Buying your first home involves a lot more than just saving for the down payment. In this episode of Davelle Morrison’s First-Time Home Buyer Series, Davelle breaks down the costs Toronto buyers should prepare for and explains how to determine what you can realistically afford before starting your home search. One of the first steps is speaking with a mortgage broker or lender to get pre-approved. Davelle discusses how mortgage brokers can potentially secure a rate hold while you search for a property, as well as why working with a financial planner can help you establish a budget that keeps you from becoming house poor. She also explains why major financial changes, such as switching jobs or financing a new car, can affect how much mortgage financing you qualify for while you’re preparing to buy. In this video, you’ll learn about:
- How to determine how much home you can afford
- Mortgage pre-approval and rate holds
- Budgeting before buying your first home
- Why changing jobs can affect mortgage approval
- How car loans and leases affect mortgage qualification
- Toronto and Ontario land transfer taxes
- First-time home buyer land transfer tax rebates
- Legal fees and title insurance
- Deposits vs. down payments
- Closing adjustments for property taxes, condo fees and utilities
- Moving expenses
- Home and contents insurance
- Other closing costs first-time buyers often overlook
Toronto buyers also need to account for both provincial and municipal land transfer tax, which can represent a significant upfront expense. Davelle explains how the tax is calculated on a graduated basis and discusses rebates available to qualifying first-time buyers. She also explains the difference between your deposit and down payment. The deposit paid after an accepted offer forms part of your overall down payment, while additional closing expenses need to be budgeted for separately. Other closing costs can include legal fees, title insurance and adjustments for expenses the seller has already paid, such as condo maintenance fees, property taxes or utilities. Whether you’re planning to buy a Toronto condo, house or your first property anywhere in Ontario, understanding these expenses before you start shopping can help you avoid surprises when it comes time to close.
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We created My First Home to help Toronto first-time buyers understand the process in a practical, approachable way.
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Have a question you would like us to cover in a future episode? Leave a comment on the video or get in touch with our team.