Tips for Prospective Homeowners in Toronto

Read these tips for homeowners in Toronto to ensure you know how much you'll need to buy a home.
Read these tips for homeowners in Toronto to ensure you know how much you'll need to buy a home.

Purchasing a home is a milestone for many Torontonians, especially during these unstable times. With an economy that may not be as strong as a result of the pandemic, good real estate investments definitely take time and strategy. A study conducted by the City of Toronto projected almost double the rate of population growth by 2041, which will increase the housing demand in Toronto significantly over the next 20 years…good news for homeowners in Toronto!

Buying real estate in Toronto often means entering a cutthroat market, competing against many other offers from potential buyers. With the right tools and a financially-savvy mindset, buying a home in the GTA isn’t as daunting as it may seem.

Read these tips for homeowners in Toronto to ensure you know how much you'll need to buy a home.
Read these tips for homeowners in Toronto to ensure you know how much you’ll need to buy a home.

Here are a few tips to help prospective homeowners in Toronto make the best financial choices.

Determine Your Minimum Down Payment

Knowing how much money you have to contribute to your down payment  For homes that cost between $500,000 and $999,999, you will need a down payment equal to 5% of the first $500,000 and 10% of the amount above $500,000. For example, for a $900,000 home, you will need a minimum down payment of $65,000.  To understand how much you can comfortably funnel towards a down payment and/or how much you need to save, make a list of your savings, investments, income, debts and expenses. Reducing some of your expenses will help you save for a down payment faster.

Research Neighbourhoods

Once you have your down payment, research the areas of Toronto you’re interested in to help you determine what neighbourhoods your budget can afford. Your down payment will also help narrow down the size of the house you’ll be able to afford.

Don’t Forget Renovations

You may find a house you like that requires renovation of at least one room. Your budget should ideally account for this variable expense; however, with Toronto’s expensive housing market, that may not be possible. You can always renovate at a later date or buy a home that doesn’t require renovation. There are a number of resources available to help you learn how to renovate your home economically“> and with style.

Know Your Lending Options

As potential homeowners, you may require short-term assistance in order to balance your finances or pay for unforeseen costs, so it’s important to know where to look. An alternative lender can help you secure short-term funding quickly, without the frustration of delays. GoDay offers online loans in Ontario for anyone with irregular cash flows.

Unlike traditional lending options, choosing to use an alternative lender will make it easier and more convenient to acquire needed funds. The right lender will be able to eliminate red tape and help you get the money you need quickly, often requiring only your banking information and employment history. This type of lending should be considered only for emergencies, and not relied on as part of a regular budget since interest rates on the loan will be higher.

Take Advantage of First-Time Homeowner Perks

The Province of Ontario offers a rebate on the Ontario Land Transfer Tax to first-time homeowners. First-time homebuyers in Ontario can qualify for a rebate equal to the full amount of their land transfer tax, up to a maximum of $4,000. The City of Toronto also offers a rebate on the Toronto Land Transfer Tax to first-time homeowners equal to the full amount of their municipal land transfer tax, up to a maximum of $4,475.  Your real estate lawyer can help you claim these rebates. These perks are created to make it easier for buyers to purchase in larger, more expensive cities like Toronto.

Hold Yourself Accountable

Once your budget plan is in place, it’s important to check in on a consistent basis, to ensure you’re always on track to save enough to make your down payment.

Try setting a calendar alert for the first of every month, where you can evaluate your progress and decide if you need to make any adjustments to your budget. Owning a home is a large responsibility. The first step is knowing you can keep yourself on track to get to that milestone.

You might be interested in reading, “The 5 Most Likely Causes of Damage to Your Home”.