Buying your first home is like a dream come true, but like
every dream this dream too comes with a cost and that cost is a time-consuming
and complex process. From touring properties, and exploring diverse neighbourhoods
to assessing financial readiness, obtaining pre-approval for a mortgage, and
navigating the intricacies of legal documents there are numerous factors to
consider before fulfilling your dream of buying your own house, especially in a
place like Alberta where the housing market is quite dynamic and competitive.
So to assist you in this journey we’ve made a comprehensive
checklist that will equip you with the knowledge, resources, and confidence
needed to make an informed decision.
Who
qualifies as first-time home buyers?
Before moving forward it is important to understand whom to
consider first home buyers especially if you are considering applying for any
provincial assistance programs. To qualify as a first-home buyer in Alberta you
must not own any property or interest in any property anywhere in the world.
However, it is important to note that this criterion may change based on the
specific program you’re applying to.
Checklist
for Buying a Home
Financial Preparation- Before you start house-hunting it is
always advisable to financially prepare yourself for such a huge step and
unless you are buying a house with cash you would require a mortgage. Get a
pre-approval for a mortgage from a lender so it clarifies your budget and
strengthens your proposal.
Build up your down payment– It is always in the best interest
to opt for a larger down payment option since it reduces your loan amount
resulting in less interest rate and less risk to the lender. In Alberta, the
minimum down payment required is 5% of the first $500,000 of the purchase price
and 10% for any amount exceeding $500,000. Therefore, opting for a larger down
payment reduces your loan amount and your monthly payments.
Explore First-Time Homebuyer Programs- There are some
Alberta-specific incentive programs and some federal programs from which you
can choose the most suitable one. These programs are as follows :
Alberta-specific incentive
programs
Attainable Homes Calgary (AHC)– The biggest hurdle for
first-time home buyers is a down payment, therefore the main aim of the AHC
program is to bridge this gap. AHC bridges this gap by providing you with a 5%
down payment. However, to be eligible under this scheme you must pay $2000 upfront
and annual household earnings must be no more than $131,424.
First Place Home Ownership Program- This program offers a
unique opportunity to homebuyers. To be eligible for this program your combined
household income should be under $130,000 annually, a personal net worth of
$25,000 or less, and commit to reside in the unit for the first five years of
ownership.
Federal programs
First-Time Home Buyers’ Incentive- This program is offered by
the Canadian government where the government offers a shared-equity mortgage
option for qualified first-time buyers. In this program, you can borrow either
5% or 10% of the purchase price and put it towards your down payment, and in
return the government shares in the future value of your home.
Home Buyers’ Plan (HBP)- This program allows you to withdraw
up to $35,000 from your Registered Retirement Savings Plan (RRSP) to use as a
down payment on your first home.
First Home Savings Account (FHSA)- The FHSA was launched in
2019, this scheme allows Canadians under the age of 40 to contribute up to
$8,000 per year towards a down payment on their first home.
Assemble your team of
professionals
Once you have settled your financial matter you must then
find an experienced real estate agent who can find and recommend properties to
you, real estate lawyers who can handle the legal aspects of your purchase,
ensuring a smooth closing and protecting your interests.
Legal review and closing
Now after your realtor has found a property for you, legal
review and closing are the next steps which will also require the help of a
real estate attorney. Now to ensure that your legal rights and obligations are
protected:
Scrutinize your Purchase Agreement- Verify details like the
purchase price, closing date, inclusions/exclusions, and any contingencies.
Identify and clarify any ambiguous language or potential concerns before you
sign the agreement and examine that the purchase agreement accurately reflects
the negotiated terms
Conduct a thorough Title Search- To avoid any disputes in the
future a clear title is a must. A clear title also guarantees that you are
the rightful owner, therefore always ask a lawyer to conduct a comprehensive
title search on the property.
Review closing documents– It is really important to meticulously
review all the closing documents. Closing documents include the transfer of the
title deed, mortgage documents, and tax
statements note this is not an exhaustive list and depending on your plans
might include more such documents.
In the end, we hope that with this checklist you are prepared
to take your first step towards homeownership. However, this guide is just the
beginning of a home-buying process, from securing your financing to finally
getting the keys to your dream home a lot of intricate steps are involved so it
is really important to understand the entire process thoroughly.
Therefore, always do your own research, and consult a
qualified professional who will help you in making an informed decision
throughout the process.
At Juriscorp Law, we specialize in real estate
transactions in Alberta, we understand the unique
challenges faced by first-time home buyers and we are dedicated to providing
exceptional legal services throughout the entire process of home-buying. We
have helped 10000+ homebuyers with their real estate transactions and we can
help you as well with your first-time home purchase.
The original article appeared here: https://juriscorplaw.ca/first-time-home-buyer-checklist/
About Juriscorp Law
Address: 200, 5324 Calgary Trail NW, Edmonton, AB T6H 4J8
Phone: (780) 430-2826
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