Ottawa First Time Home Buyers


Ottawa First time home buyers, there is no doubt that buying a house is a large commitment. Here is some information to assist Ottawa first time home buyers.


Ottawa First Time Home Buyers


Asking Yourself the Right Questions

Ottawa first time home buyers, before you start the home buying process, it's important that you take the time to review your financial picture.  As well as, how it may change once you own a house.

A few quick questions Ottawa first time home buyers should ask are:

  • If there are any problems with the house or repairs needed, do you have enough resources to cover the costs or the time and skills to repair it yourself?
  • Is your income stable or will there be any changes in the future?
  • Are there any major life changes you are expecting such as changing jobs or starting a family that may affect your finances?
  • Are you comfortable with fluctuations your house value and interest rates?
  • Will your employment require you to relocate to another city?

Mortgage brokers in Ottawa can help Ottawa first time home buyers. They will be able to review your budget and what you qualify for to find the right mortgage fit for you.

Learn more: Mortgage Brokers in Ottawa


How to Review Your Finances

One of the largest purchases you make will no doubt be buying a house. Before you embark on this journey, it is important to review your finances and know that they are in order. Here is how to review your finances before you buy a home.

A good place to start is with reviewing your bank account history to learn more about your spending habits so you can see where you money is currently going.  Also you can see how much money after deductions (if applicable) is entering your account with each pay.

Also, if you are planning on buying a home with someone else, it’s important that they review their finances as well.

Once you have reviewed your accounts, you can ask yourself:

  • Do you have any money set aside for emergencies?  Typically it's recommended to have three months of income set aside.
  • Do you have a plan in place to pay off any debts?  When you buy a home, you also want to make sure that your other financial obligations can be managed as well.
  • Do you have savings for a down payment as well as the closing costs?  When buying a home for the first time, the typical minimum down payment is 5% of the price of the home.  However, there are also closing costs such as your lawyer’s fee that you need to budget for.
  • Do you have a stable job or income?
  • Will you still be able to save money for retirement and other goals once you have a house?
  • Are you relying too much on credit cards each month to get by or do you carry large amounts on loans and credit cards?  The less debt you have the larger home price you will be able to qualify for.

Learn more: Down Payment on a House in Ottawa
Learn more: Closing Costs to Consider When Purchasing a Home


Buying a Home or a Car First?

Both can be very exciting purchases. However sometimes there is only so much income available per month for debt payments. Due to that, sometimes one needs to decide to buy a car or a home first. With possible credit card debt, student loans, monthly rent and saving for a down payment, a person’s monthly financial commitments can be quite high already.  This can make it challenging to do it all at once. 

There are many incentives to buy a new car. Such as incentives for new grads to purchase a vehicle after graduating. With this, a car purchase can be quite tempting. When looking at a mortgage application, one typically finds challenges that come up with their debt servicing ratio when there is a vehicle payment added.

An example car loan payment of $500 per month may mean a purchase price reduction of approximately $50,000.  As you can see, this vehicle purchase can make a dramatic difference in the value of home you qualify for. If you are unsure if you should buy a car or a home first, I recommend you reviewing the numbers with an Ottawa mortgage broker. This will help you find out what auto payment will work with your financial picture in anticipation of home ownership.

Learn more: Ottawa Mortgage Brokers


Home Buying for Millennials

In 2016, BMO conducted a survey to look at home buying for millennials.  The survey concluded that millennials are not in a hurry to buy a home.

The survey spoke to over 2000 millennials from the ages of 19 to 35 years old. Millennial’s feel a home purchase is more of an investment rather then a life change, they are holding off until the timing is right for them.

60% or millennials said they we’re sick of renting.  However, 70% said they prefer to delay the purchase. Over 40% of millennials said they are not comfortable enough with their finances to make a home purchase. 25% said they are likely to buy a home this year.

If you are thinking of buying a home for the first time and not sure where to begin, I invite you to contact me. We can review your current finances, your goals for a home and for your future and find options that fit your exact goals.

Once we find your monthly budget for a home, we can compare that to the mortgage payment for the home price you are looking at. If the mortgage payments make your budget, then you are on the right track.


Buying a Home With a Friend

Ottawa first time home buyers, a new trend is happening. This is is happening with millennials to help them with buying a home in Canada.  The new home buying trend is buying a home with a friend.

This is a possible solution to assist with buying a home, as otherwise due to the tightening mortgage guidelines and rising home prices, it could be challenging.

Also, with your combined stronger application and resources, this can help you access the best mortgage rates in Ottawa, whether the best fixed rates or the best variable rates.

Combining your resources also helps with qualifying for a home value that is larger then what you can qualify for on your own.

Learn more: Best Mortgage Rates Ottawa Ontario

When deciding on the home you want to purchase together, here are some things to consider:

  • would you prefer a detached home or townhouse, a condo or a freehold
  • how many bedrooms will you and your friend need in total for you, guests, a home office, if needed
  • are you buying a renovated home or one that needs to be fixed up
  • what are you both comfortable paying each month in total for the mortgage, property taxes utilities, maintenance
  • what size of down payment can you each make
  • how will you divide the ownership percentage
  • who will do the maintenance and chores

Learn more: Tips for Buying a Home to Renovate
Learn more: How Much Down Payment Do I Need to Buy a House?

Also, there are other factors that need to be considered such as what happens if:

  • one wants to sell
  • there is a conflict between you
  • one passes away
  • one loses their employment
  • there is an unforeseen expense with the home
  • one loses their employment
  • there is a breakdown in the relationship

Ottawa first time home buyers, a lawyer can assist you with any legal advice and agreements. The more you are prepared upfront for these situations the better off you will be in the long run.


Buying Now Versus Waiting

I am sometimes asked if now is a good time to buy or if it is better to wait a year in case, for example, house prices or interest rates fall.  Here is some information on buying a home now versus waiting.

When looking at house prices in Ottawa, the average sale price of a residential class property sold in January in the Ottawa area was $427,487. This was an increase of 8.8% over January of 2017.

Now if you wanted to wait one year to purchase, the house you are looking for could be 8.8% higher next year which based on the average house price in Canada in January would mean a price of over $36,600 more.

When looking at rates, if you go back one year with fixed mortgage rates, the best 5 year fixed rates in Ottawa were approximately 0.65% lower then they are today. Based on the average home price in Ottawa in January, with 5% down, on a 5 year fixed rate, the rate change would cost you over $12,400 more in interest over the term if that trend in rates continued.

Learn more: 5 Year Fixed Rate Mortgage

The total difference of the price and interest over the year is approximately $49,000. In addition to changes in mortgage prices and rates, mortgage rules are frequently changing and a short while ago there was not the stress test in place for conventional buyers, Ontario’s 16 new housing rules were not in effect and so on. We will have to see if this trend continues.

It is important to purchase when the timing is right for you, however waiting for prices and rates to drop may not be the best strategy in today’s market.  Contact me to learn more about buying a home now versus waiting.

Learn more: Buying Now Versus Waiting on YouTube


Ottawa First Time Home Buyers


You Can Be a First Time Home Buyer More Than Once

There are some great perks to being a first time buyer with the Home Buyer’s Plan (HBP). For example, borrowing up to $35,000 from your RRSP without penalty. However, you may not know that you can be considered a first time buyer more than once.

To be a first time buyer again under the Home Buyers’ Plan you (in addition to the standard requirements):

  • at any period during the timeline beginning January 1 of the fourth year before the year of the withdrawal and ending 31 days before the date of the withdrawal, you or your common law spouse must not have owned a home that you occupied alone or together while you were spouses or common-law partners

So, if an acceptable amount of time has passed since you have owned a home, you may be eligible to use the HBP again.

You must also have repaid any balance outstanding from your last Home Buyers’ Plan withdrawal, if applicable.

Also, this plan can also be for the purchase of a home for a relative with a disability. Otherwise, the home must be an owner occupied home no later then one year after the purchase.

You have up to fifteen years to pay back the entire amount of the RSP funds used for the Home Buyers’ Plan. You can pay back the full amount at anytime.


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About Andrew Thake

Andrew Thake is a seasoned mortgage broker with over 15 years of industry experience. He’s assisted more than 2,200 clients in finding their ideal mortgage solutions. Recognized for his excellence, Andrew has received high honours and awards, including the National Rookie of the Year from TD Canada Trust and recognition as a Top 10 Ottawa Mortgage Broker in 2023. He has also been inducted into the Hall of Fame at Dominion Lending Centres and has consistently received their Platinum Award during his tenure as a mortgage broker.

Andrew’s dedication lies in serving his clients and prioritizing their needs with an empathetic approach. Throughout the application process, he provides tailored, informed, and efficient services to ensure the best mortgage solutions for his client’s unique circumstances. The best part of Andrew’s job is when he gets to see the joy on his clients’ faces following their mortgage approval.

Why not make your mortgage experience a comfortable one?

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