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Buying our first home (Montreal)
Dortmunder
Registered User regular
Registered User regular
My girlfriend and I are starting to think about The Next Step. That is, moving out of our 3-1/2 apartment into something more family-friendly like a condo or *gasp* our very own house.
Problem: Buying a house is expensive and scary. Mortgages, taxes and notaries! Oh my!
Setup:
- We currently live in Longueuil (a semi-suburb just off the island of Montreal), right next to the metro station that provides easy access to downtown.
- My girlfriend (24) works downtown, she does not currently own a car.
- I (26) do own a car, but work a 5 minute walk away from our home :oops:
- Our combined house-hold income is between 85 and 90k / year.
- Our lease expires June 1st.
- We are guessing that one of the first steps in this whole process is visiting the bank and finding out what we can afford to buy.
Difficulty: We'd also like to have a baby within the next 2 years - so my girlfriend's income may be reduced.
Questions:
- What are some of the things to ask about at the bank?
- Is now a good time to buy a house? We don't really follow the market. Are prices likely to be lower in a couple of years?
- What kind of financial aid can be found for a young couple trying to purchase real-estate.
- Is it "better" to have a baby first? That is, is there more free gub'mint money to be had if you are trying to buy your first house?
- Anything we should be especially aware of that most people are not?
Help us H&A - you're our only hope :P
Problem: Buying a house is expensive and scary. Mortgages, taxes and notaries! Oh my!
Setup:
- We currently live in Longueuil (a semi-suburb just off the island of Montreal), right next to the metro station that provides easy access to downtown.
- My girlfriend (24) works downtown, she does not currently own a car.
- I (26) do own a car, but work a 5 minute walk away from our home :oops:
- Our combined house-hold income is between 85 and 90k / year.
- Our lease expires June 1st.
- We are guessing that one of the first steps in this whole process is visiting the bank and finding out what we can afford to buy.
Difficulty: We'd also like to have a baby within the next 2 years - so my girlfriend's income may be reduced.
Questions:
- What are some of the things to ask about at the bank?
- Is now a good time to buy a house? We don't really follow the market. Are prices likely to be lower in a couple of years?
- What kind of financial aid can be found for a young couple trying to purchase real-estate.
- Is it "better" to have a baby first? That is, is there more free gub'mint money to be had if you are trying to buy your first house?
- Anything we should be especially aware of that most people are not?
Help us H&A - you're our only hope :P
Dortmunder on
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This discussion has been closed.
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Bubble - there is one. If it will pop, when it will pop, how bad it will be when it pops, that's up in the air and very dependant on local conditions.
Expect to pay for taxes, fee's for upkeep or HOA, and extra shit you never knew you needed like a hose or lawnmower. If it's not new, have the cash on hand to pay for repairs. If your dishwasher leaks, or your plumbing backs up, your roof falls off - that's all you.
I hope you're kidding, but if you're not, you really need to talk to your accountant.
You raise an interesting point though. In the long term we would like to start a family, which is why we want to find some bigger living space. But maybe we don't need to own a house. Maybe it is smarter to rent a condo for a few years or something...food for thought...thanks.
Note: I'm basing this off US home ownership, and I have no idea if there are any significant differences between US and Canadian bank or government policies.
-Bank Questions - First, be willing to shop around. Banks aren't uniform, and if you're willing to do the leg work and talk to a lot of people you can end up saving a bundle.
As to questiosn - What kind of loans do they offer? What size loan are you specifically eligible for? How large a minimum down payment do they require, and what incentives do they give for larger ones (this question is huge, as it can offer you great deals with a large up front)?
-Time to buy - Each city's housing market is unique and does it's own thing, sometimes acting in complete contradiction of national trends. Unless you find a real estate agent from your area here on the board (or know one personally and are friends with them), your best bet is to do some internet research. You should be able to find monthly and yearly breakdowns of the various metrics, the most important being Selling price and Months on the market.
Unless you are desperate to move, your best bet is to wait until there is a lull in the market. It's worth it to continue spending money on rent with no return for a year, if you can save more than that amount on the cost of the house. I'm not sure what the professionals are like there, but as another option, you might possibly be able to find a reputable real estate agent/firm and purchase the trend information from the last decade from them, and possibly get a bit of free advice to boot.
- government aid and baby - I have no idea. In the US, I'm not even sure there's first time buyer assistance from the government (though some banks will "cut you a deal" on your first mortgage, theoretically). I don't THINK having a baby would matter one way or the other, but again, hell if I know.
Things you should be aware of - Taxes, especially school taxes, are a huge part of owning a home. Don't just shop for banks, shop for school districts. Once you've got your choices narrowed down a bit, get the tax and school info for the house. How have taxes changed over the last decade? What's the local schools regional ranking, graduation rate, police history, etc.
Your home inspector can either save you a ton of money, or fuck you royally. Splurge on them to get the best. An extra hundred or two might save you tens of thousands if they catch a major problem a lesser inspector misses.
Be careful of housing associations (Canada has these, right?). Ask if there is one before you sign, and if there is ask for a complete charter and to meet with representatives (and ask a few random people in the neighbrohood their opinions on them). A housing association has a lot of power, and can either help make your house a great place, or be a huge pain in the ass.
1. I agree with the shopping around with the banks. Also, see if your friends and family or people you trust know any individuals that operate as an agent to many banks at once. They may be called 'Financing Specialists' or 'Mortgage Specialists' and they will work *for you* to find a number of different options at different banks. Do be careful, and use someone you trust but it's worth it if you do find one of these people to help you out.
2. When you go to the bank, you will need to have with you:
a) The size of down payment you can make (the more you have, the more they will work with you).
b) Your financial information like your T4 and tax return, your available collateral in the car or other things like life insurance policies and so on.
3. Think about whether you want a self-contained house or a strata managed property. Personally, I go with a strata because it suits me better. Advantages for me are: don't pay insurance on the property (just contents), I don't have to manage the garden, pay for exterior painting or maintenance, smoke alarm testing and so on. However, maybe that doesn't work for you, because you like more privacy or want to change the exterior of the home, and so on.
The questions to ask yourself are in relation to: maintenance, privacy, cost (there is a monthly fee in a strata, usually), time, insurance, safety and personalization of your new home.
The strata does have control over many things, so think carefully and do talk to other residents and look over all their past meeting minutes, by-laws and financial statements. Generally, a place should have enough money to half-pay for the cost of roof replacement (the most expensive thing that usually comes through). Be cautious of everything in the minutes such as leaks, deck replacement and so on.
4. A buyers agent (a realtor working for you) has been a great advantage to me on my last two purchases. They cost nothing because their percentage profit comes from the sellers payment to *their* realtor and they work in my best interest. My realtor (used the same one both times) didn't even have any properties they represented in my chosen area and price range so they had no personal interest in showing me the places. They booked all the appointments and did all the paperwork for me. Hunt around for someone trustworthy and reputable. Ask friends and family and don't be afraid to meet with someone and see what they are like, but then say no if they aren't what you were hoping for.
My realtor assisted me with: finding a mortgage specialist, booking appointments and finding places to see, finding a home inspector and a notary and general advice on property markets/prices/things to watch out for, cautions, 'bad areas' and so on.
The agent can help you figure a great many things out, but if you have any of this pre-planned it just speeds things up:
Using MLS.CA or just a map, figure out the rectangular area(s) that you are willing to live in, based on street names.
The details like:
Important to us: distance to transit, 2 bedrooms/2 bathrooms, condition of carpets and paintwork, 1 x car space in secure area
Nice to have: fenced yard, quiet street, close to schools/shops, garden, gas fireplace
Not important: pets allowed, ground floor vs higher, in-suite laundry
5. Home inspection should not be an optional thought, its so important. As with previous posters, I agree, find someone good and pay them well. My inspections cost $375. They would have been $500 each, but for the fact that I was a 'referral from a friend' that I got a discount for (I didn't know the inspector personally). My inspections were for the full interior and all available exterior places in a managed strata. They should check the roof and maintenance work and advise you what kind of condition the exterior is in, even if you are buying an apartment. It will be more expensive if you pay for a real home to be inspected, of course.
6. Notary - they are pretty straightforward, they search the title on the place, make sure that there's no leins or bad stuff going on and while they are expensive (I think I paid between $750-$1500) its a worthwhile cost. They do up all the paperwork for the actual sale for you. Your realtor (if you choose to hire one) should do up the offer to buy paperwork for you and advise you about what to include and how to put conditions like the home inspection on there.
7. Price - really tough. There is a lull at christmas time / winter time because nobody likes going out and looking at that time. If you can wait till then you might catch a deal (I just did myself) but there's luck involved as well. Your realtor can tell you about what is a good time to buy and what the market in the area is doing. I don't think that real estate prices really go 'down' as such. They do plateau (they did recently somewhat in Vancouver) and interest rates do get better - but its generally a solid investment, so think more about planning the time of year and the interest rates from the bank rather than 'is it going to be cheaper in 2 years' because generally, its not, real estate is a great investment long term.
8. The baby - I don't think there's breaks in Canada for children, but I have to say, I don't have kids. There is a first home buyer grant in BC. This means you don't pay property tax on your purchase. For my second purchase, my property tax is about 8-10G. Pretty pricey, check and see if there's one in your province, probably is for first time buyers. My personal advice about the baby thing - think about how hard it would be to go and see places and get a sitter and to move all your stuff when you have a child. That's probably the only thing that makes a difference. You have more time to focus now than when you're a parent.
Since this is your first home, if you have RRSP savings you can borrow up to $20000 tax-free and interest-free under the Home Buyer's Plan. There's a big hidden cost to doing this though, namely that your $20000 doesn't grow as it would if you'd left it in the RRSP. If you assume even a moderate rate of return, compounded over 15 years that's a lot of lost growth. If you've already got a decent down payment, or you have the credit to borrow for the down payment, it's in your best long-term interest to do either of those instead of tapping into your RRSPs.
:^:
I'm still renting, but a friend of mine who bought his own place recently said that a buyer's agent was a huge help. A Montreal buyer's agent can probably answer a lot of the OP's questions that relate to the local market, and may know some answers regarding the baby question.