Just when they say Canada’s housing market can’t get any hotter, it continues – time and again – to surprise. According to a report obtained by the CBC, three Canadian cities rank right at the top of North America’s most expensive housing markets: Vancouver, Toronto and Hamilton. Ottawa clocks in at number six and Montreal at number nine.
In short: If you plan on buying real estate in a large Canadian city, you need to save money. For many prospective homebuyers, the thought of saving money is daunting. How do you drum up the funds to enter the market competitively? And how do you save money throughout the buying process?
Those are the questions this article sets out to answer. If you plan on buying a home, here’s how to save money every step of the way.
Saving Money for Your Down Payment
First, it helps to determine what amount of down payment you are comfortable with. First-time homebuyers in Canada only need to put down five percent, but remember: The less you put down initially, the more you pay in monthly down payments.
So, let’s say you shoot for 15% and are looking at an urban condo or suburban home that’s roughly $500,000. You need $75,000. That’s your “goal.” To reach your ultimate goal, develop a monthly savings goal to track your progress. Apps like YNAB (paid) or Mint (free) allow you to categorize your spending according to monthly needs, activities and goals. Simply make a “down payment” category and divert a percentage of funds from other categories (like “Dining Out” or “Home Supplies”) each month.
Additionally, consider selling items to contribute to your down payment fund. If you’re buying an urban condo, perhaps you can sell your car to help. If you plan on downsizing, perhaps selling bulky furniture is both a logistical and money-saving benefit.
Cost-Saving During the Process
Unfortunately, saving for homebuying is about more than just accumulating a down payment. Typically, you also pay for a land transfer tax, real estate lawyer, and home inspection costs.
Luckily, there are ways to save on each of these costs. You can save money on lawyer fees by partnering with an online real estate lawyer in Mississauga that offers flat rates with the lowest price guarantee. Quality online real estate lawyers in Canada tend to be more cost-effective than their brick-and-mortar counterparts. Plus, they are easier to deal with – you can contact them any time of day, any day of the week.
If you are a first-time buyer purchasing in the province you currently reside, you might be eligible for a full rebate. Use this Ratehub tool to see what you can save.
It’s challenging to save money on home inspection as most inspectors offer very similar rates. Don’t be tempted to skip this step, though. Justify the (admittedly modest) cost of the inspection – an average of around $340 – as an investment in avoiding unforeseen costs down the road.
Yes, the Canadian real estate market is hot right now, but all signs point to it getting even hotter. If you’re interested in getting into
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