a mortgage pre-approval is free and does not commit you to a single lender. You will be able to find out how much you can afford to spend on a house, what mortgage interest rate is available to you, and how much your maximum monthly mortgage payment could be.

If you are able to find the best mortgage rate, you can lock in that rate for up to 60 to 120 days, depending on the lender.  This means that if mortgage rates rise, you will still be able to access the lower rate. If mortgage rates drop, your lender will honour the lower mortgage rate.

Keep in mind that the mortgage pre-approval amount is the maximum you may get. It does not necessarily guarantee that you will get a mortgage loan for that amount. The approved mortgage rate depends on the value of your home and the amount of your down payment.

The most exciting part of buying a home is house hunting. Now that you have a mortgage pre-approval, your maximum purchase price in mind, and a down payment for a home, you are ready to contact a real estate agent to help you find a home. Below are some house hunting tips so you are prepared when the right opportunity jumps at you:

– Avoid representing yourself and rely on the expertise of a real estate agent if you are a first-time homebuyer.

– Research the market in your ideal neighbourhood to make sure home prices and your maximum purchase price are aligned.

– Make a list of must-have and nice-to-have features for your future home.

First thing you will need to do is to submit an offer to purchase. However, you need to keep in mind that you may not be the only buyer to submit an offer. When your offer is accepted, you will pay a deposit to the buyer, which is applied against the home’s purchase price. Then, you will need to finalize your mortgage financing through your broker and arrange for a home inspection.

You will need to get help from a real estate lawyer to pay your down payment and transfer the title to the home into your name. This process can typically take up to 30-60 days depending on the terms of the offer to purchase. Once things are in place, you will receive the keys from your real estate agent. Now you are officially the owner of your very own home!