As a first-time home buyer, you’re about to undertake one of life’s most exciting moments. Some of the tasks before you are practical, like getting your finances in order and sorting through your belongings. Others are fun and exhilarating, like visiting listings that could very well be your first home.
Where do you start? Such an impressive milestone needs a plan. Today, we’ll give you some valuable tips for buying your first home. Along the way, we might just convince you to put down roots in our favourite city, Kingston, Ontario.
Do you want to know more about living in Kingston? Get the full picture by reading Is Kingston, Ontario a Good Place to Live?
Steps to Buying Your First Home
Buying a home for the first time begins with preparation. First of all, a knowledgeable, local real estate agent is a must-have resource, as we can guide you through all the twists and turns and answer all of your questions. Expert guidance also allows you to avoid costly mistakes and streamline every other step.
Next, perform an in-depth, honest assessment of your income, net worth, and liabilities to create a realistic budget and expectations. Before you begin placing offers, you should also have funds for your closing costs and a sufficient down payment readily available. Our buying calculator can help you know what to expect.
Early on, we recommend visiting your bank or a mortgage broker to get a pre-approval for a mortgage. Many buyers underestimate the value of this step, but it offers real, tangible benefits:
- You’ll have an accurate estimate of how much financing you qualify for.
- You can lock in the lowest interest rate for the next 90 to 120 days.
The right real estate agent can streamline your home purchase and help make it a stress-free experience. Learn how to choose by reading 5 Questions to Ask Before Hiring a REALTOR®.
Your Home-Buying Checklist
With a clear idea of how much you can afford, you can begin asking the high-level questions:
- What type of house do you want? A condo, townhouse or detached home?
- Are you planning to stay in one place for the long term? Or is this just a stepping stone to build equity to upsize to a larger home later?
- What amenities do you want to be near?
- When do you want to move in?
- Are you prepared to handle any renovations or updates, or should your home be move-in ready from the beginning?
- Do you want a resale home or a new-build? There are advantages and disadvantages to both options, which your real estate agent will be happy to review with you.
Searching for Kingston homes for sale? Start here with our featured listings.
Location, Location!
Choosing your location is so critical to your decision and strategy that it deserves its own section. First, you choose your city, then you narrow it down to a more specific neighbourhood. Housing costs will likely play a major role, but lifestyle considerations are also imperative.
For example, many young buyers would love to settle in Toronto. We don’t blame them; the big city is full of excitement after all. However, real estate values here are also exorbitant, and not everyone wants to live in a noisy, crowded area.
If you were to set your sights on Toronto, you might be limited to a small condo, sometimes in a less-than-stellar neighbourhood. Some first-time home buyers get pushed out of this market altogether.
Now consider Kingston, and possibilities really begin to open up. If you choose to enter the market with a condo, your purchase becomes more comfortable. Buying at an affordable price point leaves more funds to enjoy your life while saving for your future.
If you have a mid-range budget, you might decide to skip the entry-level stage altogether. There’s no law saying your first purchase has to be a condo. In Kingston, we’ve seen many first-time buyers go straight into a detached house. Whatever direction you take, it’s nice to have options!
The more information you have before buying your first house, the better! The posts below will help you proceed with confidence:
- The Hidden Costs of Buying a Home
- Buying a Home: Separating Myths from Facts
- Buying a Home: 5 Tips to Get Started
First-Time Home Buyer Benefits in Canada
Saving for the down payment and closing costs can be an obstacle for many prospective home buyers. Fortunately, there are some government benefits to help you.
First Home Savings Account: Invest up to $8,000 per year up to a lifetime maximum of $40,000 into a tax-sheltered investment account. This reduces your taxable income for the year. When you’re ready to make a qualifying purchase, you can withdraw all funds, and there’s nothing to repay. The earlier you start, the more your investments will compound.
Home Buyer’s Plan: Do you already have an RRSP that you’ve been contributing to for years? The good news is you can withdraw as much as $60,000 to cover your down payment. Just remember that you do need to repay those funds within 15 years to retain the tax-free benefit.
Land Transfer Tax Rebate: Land transfer taxes in Ontario are typically the most substantial closing cost. These funds have to be paid up front to close your transaction; you cannot include them in your mortgage, which makes this fee particularly burdensome for first-time buyers. Enter the provincial rebate, which saves you up to $4,000 off the total amount.
First-Time Home Buyer Tax Credit: In the year you purchase your home, you can claim a $10,000 credit on your income tax return. This will reduce your amount owing by $1,500.
We hope you have enjoyed this first-time home buyer guide! It may seem like a long journey ahead, but with the support of your loved ones and the expertise of a local real estate team, you could soon achieve this celebrated milestone.
Do you have more questions about buying a home for the first time? Our Kingston real estate agents are standing by! Reach out to us at caldwellco@royallepage.ca or call 613.449.6588 today.
Meet Your Market Guides
Caldwell & co. is your all-in-one resource for everything real estate related in Kingston, from community highlights to market-shifting trends and hands-on transaction guidance.
