Buyers

1. Get a Clear Picture of Your Finances

Know Your Credit Score: A strong score can help unlock better mortgage options and lower interest rates.

Set a Realistic Budget: Evaluate your income, savings, and expenses to establish a comfortable price range.

Build Your Down Payment Fund: If the purchase price is less than $500,000, the minimum down payment is 5%. If the purchase price is between $500,000 and $1,499,999, the minimum down payment is 5% of the first $500,000, and 10% of any amount over $500,000 to $1,499,999.

Plan for Additional Expenses: Account for closing costs, which typically include legal fees, land transfer taxes, title insurance, and administrative charges. Also, factor in property taxes, home insurance, and future maintenance.

2. Secure a Mortgage Pre-Approval and More to Know About Mortgages

Talk to a Mortgage Expert: A mortgage broker can help determine your borrowing power and provide a pre-approval letter. Unlike banks, which can only offer their own mortgage rates, brokers have access to multiple lenders, allowing them to compare different options and find the best rate for your financial situation.

Compare Loan Structures: Understand the differences between fixed and variable rates, loan terms, and payment plans.

• Fixed Rate Mortgage: The interest rate stays the same throughout the loan term, ensuring predictable monthly payments. This is a great choice for those who want financial stability and protection from rising interest rates.

• Variable Rate Mortgage: The interest rate fluctuates based on the lender’s prime rate, meaning your payments can increase or decrease over time. This option often starts with a lower rate but carries the risk of higher future payments.

• Loan Terms: This refers to the length of time you commit to a specific mortgage agreement, usually ranging from 1 to 10 years. The most common term is 5 years, balancing stability and flexibility. Shorter terms may offer lower rates but require renewal sooner, while longer terms provide financial predictability.

• Payment Plans: These dictate how frequently you make mortgage payments, whether monthly, bi-weekly, or weekly. Opting for an accelerated payment plan, such as bi-weekly or weekly accelerated, can help you pay off your mortgage faster and reduce overall interest costs by making extra payments throughout the year.

Lock in a Favorable Rate: Most pre-approvals can secure an interest rate for up to 120 days, giving you peace of mind while you search.

CMHC Insurance (When Your Down Payment is Under 20%)

If your down payment is less than 20% of the purchase price, you're required to purchase mortgage default insurance through the Canada Mortgage and Housing Corporation (CMHC) or another provider (e.g., Sagen, Canada Guaranty). This protects the lender in case you default on your mortgage.

Premiums: The cost is added to your mortgage and is tiered based on your down payment size:

• 5–9.99% down → 4.00% premium

• 10–14.99% down → 3.10%• 15–19.99% down → 2.80%

Why it matters:
Even though it adds to your monthly cost, CMHC insurance allows buyers to get into the market with less upfront cash.

The Mortgage Stress Test

Designed to ensure buyers can afford future interest rate hikes. To qualify, lenders must assess whether you can make payments at:

• The Bank of Canada’s benchmark 5-year rate, or

• Your contract rate + 2%—whichever is higher.

Example:
If your lender offers 4.75%, you must qualify at 6.75%.

Why it matters:
Even if you can afford your monthly payment, the stress test can reduce your borrowing power, which is often a surprise to first-time buyers. It’s smart to get pre-approved early and work with a mortgage broker to find your options.

Title Insurance: What It Covers

A one-time fee paid on closing. Covers issues like:

• Liens left by previous owners

• Errors in public records

• Boundary disputes

• Title fraud or forgery

Handled by your lawyer and protects you for as long as you own the home.

Unique Mortgage Situations

• Porting a mortgage: Take your current rate to a new home.

• Bridge financing: Temporary loan when closing dates don’t line up.

• Gifted down payment: Requires a signed letter from the donor and proof of funds.

• Self-employed buyers: May need 2+ years of NOAs, business income verification, or bank statements.

Prepare Financial Paperwork: Gathering the right financial documents is crucial for a smooth home-buying process. Be prepared to provide recent tax returns to verify your income and financial history. Pay stubs from the last few months demonstrate your current earnings, while bank statements help showcase your savings and financial stability. Additionally, if you’re self-employed, you may need to provide business financials, profit and loss statements, or Notices of Assessment. Having these documents ready ensures a quicker mortgage approval process and demonstrates financial readiness to lenders.

3. Identify Your Must-Haves vs. Nice-to-Haves

Pinpoint Essential Features: Determine the ideal number of bedrooms and bathrooms based on your household size and future plans. Consider the type of property—single-family home, condo, or townhouse—that best suits your lifestyle. Think about layout preferences, storage needs, and outdoor space requirements to ensure the home aligns with your daily routine and long-term goals.

Think About Your Lifestyle: Proximity to work, schools, amenities, and public transit can all impact your decision.

Stay Open-Minded: Prioritizing must-haves over wish-list features can help you find the right fit within your budget.

4. Understand the Local Market

Explore Different Neighbourhoods and Communities: North Bay offers a variety of unique neighbourhoods, each with distinct advantages. Research which community or neighbourhood aligns with your lifestyle and priorities, such as proximity to schools, parks, waterfront access, or shopping amenities.

5. Incentives and Assistance

Land Transfer Tax and Rebate:

Mandatory tax paid upon purchasing a home, calculated as a percentage of the purchase price:

o 0.5% on the first $55,000

o 1.0% on amounts from $55,000 to $250,000

o 1.5% on amounts from $250,000 to $400,000

o 2.0% on amounts from $400,000 to $2,000,000

o 2.5% on amounts above $2,000,000 (for residential properties with multiple dwellings)

First-time homebuyers can receive a rebate of up to $4,000. Covers the tax for homes purchased at $368,000 or less, with partial rebates for higher-priced properties.

First-Time Home Buyers’ Tax Credit (HBTC)

• Claim up to $10,000 (which gives you a $1,500 tax refund).

• Available to those who haven’t owned a home in the last 4 years.

RRSP Home Buyers’ Plan (HBP)

• This program lets you withdraw up to $60,000 from your Registered Retirement Savings Plan (RRSP) tax-free to help buy or build your first home.

• You must repay the amount over 15 years, starting the second year after your withdrawal.

• You don’t pay tax on the withdrawal as long as you follow the repayment schedule.

• Each buyer can withdraw up to $60,000 — so a couple could access up to $120,000 total if both are eligible.

Who’s eligible?

• You must be a first-time buyer or not have lived in a home you owned in the last 4 years.

• The home must be your principal residence within one year of purchase.

First Home Savings Account (FHSA)

The FHSA is a tax-free savings account introduced in 2023 to help first-time buyers save for a down payment faster and more efficiently. It combines the best features of an RRSP and a TFSA:

• Contributions are tax-deductible like an RRSP.

• Withdrawals for a home purchase are tax-free like a TFSA.

Who Can Open One?

To be eligible, you must:

• Be a Canadian resident

• Be at least 18 years old

• Be a first-time home buyer (you haven’t lived in a home you owned

in the current year or the previous 4 calendar years)

Contribution & Limits

• $8,000 annual contribution limit

• $40,000 lifetime contribution limit

• Unused room can carry forward (up to $8,000)

• Contributions can be deducted from your income tax, which reduces your taxes owing for the year.

GST/HST New Housing Rebate

• When you buy a newly built or substantially renovated home, you pay Harmonized Sales Tax (HST) which in Ontario is 13% (5% federal GST + 8% provincial portion).

• To make new homes more affordable for buyers, the government offers a partial HST rebate on both the federal and provincial portions if you meet certain criteria.

Who Qualifies?

• You buy a new or substantially renovated home from a builder

• You intend to live in the home as your primary residence (or an immediate family member does)

• The home is located in Ontario

• The purchase price is under $450,000 to receive the full federal rebate (partial rebate available up to $450,000)

Federal HST Rebate (5% Portion)

• Applies to homes under $350,000: Full 36% rebate on the 5% federal portion of HST.

• For homes between $350,000 and $450,000: The rebate reduces on a sliding scale.

• Over $450,000: No federal rebate.

Max Federal Rebate: $6,300 (36% of $17,500, which is 5% of $350,000).

Ontario Provincial Rebate (8% Portion)

• Ontario offers a 75% rebate on the provincial portion of HST (8%)—up to a maximum of $24,000.

o This rebate does not phase out at $450,000 like the federal rebate

o Applies to homes with a purchase price up to $350,000 for full rebate

o Capped at $24,000, and available for homes priced up to $350,000–450,000 (but not phased out as sharply as the federal portion)

Example:

For a newly built $400,000 home:

HST: 13% = $52,000
5% GST = $20,000
8% Ontario = $32,000

Potential Rebates:

Federal (partial): ~$4,500
Ontario: ~$24,000

• Total rebate = ~$28,500

How to Apply

• If rebate is not included by the builder, you must apply within 2 years of closing

• Use GST190 and RC7191 forms for the federal portion

• Use Ontario rebate application forms through the Ministry of Finance.

6. Understanding Property Ownership Types

• Freehold: The owner has complete ownership of both the property and the land it sits on. They are responsible for all maintenance, taxes, and any associated costs.

• Leasehold: The buyer owns the home but leases the land it sits on, often through long-term agreements.

• Condominium (Condo): The buyer owns their unit but shares ownership of common spaces (hallways, amenities, etc.) with other residents. Condos come with monthly maintenance fees that cover building management and upkeep.

1. What to Look for During Property Viewings

Understanding Days on Market (DOM)

DOM = Number of days a property has been listed. It’s a helpful indicator of pricing, interest, or potential issues.

o Low DOM (1–10 days): Often priced well or aggressively to encourage bidding wars.

o   High DOM (30+ days): Might have flaws, be overpriced, or in a price range with limited buyers ($700,000+).

Assess the Condition: Examine the foundation for cracks, inspect ceilings and walls for water stains, and check for signs of mold or mildew. Look for uneven flooring, peeling paint, or evidence of previous repairs that may indicate structural concerns.

Inspect Key Systems: Evaluate the age and condition of the roof to anticipate future replacement costs. Test heating, ventilation, and air conditioning (HVAC) systems to ensure they are functioning efficiently. Check for plumbing leaks under sinks, in the basement, and around toilets. Inspect electrical panels for outdated wiring and verify that windows are properly sealed to prevent drafts and heat loss.

Examine the Layout: Ensure that the home’s design and room sizes align with your needs. Consider the functionality of the space, including storage options, traffic flow, and accessibility. Assess natural light exposure in each room and whether modifications are feasible.

Consider the Neighborhood: Visit the area during different times of the day and week to get a full picture of noise levels, traffic patterns, and safety. Check proximity to essential amenities like grocery stores, schools, hospitals, and public transportation.

Ask About Inclusions: Determine what is included in the sale, such as major appliances, window coverings, and light fixtures. Clarify whether any fixtures or custom-built features will remain or be removed before closing.

Review Property History: Request details on previous ownership, significant renovations, and any past insurance claims related to the property. Investigate the reason for the sale and research comparable homes in the area to assess value trends.

2. Making an Offer

In North Bay, there are two different ways that sellers list their properties - Using an Offer Date or Offers Anytime.

Offer Date: This is the specific date on which the seller may set an "offer date" to review all offers at once. This means the seller will not review any offers before that date, and the buyer knows when to expect a response.

Example: A seller may say, "All offers will be reviewed on the 10th of April at 6 P.M.,” giving buyers a set date and time by which they need to submit their offers.

Anytime Offer: This refers to an offer that can be submitted at any time, without a set deadline or specific date for submission. Sellers who don't set a particular date for reviewing offers may accept offers as they come in, making it an “Offer Anytime" scenario.

Example: A seller might not specify an offer date and instead accept offers as they come in. In this case, a buyer can submit an offer at any point, and the seller will review it as soon as possible.

Common Conditions to Include in Your Offer:

·      Home Inspection Condition: Allows the buyer to have a professional inspection and negotiate repairs or withdraw if significant issues arise.

·      Financing Condition: Ensures the buyer can secure mortgage approval before the purchase is finalized.

·      Status Certificate Review (for Condos): Provides time to review the condo corporation’s financials and rules.

·      Sale of Existing Home Condition: Protects buyers who need to sell their current home before purchasing a new one.

·      Well and Septic Inspection (for Rural Properties): Ensures water quality and septic system functionality.

·      Water Sample Test (for Rural Properties): Confirms that the water source is safe for consumption by testing for contaminants.

·      Insurance Condition: Ensures that the buyer can obtain home insurance before closing, protecting against risks such as fire, flooding, and structural damage.

Deposit Requirements: Buyers typically provide a deposit of $5,000 to 10% of the purchase price of the property. The deposit is submitted within 24 hours of acceptance of the offer and is held in trust by the listing brokerage. This amount is applied toward the purchase price on closing. A larger deposit can strengthen the offer, demonstrating financial readiness and commitment to the seller. Deposits are generally non-refundable unless a condition in the offer is not met.

Understand the Agreement of Purchase and Sale (APS): This legally binding contract outlines the terms of the offer, including price, closing date, and conditions.

3. Home Inspections and Due Diligence

·      Schedule a Home Inspection: This step helps identify potential issues that may require repairs or renegotiation.

·      Review the Status Certificate (for Condos): This document outlines the financial health and rules of the condo corporation.

·      Confirm Zoning and Permits: Ensure any renovations or additions comply with local zoning laws and were completed with permits.

·      Check Property Taxes and Utilities: Get an estimate of ongoing costs to budget properly.

4. Offer Acceptance and Next Steps

·      Fulfill Conditions: If your offer includes conditions, such as financing approval, home inspection, or insurance confirmation, you must complete these within the agreed-upon timeframe.

·      Finalize Financing: Work with your lender to complete the mortgage approval process.

·      Review Legal Documents: Your lawyer will handle title searches, ensure there are no liens, and finalize closing details.

·      Prepare for Closing Costs: Budget for land transfer tax, legal fees, title insurance, CHMC mortgage insurance, and other associated costs.

5. Moving Preparation, Address Changes and Utility Setup

Arrange for Movers: Research and book a reputable moving company well in advance. Obtain quotes from multiple companies and verify their credentials. If using a DIY approach, reserve a rental truck and enlist help for loading and unloading.

Set Up Utilities: Contact service providers for electricity, gas, water, and internet to schedule activation before your move-in date. Identify services that need to be transferred to your name and arrange for cancellations of any that will not be needed. Common services to address include:

·      Electricity and Gas: Contact local utility providers to transfer service or set up a new account.

·      Water and Sewer: If applicable, ensure water billing is updated to your name with the municipal provider.

·      Internet, Cable, and Phone: Schedule installations or transfers with your provider to avoid downtime.

·      Security Systems: If the property has a monitored security system, transfer or set up a new contract with the service provider.

·      Home Maintenance Services: If you use lawn care, snow removal, or pest control services, decide whether to continue, transfer, or cancel these subscriptions. Ensure all accounts are transferred or newly established in your name to avoid disruptions.

Change of Address:

Notify relevant institutions, such as banks, government agencies, insurance providers, and subscriptions, of your new address.

If you have children moving schools, contact their current and new schools to:

o   Transfer academic records.

o   Arrange for school transportation.

o   Ensure they have the necessary supplies and enrollment documents.

o   Notify healthcare providers and transfer medical records if necessary.

o   Update vehicle registration and driver's licenses to reflect your new address.

o   Inform your employer and update payroll and HR records.

o   Redirect mail with Canada Post to ensure you receive important documents and correspondence.

Home Insurance Activation: Confirm that your home insurance policy is active on closing day to ensure protection from potential risks.

Plan for Renovations or Repairs: If any renovations or minor fixes are needed before moving in, schedule contractors in advance to minimize delays.

Packing and Organization: Begin packing well ahead of the move to reduce stress and ensure a smooth transition. Follow these steps to stay organized:

·      Create a Packing Plan: Start with non-essential items and work towards daily-use essentials as moving day approaches.

·      Label Boxes Clearly: Indicate room names and contents on each box to simplify unpacking.

·      Pack an Essentials Box: Include toiletries, medications, important documents, chargers, and a few days' worth of clothing.

·      Use Protective Materials: Wrap fragile items in bubble wrap or packing paper and mark boxes as 'Fragile.'

·      Declutter Before Packing: Donate, sell, or dispose of items you no longer need to reduce moving costs and unpacking time.

·      Coordinate with Movers: Ensure they are aware of any special handling requirements for delicate or heavy items.

·      Keep Important Documents Handy: Store passports, financial documents, and property-related paperwork in a safe, accessible place.

·      Security and Safety: Change locks and update security systems for added peace of mind in your new home.

6. Closing Day and Taking Possession

·      Final Walkthrough: Ensure the property is in the agreed-upon condition before closing.

·      Meet with Your Lawyer: Sign the final documents and receive the keys to your new home.

1. Secure Your Home

·      Change locks and security codes: Even if the previous owner was trustworthy, it’s best to update locks, alarm system codes, and any smart home access.

·      Set up security systems: If the home has a security system, activate it under your name or install a new one for added safety.

·      Test smoke and carbon monoxide detectors: Ensure these safety devices are in working order and replace batteries if needed.

2. Set Up Utilities and Essential Services if you Haven’t Done So

·      Transfer utilities into your name: Contact electricity, gas, water, and waste management providers to ensure a seamless transition.

·      Arrange for internet, cable, and phone services: Schedule installation or transfers to avoid service disruptions.

·      Register for local services: Sign up for garbage and recycling pickup, local emergency alerts, and property tax billing.

3. Update Your Address

·      Notify key institutions: Update your address with your bank, employer, insurance providers, and the Canada Revenue Agency.

·      Update identification: Change your address on your driver’s license, vehicle registration, and health card.

·      Redirect mail: Set up mail forwarding with Canada Post to ensure you receive important correspondence.

4. Plan for Home Maintenance

·      Create a maintenance schedule: Regular upkeep is key to preserving your home’s value. Check the roof, HVAC system, plumbing, and appliances periodically.

·      Review your home warranty (if applicable): Understand what is covered and how to make a claim if needed.

·      Meet your neighbours: Building good relationships can provide helpful community insights and increase security.

5. Organize Your Finances

·      Set up mortgage payments: Ensure your mortgage payments are set to auto-pay or scheduled according to your agreement.

·      Budget for property taxes and insurance: Plan for annual or monthly property tax and home insurance payments.

·      Create an emergency fund: Homeownership comes with unexpected costs, so having a financial cushion can help with repairs and maintenance.

6. Personalize Your Space

·      Plan for renovations or upgrades: If you’re considering changes, prioritize projects based on necessity and budget.

·      Decorate and furnish gradually: Take time to settle in and determine what furnishings best suit your home.

·      Improve energy efficiency: Consider energy-saving upgrades like LED lighting, smart thermostats, or improved insulation.

7. Get Involved in Your Community

·      Learn about local services: Find nearby schools, healthcare facilities, and recreational amenities.

·      Attend community events: Getting involved helps you feel more at home and connected to your neighbourhood.

·      Understand local regulations: Review bylaws related to noise, parking, and renovations.