Historically low interest rates
The historically low mortgage interest rates are one of the most persuasive arguments for thinking about becoming a homeowner right now. Low interest rates can drastically lower your monthly mortgage payments and increase the affordability of house ownership. Over the course of your loan, locking in a low rate can result in thousands of dollars in savings.
Building equity
Renting is like paying someone else’s mortgage. With each mortgage payment when you own a property, you increase your equity. This has the potential to generate significant wealth accumulation and financial stability over time.
Tax benefits
Owning a home offers several tax advantages, including the ability to deduct property taxes and mortgage interest, which can significantly reduce your overall tax liability.
Stability and control
Home ownership provides stability and empowerment, granting you control over your living situation without the worry of rent hikes or the need for permission to make changes to your property.
Long-term investment
Real estate typically appreciates in value over time, making it a reliable long-term investment despite occasional short-term fluctuations.
Personalization
The freedom to personalize and customize your home is a cherished aspect of home ownership. You often have fewer freedoms to make changes to your rental home. Paint, restorations, and design changes may be subject to limitations from the landlord.
Forced savings
Monthly mortgage payments can be seen as a form of enforced savings, compelling you to gradually amass assets and wealth over time. This accumulation can play a vital role in securing your future financial stability.
Housing cost stability
Unlike renting, where landlords may increase rent at any time, a fixed-rate mortgage offers housing cost predictability. Knowing that your mortgage payment will stay somewhat steady over the course of the loan allows you to budget more effectively.
Growing family needs
If your family is growing or your needs are changing, owning a home may provide you the space and security you need for these life changes.
Ownership
Having a home can give you a sense of stability, pride, and success. It’s a location you can call your own, where you can make memories and forge ties to the neighborhood.
Despite a boom in immigration, housing construction lags behind schedule.
On the plus side, immigration is essential for maintaining Canada’s population growth and making sure that there is a strong labor market. The labor force is a crucial component of economic growth when the native population ages and birth rates fall. Additionally, they support the economy through consumer spending and taxes, which in turn fund a number of government initiatives and services that are advantageous to both native-born Canadians and immigrants themselves.
Immigration, however, also puts pressure on the property market, particularly in urban regions like the Greater Toronto Area (GTA) and Toronto. With an expanding population comes a higher demand for housing, which frequently outpaces the availability of affordable housing options.
An ongoing housing scarcity is a result of the mismatch between housing demand and supply, which is made worse by the Canadian government’s increasing immigration targets.
For all Canadians to have access to affordable housing by 2030, the Canada Mortgage and Housing Corporation (CMHC) has emphasized the need for millions of new housing units. Given the rate of home starts right now, it’s doubtful whether this goal can be achieved. It is now difficult for first-time purchasers to locate affordable dwelling options due to the competitive real estate market caused by this shortage.
Complex policy challenges must be overcome in order to address the housing shortfall and keep Canada’s immigration goals on track. It necessitates a multifaceted strategy that takes regional variances into account, promotes programs to provide access to affordable housing, and increases housing supply.
It’s crucial to achieve a balance between housing regulations that guarantee enough and affordable housing for all people and immigration policies that promote economic growth. In the upcoming years, finding answers to this problem will probably continue to be a top concern for Canadian authorities.
How do you begin?
When considering purchasing your first house, there are a number of important variables to bear in mind. Here are a few:
Financial capability: Check your credit score first. Finding a mortgage with favorable terms will be simpler if you have a high credit score. How much of a down payment you are able to make is important to consider. For the purchase of a home in Canada, a minimum down payment of 5% is normally needed. Establish a thorough spending plan that accounts for both your present and projected homeownership expenses, such as mortgage payments, property taxes, insurance, and upkeep.
Affordability: Conduct a market analysis of the GTA’s and Toronto’s present real estate markets. Know the range of prices for the neighborhoods and sorts of properties you are interested in. To find out how much you can borrow and what your prospective monthly payments would be, get pre-approved for a mortgage.
Location: When selecting a community, take your lifestyle and tastes into account. Consider how close something is to a job, a school, a hospital, a public transportation hub, and attractions like parks and retail areas. Do your homework on any planned infrastructure or development projects in the area, since they may have an effect on local property values and quality of life.
Special assistance: Partner with a licensed and seasoned real estate agent who focuses on the Toronto, or GTA markets. They may advise you professionally, assist you in finding suitable houses, and represent you during negotiations. I can assist you in locating the most competitive mortgage rates and terms from a number of lenders.
Governmental programs and incentives: The First-Time Home Buyer Incentive program, which offers shared equity mortgages with the government to lower your mortgage payments, is worth investigating.
- Home Buyers’ Plan (HBP): Check if you’re eligible for the Home Buyers’ Plan, which allows you to withdraw up to $35,000 from your Registered Retirement Savings Plan (RRSP) to use as a down payment.
- Land transfer tax rebates: In Ontario, there are land transfer tax rebates available for first-time homebuyers.
- RRSP Contributions: Consider contributing to your RRSP to take advantage of the tax benefits and potential down payment savings through the HBP.
Additional costs: Understand property tax rates in the area where you plan to buy. These taxes can vary significantly between municipalities. Factor in ongoing maintenance costs, utility bills, and potential condo fees (if applicable) when calculating your monthly expenses. Budget for a professional home inspection to identify any potential issues with the property before finalizing the purchase.
Legal considerations: Hire a real estate lawyer to handle the legal aspects of the transaction, including reviewing contracts and ensuring a smooth closing process. Explore home insurance options to protect your investment in case of unexpected events.
Future plans: Think about your long-term objectives and how buying a property fits into them. Are you planning on dedicating a significant amount of time to this particular area? Do you see this as a starting house or a long-term investment?
Home inspection: Consider scheduling a professional home inspection to uncover any potential issues with the property. This step will enable you to make an educated decision and, if needed, engage in negotiations for repairs or price adjustments.
Closing process: Be prepared for closing costs, which include land transfer taxes, legal fees, and other miscellaneous expenses. Along with your down payment, include these expenses in your budget.
How may mortgage broker Ruby Chawla be of assistance?
Those who are preparing to purchase a property in Toronto, or the GTA will benefit greatly from Ruby, an experienced Mortgage Specialist. She is able to help in the following ways:
Initial evaluation and discussion: Ruby can evaluate your financial condition and assist you with understanding what is needed to become a homeowner. She can explain the costs of owning to you, such as the down payment needed, closing costs, monthly mortgage payments, property taxes, and insurance. To assess whether getting a mortgage is feasible, she will look at your earnings, outgoings, credit history, and savings. This is a crucial step since you want to be sure you can afford your mortgage payments on a regular basis.
Mortgage pre-approval: Before starting your property hunt, obtain a mortgage pre-approval. When you identify a suitable property, you will be able to confidently submit an offer because you will have a clear idea of your borrowing capability. Together with you, Ruby will prepare the required documentation, submit your application to many lenders, and negotiate on your behalf to obtain the best mortgage conditions.
Alternative financing possibilities: If a conventional mortgage isn’t right for you, there are other possibilities. The 6-month mortgage may initially appear strange. A considerably reduced interest rate on this product, however, will help you pass the stress test and qualify for a mortgage. Once the initial six months are up, you’ll have the option to renew into a package at the best pricing at that moment.
A lot of credit unions and non-prime lenders provide a solution. They are not subject to federal regulation, thus they do not demand that applicants do the stress test in order to qualify for a mortgage. Instead of adding 2% as required by the stress test, some lenders will evaluate your application based solely on your contract rate. This may improve your chances of getting the desired mortgage amount, or it can even make it possible for you to think about buying a bigger house.
Support and guidance: Ruby will provide support and assist you with any questions you may have along the home-buying process. She can help you compare mortgage products, decipher complicated mortgage jargon, and make decisions that are in line with your financial objectives.
Credit improvement: Ruby can help you build your creditworthiness if your credit score is a worry. She can offer suggestions on how to handle debt, make prompt payments, and take actions to raise your credit score, all of which can improve your chances of being approved for a mortgage.
Access to numerous lenders: Ruby is able to borrow money from a variety of financial institutions, including banks, credit unions, and alternative lenders. She can use the connections she has to identify mortgage possibilities that are suitable for your particular financial situation. If you have a non-traditional source of income or work for yourself, this may be extremely useful.
Ruby Chawla, a top Seasoned Mortgage Broker, can help assess your financial readiness, improve your credit, and connect you with lenders. She offers guidance throughout the home-buying process, making homeownership a reality.
