How do I… buy a home

Buying a new home is an exciting decision with so much to consider. Lean on our experienced advisors to help you walk through the process and answer your questions along the way. To get started, here's a look at the essential first steps.

Step 1: Learn about the powerful tools and government incentives available to help you save faster

With prices rising, getting on the housing ladder can be a challenge. But the government understands that it's still an important goal for many of us. That's why they offer incentives and assistance programs to help make buying a home for the first time a little easier.

First Home Savings Account

The First Home Savings Account (FHSA) is the latest government registered plan. It helps you save up to $8,000 a year ($40,000 total) for your first down payment. Any contributions you make are tax deductible, and any interest you earn is tax-free (as long as you withdraw for a qualifying home purchase). So not only does this plan save you money on your tax bill, it also helps your savings grow faster.

Home Buyer’s Plan

Using the Home Buyer’s Plan (HBP), you can withdraw up to $35,000 tax-free from your Registered Retirement Savings Plan (RRSP) to buy your first home. The important thing to remember is that the funds you take out will need to be repaid within 15 years to avoid penalties. So really the HBP is like a loan from future you to help boost your down payment.

BC First Time Home Buyers’ Program

This program offered by the BC government helps first-time buyers reduce their closing costs. If you qualify, you’ll get a full or partial exemption from paying property transfer tax – one of the biggest costs to buying a home.

The Home Buyers’ Tax Credit

This is a non-refundable tax credit of up to $10,000 you can claim after buying a home for the first time. That’s a $1,500 tax saving. While it doesn’t help you buy a home as such, it does help make your first year of homeownership a little less costly.

Step 2: Know your finances

Before making any moves, it’s important to understand whether you’re ready to buy a home. Are you in the right financial position? Is your credit score strong enough? Have you saved what you need for the home you want? Make sure you review your finances carefully to ensure everything’s lined up for a smooth, successful home purchase.

Step 3: Determine your budget

The next key step is getting pre-approved for your mortgage. What does this involve? You’ll work with a lender to review your financial situation (credit history, income, debt, etc.) to determine the maximum amount you can borrow and the interest rate you qualify for.

This has three key benefits:

1. It gives you a clear picture of your budget. So you don’t fall in love with a home you can't afford.

2. It shows sellers you’re a serious buyer. This can give you an edge in a competitive housing market.

3. It lets you lock in a mortgage rate for a period of time, such as 90 days. A great option if interest rates are expected to rise.
   
   

Step 4: Hire a realtor

Do you need a realtor to buy a home? Technically, no. You can represent yourself. But it’s not always recommended, especially if you’re buying a home for the first time. With negotiations, contracts, and complex paperwork to handle, working with a professional can save you time, stress and potentially money. Plus, you don’t have to pay your realtor anything. Their payment comes from the seller.

Step 5: Start looking at homes

This is the exciting part. Your realtor will take you to look at lots of home listings. But how do you narrow down your options? When buying a new home, there are several key factors to consider:

• Location – Think about your commute to work, access to amenities like schools and shops, the overall feel of the neighborhood. It's important to choose a location that suits your lifestyle and needs.

• Size & layout – Think about what you need from your home now and in the future. Home office? Kids’ rooms? Space for your giant entertainment system? Make a list of your must-haves and nice-to-haves to reference during your search.

• Condition – Assess the condition of each home. Is it move-in ready or does it require repairs? If you’re willing to make renovations, it’s important to factor them into the home’s cost so you don’t go overbudget.

• Home value – Consider your new home’s potential to grow in value. Look at the local real estate market and consider factors such as future development plans and the desirability of the area. Buying a home that has the potential for appreciation can be a wise investment in the long run.