Buying a House as a Newcomer to Canada
Canada welcomes thousands of new immigrants every year, who will call Canada their home. North York and Richmond Hill are two very popular areas of the Greater Toronto area full of Iranian immigrants. The Canadian housing market is one of the strongest around the world and a great place to place your assets. The following points will help you think about your journey.
Getting A Mortgage
To purchase a house you will need to obtain financing through mortgage, unless you are paying in all cash. Before you start to look for a house, it is important to get a pre-approval from a Canadian lender. This will give you the power to know exactly how much you qualify for and make shopping around for a home much more effective. Loans can be given from major Canadian Banks or other lenders. A good option is to work with a mortgage broker who will guide you on the different programs offered by various lenders. The banks and CMHC (Canadain Mortgage and Housing Commissions) often change lending guidelines for permanent residents and newcomers. It is always best to speak to a specialist to see which programs work with your case. You don’t need to have an established credit history to get a loan here in Canada, but having good credit will help you with better interest rates.
To get a loan you will need to provide a minimum down payment in order to obtain your mortgage. This can range from 5%, if you already have a Canadian employment and credit history to 35%, if you have no history. Again, it is best to talk to a mortgage specialist or mortgage broker to help you determine what you qualify for based on your personal situation.
If your down payment is less than 20% of the home’s purchase price, you’ll be required to Mortgage Loan Insurance which will roughly add an additional 1-3% to your mortgaged amount. This insurance helps protect banks and lenders against homeowners not paying their loans. It also helps new home buyers purchase a home with a minimal down payment and allows them to get a better interest rate.
For purchasing a home you should budget up to $1500 - $2000 for legal fees for lawyers that will help close the transaction. This is if the Agreement of Purchase of Sale does not get over complicated.
Land Transfer Taxes
Land Transfer Tax fees are to be paid on closing, and can vary based on the purchase price of the home. You are responsible to pay Provincial Land Transfer Tax and an additional Municipal Land Transfer Tax if the property you are buying has a Toronto address. You do not pay Municipal tax if you purchase a property in Richmond Hill for example, this can save you thousands of dollars. You can calculate Land Transfer Tax Here.
Inspection fees are estimated around $200 - $500 in cost. The home inspection process helps you to evaluate the structures and systems in the home and provide the buyer with a written report. Inspection is not mandatory but it can give home buyers peace of mind as they become aware of any issues with the home before deciding to purchase.
It is important to set aside extra cash for miscellaneous costs that will certainly arise. Such as Moving Costs, Home Insurance, Maintenance and Repairs.
Are there incentives for first time Home Buyers?
There are opportunities for First Time Home Buyer Incentives for Canadian citizens, permanent residents and non-permanent residents who are legally allowed to work in Canada. Reach out to me for further details. One example is getting a rebate of the land transfer tax.
Can People With Work Permit or Study Visa Buy Property in the Greater Toronto Area?
If you buy immediately upon arriving in Canada, you will be hit by 15% Foreign Buyer Tax. However, this amount is reimbursed to you when you get your Permanent Residence (PR). You can speak to a lawyer or professional accountant regarding this tax
As an award winning, experienced real estate agent that has lived in Canada for over 30 years, I have first hand experience and knowledge of the city and neighbourhoods. I always keep the communication channels open and honest, so I can accommodate your needs. I will guide you through the entire process, no questions are bad questions. I will always have answers for you and make you feel comfortable. I have worked in diverse communities in Toronto and have a unique perspective when it comes to understanding the city.
If you want a free consultation please feel free to contact me directly at Sara Rahimian 416 624 8709
Disclaimer This Article if for educational and information purposes only. Author does not accept any responsibility for the accuracy of information. These views are based upon the best available information at the time they were written and are not intended to and do not constitute direct legal or official interpretations. It is possible that the information may contain errors or omissions. It is highly recommended you seek legal advice regarding matters discussed in the article.
Author: Sara Rahimian, B.A, M.A, Realtor®