Buying a home can be exciting, but it can also be a challenging and confusing experience. CMHC is providing guidance to Canadians who are considering buying a home with our updated Home-buying Step by Step guide, released today.
The interactive guide seeks to demystify the process of buying a home in Canada. It’s been revised to better reflect the realities of today’s housing market by illustrating how to access financial readiness, providing tools to help prospective home buyers calculate how much they can afford, and incorporating information about next steps, whether these are to make a purchase or make budget changes.
Because the decision to buy a home is a personal one, it’s difficult to offer advice that applies across the board. That is why the guide includes a complementary workbook to help potential homebuyers identify their specific housing needs and plan according to their budget, lifestyle and goals.

Guide Highlights

Guiding principles that help determine how much you can afford to spend on housing without putting your financial health at risk:
– List of the upfront and ongoing costs of home ownership.
– How to prepare for a meeting with a lender or broker, including key documents to bring.
– Definitions of words to know when buying a home.
– Explanation of mortgage basics and tips for managing your mortgage.
-Tips for maintaining your home and protecting your investment.

The complete guide is available for download on the CMHC website. As Canada’s authority on housing, CMHC contributes to the stability of the housing market and financial system, provides support for Canadians in housing need and offers objective housing research and information to Canadian Governments, consumers and the housing industry.

People fear what they don’t understand. For a first-time home-buyer, the decision to purchase a home can be nerve-wrecking. Between finding the perfect house, making sure it is a good investment and understanding the mortgage financing, it is no wonder that so many people are afraid to purchase their first home.

Here are steps to get you started on the journey of home ownership.
Before starting your house search, allow yourself to imagine what it will be like for a home-owner.
For most people, home ownership can be the most rewarding financial turning points in their lives. Picture living in a home with a fenced yard for the kids, a garage for your car, enough room for all of your furniture and in a quiet neighborhood.
One of the biggest obstacles to accomplish this dream is saving up for a down payment.
Banks recognize this dilemma and offer products with low down payment options. You can purchase a home with as little as five percent down payment because of default insured mortgages. Canadian banks are required by law to insure “high ratio” mortgages against default. “High ratio” refers to mortgages with less than a twenty percent down payment.
Default insurance is typically provided by companies such as Canada Mortgage and Housing Corporation (CMHC), Canada Guaranty (CGI), or Genworth Canada. Insurers provide a safety net for banks by assuming all the risk involved with mortgaging a property.
There are many ways to find or save for a down payment. Consider sources such as saving your tax refund, RRSP’s, a financial gift from a family member or take a second job (casual or part time) to save additional funds.
Contact a mortgage specialist and get pre-approved for a mortgage. This will not only give you an idea of how much of a down payment you will require, but will also tell you how much you are able to afford.
Your mortgage specialist will ask for documentation to confirm your employment, income, the source of your down payment and other aspects of your financial situation.
A pre-approval will let you know exactly how much you can spend on a home before you start your search with a real estate agent.
There is a special type of real estate agent called a buyer’s agent that will help you search for the perfect home.
A buyers agent will help you narrow down your property search and can disclose things to you about the seller (or the home) that they would not be able to do if they represented the seller. You do not pay their commission because the seller does.
The quickest and easiest way to get educated about the entire home buying process is to select a mortgage specialist and realtor who offer unbiased professional advice with your best interest in mind. A mortgage specialist’s job is to educate and advise you to make right decisions based on your unique situation.

Are you financially ready to buy a home? It may be a good idea to sit down and write a draft household budget. Get a sense of your current monthly expenses. A licensed mortgage broker or bank can also help you determine if you’re financially ready, but there are things you can think about on your own too:

Consider your down payment: A down payment is the part of the purchase price the buyer pays in cash rather than financing with a mortgage. Buyers typically need a minimum 5% of the purchase price as a down payment. You cannot borrow down payment funds, though a relative can provide you with a gift of a down payment. In that case, you’ll need a letter from your relative (“gift letter”) verifying the down payment funds are a gift and don’t need to be repaid. Other than any such gift funds, you must prove to the financial institution or lender that your down payment is from your own funds.

If your down payment will be less than 20% of the purchase price, you will need a high ratio mortgage and it has to be your primary residence (i.e. you can’t rent it out). Lenders require borrowers to obtain mortgage insurance for high ratio mortgage, since they can be riskier for financial institutions. The insurance will protect your lender in the event you default on the mortgage. If you need a high ratio mortgage, you need to include the cost of the mortgage insurance in the total mortgage amount. Your mortgage insurance premium will vary depending on the size of your down payment relative to the price of the property, but ranges from under 1% of the purchase price to more than 3%. A real estate professional, mortgage broker, or lender can calculate your exact premium, and some websites have calculators available for doing the math yourself. If your down payment is 20% of the purchase price or more, you do not require mortgage insurance.

Ensure you have deposit funds: You need to provide a deposit with your offer to purchase. Your real estate professional can advise you on the deposit amount, and your deposit funds are typically part of your down payment.

Budget for closing costs: Closing costs are separate from your deposit and down payment, and are typically due on possession date, which is the date when the real estate transaction is complete and the property is yours. Closing costs include lawyer fees, property tax adjustments, title insurance (if any), etc. It is a good idea to budget a couple thousand dollars on top of the purchase price as closing costs.

Remember that being approved for a mortgage of a certain amount doesn’t mean you have to spend that much. In fact, many experts believe you shouldn’t max out on the value of your home. You want to leave enough room in your budget in case you have unplanned expenses come up, interest rates rise in the future, or if there’s going to be a period of time when you’re off of work (sickness, parental leave, etc.), you’ll still be able to make your mortgage payments.

Get a sense of market conditions: News articles often refer to real estate market conditions. You may hear the terms buyer’s market, seller’s market, or balanced market. But what do those mean?

• buyer’s market – where property supply is strong and buyer demand is weak. In a buyer’s market, you’re more likely to hear that buyers think they received a good deal.
• seller’s market – where buyer demand is strong and property supply is weak. A buyer in a seller’s market may worry they’re paying too much for a property because they’re competing with other buyers for a limited supply of properties.
• balanced market – where demand from buyers is keeping pace with the supply of properties for sale.

Market conditions affect home prices. Sellers want to get as much for their property as they can and buyers want to pay as little as they can; the market conditions will dictate who has a stronger negotiating position.

There are many options when choosing a type of mortgage payment. The best payment choice depends on an individual’s preference and goals.
Payment frequency and payment acceleration are the two features you need to consider. Here is some information to help determine the best mortgage payment type for you.
Mortgage payments can be made weekly, bi-weekly, semi-monthly or monthly. Your work payment schedule should be taken into consideration when choosing a payment frequency.
This will ensure that your bank account will always have money available when the mortgage payment comes out.
When you sign your mortgage documents you will be required to provide your bank account information so the mortgage payments will be automatically withdrawn. It is important to make your mortgage payment on time.
A weekly payment amount is determined by taking twelve months of mortgage payments and dividing them by fifty two weeks in a year. Most financial institutions will withdraw the payment each Friday.
A bi-weekly payment amount is determined by taking twelve months of mortgage payments and dividing them by twenty four.
Most financial institutions will withdraw the payment on the first or fifteenth of each month. If the first or fifteenth fall on a weekend, the payment will come out on the Friday.
A monthly payment is determined by taking twelve months of mortgage payments and dividing them by twelve.
Most financial institutions will withdraw the payment on the first of each month. If the first of the month is a weekend, the payment will come out on the Friday.
Payment frequency is not the key factor when reducing the amortization period of your mortgage. Playing down the mortgage principal is. All the talk of bi-weekly payments taking five years off your amortization period is not true.
Although you will save some interest making your payments more frequently, ultimately increasing your payments is what results in the significant amortization reduction.
An accelerated payment is how you reduce your mortgage amortization.
Instead of taking twelve months of payments and dividing them by the payment frequency, the bank takes thirteen months of mortgage payments and divides them by the payment frequency.
This will increase the payment. The extra money goes directly to paying down the mortgage principle.
This will reduce the amortization on a mortgage by approximately four to five years.
Choosing the right payment is important so that your payments are made on time and your mortgage goals are being met.

Your offer has been accepted and you can’t wait to move in. But don’t break out the bubbly just yet. You have to close the deal. Your REALTOR® and lawyer will do most of the closing work, but here’s your checklist.

Immediately begin satisfying any conditions of the agreement that require action on your part. Your REALTOR® can fill out the documents stating that the conditions have been satisfied. Have your lawyer begin searching title to the property. This can take a while, so make sure you allow ample time.

Well before closing, get your homeowner’s insurance to be effective on your closing date. Your insurance broker will give you a ‘binder’ letter certifying that you’re covered. You can’t get a mortgage without this letter!

Contact your lender and have them finalize your mortgage documents. Have your lawyer review them before you sign. Your lawyer will transfer essential utilities like hydro and water, but you’ll have to make sure telephone and cable companies switch their services to your name.

If you rent, give notice to your landlord or sublease your apartment.

Begin planning your big move! Where are those cardboard boxes?

Send out your change of address information and fill out a card at the post office.

Contact the Ministry of Transport about changing your driver’s licenses.

Walk through your new home one more time with your REALTOR®. A day or two before closing, you’ll meet with your lawyer to sign the closing documents. Your lawyer will tell you in advance what certified cheques you’ll need to seal the deal.

It’s no secret that foreclosures have rocked the American real estate market over the past five years, but what about the Canadian real estate scene? While our major housing markets have faired better than that of our neighbor, there are still many foreclosed properties available across the country. First time home buyers and investors alike are jumping at the chance to take advantage of this surge of inventory thanks to affordable investment opportunities. But you can’t reap the rewards until your experience the risks. If you’re considering bidding on a foreclosed home it is important that you first understand the pros and cons of purchasing a property that’s in financial limbo.

Foreclosure in Canada

The United States and Canada have somewhat similar foreclosure procedures, however there are a number of slight differences that will impact your purchase. In Canada, there are two different procedures that dictate the way foreclosures are processed: Power of Sale and Judicial Sale.

Power of Sale is an arrangement in which the owner is allowed to sell the property in order to make back the money that is owed to the lender. This method is done outside of the courts. Judicial Sale refers to the procedure where the lender must petition the court for permission to sell the defaulted property. In this case, the lender sells the house in order to recover the money that is owed.

The chosen method differs based on your province: British Columbia, Alberta, Saskatchewan, Manitoba and Quebec all follow the Judicial Sale procedure. Nova Scotia also abides by this procedure, however it is referred to as Mortgage Foreclosure. The provinces of Newfoundland, Ontario, New Brunswick and Prince Edward Island follow the Power of Sale procedure.

Be Careful When You Buy

It’s important that you carefully inspect the house prior to submitting an offer for purchase. In order for a home to go into foreclosure, the owner must be having problems making their mortgage payments. Normally, this is due to some kind of financial hardship. It goes without saying that these financial struggles have likely affected other responsibilities, including regular maintenance to the home. As such, the home that you’re hoping to purchase could be in disrepair or need renovations in order to make it habitable. While you might receive a great deal on the purchase price, there could be the potential for many costly repairs.

Another factor to consider is the property’s location. If the neighborhood is experiencing a downward trend, you might have a hard time recouping your investment when it comes time to sell.

Seek Help From a Professional

Purchasing a home that is in foreclosure can be tricky. The purchase process can be long and drawn out, so patience is a must. A professional real estate agent and mortgage broker will help prepare you for the challenges of negotiating a purchase price. When the process of buying a foreclosed property is handled correctly, the opportunities are endless.

Life is a little more challenging with a toddler, and that goes double for moving day. If there’s any trouble to get into, little ones will find it, often in surprising ways. You don’t want the rug rats to discover the box cutter as you pack, and you want their new rooms to be safe from the start, so as part of your moving plan, try these childproofing ideas.

Keep track of dangerous items

Anything sharp or poisonous must be safely out of reach on moving day. Set aside a box with medications and kitchen utensils that may be dangerous in the wrong hands. If you have cleaning supplies securely behind childproof safety latches now, keep them there until the very last minute. You can put them in a box in a latched cabinet and move the whole box when you’re ready.

If you have childproofing equipment at your old house, such as covers for electrical outlets and baby gates, keep them in place as long as possible, then do a walk-through and collect them as you leave. This way they’re at hand to install as soon as you hit the new place.

Schedule Your Move for When the Kids Are Busy

If your little ones attend day care or have a regular sitter, schedule your move for that time. It’s helpful to have someone watch them elsewhere if you can, but it’s great to keep to their routine, and it saves on babysitting expenses.

Block Off a Room

Set up a bare-bones room at the new place, ahead of time if possible. Someplace near the action but behind a baby gate can be ideal.

Keep Them Busy

A new toy or game can keep kids happy for hours on moving day. Or, even if you usually resist it, turn on the TV or a favorite movie. Electronic babysitters give everyone a break when you’ve got your hands full!

Checklist for Childproofing Your New Home

Once you’re moved, turn your attention to childproofing early. It’s easier to set up safety from the beginning than to go back and retrofit. Buy any needed hardware before the move so it’s just a matter of installation when you get there. Check this list before you go shopping and when you begin your childproofing at your new home:

• Install locking devices on cabinets
• Insert plastic locks in electrical outlets
• Use baby gates at staircases
• Pad sharp corners on furniture with rubber insulators
• Secure door handles with a baby-proof grip
• Install chain locks high on outside doors to prevent unauthorized escapes
• Lock toilet lids with a special device
• Secure dangerous furniture, such as bookcases, to the wall with brackets

You and your little ones will be making lots of new memories in your new home. We hope these childproofing tips will keep your moving memories pleasant and make your exciting moving day a safe one.

It doesn’t matter whether you live in a charming and peaceful neighborhood or in a hectic part of town; there’s always a risk that you won’t get along with your neighbor very well. Nuisances such as loud music, the neighbor’s dogs relieving themselves in front of your house, or the neighbor’s car parked in your space might seem unimportant and trivial; however, on a daily basis they’re real atrocities. Everyone has the right to have a peaceful living environment and if it’s violated by the people living next door, you have to speak up and confront the problem. Here are some tips that should help you to settle disputes with your neighbors.

Communicate With Your Neighbors

You can’t avoid neighbor disputes if you don’t communicate with them. Maintaining a good relationship with your neighbor doesn’t mean that you have to spend all your free time with them, but it’s the best way to prevent conflicts. First of all, you have to know your neighbors so that you can trust and understand them. Conflicts tend to arise much more between strangers and just an occasional chit-chat with your neighbor will significantly decrease the probability of a dispute. This might not be possible in all cases, but even if you don’t talk to your neighbor at all and you’re unable to get along with her or him, you have to bring up the issue. It’s possible that your neighbor isn’t aware of bothering you, so try to approach him in a calm and constructive way rather than being accusatory. Bringing in a possible solution favorable to both sides is a good way to deal with neighbor problems. Don’t forget to show willingness to compromise. Furthermore, if you’re planning an activity that might be disturbing to your neighbors, let them always know in advance.

Are You The Only One Who Has Problems?

If discussing the issue with your neighbor doesn’t solve anything, try to find out if anybody else has the same problem with her. It’s possible that you’re not the only one whose life is affected by the nuisance. More people approaching the troublemaker with the same concern might have more influence on her. If you’re part of a condo or community association, try to discuss your issues with them and resolve the dispute more easily and cheaply.

Mediation

If you and your neighbor aren’t able to resolve the dispute, you might want to get help from a mediation service. An impartial professional trained in dealing with issues such as yours can help you and your neighbor understand each other’s opinions and find a solution. A mediator usually speaks to everyone involved and arranges a meeting between you and your neighbor. The meetings usually don’t last longer than a day and 80 per cent of mediations are settled before going to court with another 5 per cent resolved shortly afterward. The mediator communicates with both parties and sets ground rules for the discussion, makes sure that the views of both sides are heard, and suggests a way to move forward. If both parties are able to agree, they sign a mediation contract, which is not legally binding but which people tend to follow since it’s an arrangement they’ve worked out and signed.

Court

Taking your dispute to court is the last resort after you’ve tried all other means of solving the problem. Be prepared to provide evidence of damages and that you might not speak to your neighbor again. The cost of your lawsuit depends on your province and the size of your claim. If it’s between $5,000 and $25,000, your case will be heard in a small claims court, which means that you must represent yourself without a lawyer. If your claim is higher than $25,000, your case will be heard in Superior Court and you’ll have a lawyer available. It means that if you lose, you’ll have to pay your neighbor’s legal expenses as well as your own, plus the damages you’re required to pay.

Moving can be stressful for people, so just imagine how anxious it can make your pets. They can easily get stressed out when there’s unexpected activity in their home or when they’re introduced to a new environment. I’ve moved with two cats, a dog and five fish, and it’s not an easy task. These challenges don’t come with a formula solution, but here are some tips that should make the experience a bit calmer for your beloved companion(s):

1. Prepare an easily-accessible ‘overnight kit’ that has enough dog food, kitty litter, toys and grooming tools to sustain your pet and keep them comfortable during the first few days of unpacking.
2. If you’re moving out of the area, inform your vet so you can take records and any prescription medications with you. See if they can recommend another vet in your new neighborhood.
3. During the move itself, the best way to reduce stress on an animal is to keep them in the quietest area possible. If you don’t want to leave them with a friend or a kennel for the day (which is recommended), at least remove them from the action. This could mean emptying a bedroom on another floor and closing the door, or putting them in their carrier or kennel in the garage or car (take proper caution to ensure they’ll be at a safe temperature and that they have water and food if they will be there for some time). Make sure you check in on them regularly, and try to feed or walk them at the time you usually would; having some sense of a routine in the midst of all the changes will help a lot.
4. Take the pet to the new house in your own vehicle. Cats and small dogs can be put in a carrier in the back seat, which can then be secured with a seatbelt. A bigger dog can be moved in a kennel in the back of the car; you may need to put seats down if possible. Some animals feel more comfortable if you throw a blanket over their carrier during the car ride so they can’t see the environment changing outside.
5. Be careful when transporting the animal to your new neighborhood because if they get out they can easily get lost. Once they’re in the car, it’s important to not open the kennel until the pet is in the new home, even if the pet is usually well-behaved or docile. Give them a few days in the new home to adjust. Tip for cat owners: more and more people are keeping their cats indoors for safety reasons, and a move is a good opportunity to get them used to being inside as they won’t be used to being allowed out in the new home. Use this transition to your advantage.
6. Move the house before you move the pet. Set up as much as you can, even just in a room, before you introduce the animal to the new home. Confine them to a section of the house while they slowly adjust to their surroundings. Give your pet lots of attention and introduce familiar objects like toys or blankets as soon as possible. Make them feel as at home as you do!
7. After you move, make sure you update their tags or microchip information to the new address and phone number.
8. Are you planning on moving with fish? Fish respond strongly to stress and a move can be traumatizing, if not fatal. It isn’t ideal, but you can transport them short distances in bags filled with their old tank water (check with your local aquarium store for supplies and more details). If you have a long distance to travel it’s best to give them a new home with a friend, empty the tank, and buy new fish after you unpack.
9. Guinea Pigs also are known to suffer from change or being jostled around. Their hearts are particularly susceptible so please take care with guinea pigs and make sure they are transported in a warm, comfortable, small carrier.
10. Finally, more than one feathered friend has been known to fly the coop on moving day. Many people proudly announce that their bird has never flown off the shoulder, and sadly regret the complacency. Birds, like most pets, are very jittery about change. So even when the smartest parrot balks at the idea of being put in a cage, please do it on moving day.

The curb appeal of a home refers to the value of its exterior. If a home has curb appeal, that means it is attractive to the eye and inspires confidence. Great curb appeal helps sell a home faster and for more money because of the positive affect it has on buyers.

Unfortunately, a lot of homeowners overlook their home’s curb appeal when putting it on the market. This is a huge mistake. Not putting effort into making sure your home’s exterior is appealing to buyer’s can cost you the sale and drive down the perceived value of your home.

Keep reading to find out the reasons why curb appeal is an important factor in selling your home:

1. It’s the first thing buyers see

Your home’s curb appeal is the first thing buyers see when they drive up to the property. Buyers immediately start assessing the exterior and landscaping, forming a knee-jerk first impression. This initial reaction is very powerful. It instantly sets the tone of the tour and will have an effect on how buyers perceive the rest of the property. If their first impression is a negative one, then the rest of the home will suffer for it.

2. It reflects the maintenance of the home

The state of a home’s exterior usually matches the interior. If the grass is long or patchy, the paint on the house is faded or peeling, and there are cracks in the driveway, then buyers are going to be very wary of what other kinds of maintenance issues could be awaiting them inside and in places that they can’t see. These issues instantly translate to dollar signs and stress for home buyers, so it’s likely they will move on to the competition to avoid them both.

3. Bad curb appeal can be a deal breaker for some buyers

There are many buyers who won’t even bother going inside to see the rest of the home if they aren’t impressed with the curb appeal. If the exterior is unimpressive, buyers won’t be intrigued to see what lies beyond it. Remember that buyers will see all the houses around it, too, as they drive through the neighborhood and even as they are walking up to it. There will be direct comparisons all around, so if yours doesn’t stand out in a positive way, it could greatly hinder a sale.

4. It helps your home stand out from the competition

Bland or bad curb appeal makes a home forgettable. If yours looks great with a beautiful green lawn, colorful landscaping, and a freshly painted exterior, it’s going to stand out from all of the other listings that aren’t putting as much effort into it.

5. It increases the perceived value of the home

Small details, like dead patches of grass or old gutters, reduce the perceived value of a property just as much as larger details. Buyers look at everything as they are walking up to the front door, so if the curb appeal has any issues, they are going to notice them. Any problems will register in a buyer’s mind as reducing the value of the home.

Which do you think seems more valuable to a buyer: a home that has clearly been well taken care of over the years or one that is littered with maintenance issues?