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Buying a home is probably the single largest investment you will make in your lifetime, therefore, identifying your needs, desires, and budget is of paramount importance particularly as a newcomer to Canada because the housing market is unfamiliar. To begin, choose an agent with whom you feel comfortable and who has experience working with overseas buyers. Particularly important will be an agent who is familiar with the latest technology so they are readily accessible via e-mail or who does not mind making overseas phone calls and faxes. The agent should be able to send listings via e-mail so that you the purchaser can review properties before arrival. Homes tend to sell very quickly so even if houses sent for review have sold you should have a general idea of the type of house you can purchase within the parameters you have given. Your agent should also have a good referral network of professionals such as lawyers, home inspectors, and financial experts who have experience with overseas clients. All these factors will facilitate a smooth and enjoyable purchase of your first Canadian home! A few common questions many people ask before they purchase:
*Should we rent for a couple of years and save more money towards a larger down payment? - Only you can make that decision. In the past however, prices occasionally have been seen to increase by substantial amounts over short periods of time. By the time you save the money for a larger down payment, the market may have moved further away from you. Also bear in mind the rental vacancy rate is extremely low and your choice will be limited by availability.
*Is this a good time to be investing in a home? - Real estate prices have been relatively stable over the past three years and interest rates are exceptionally low compared to the recent past. These two factors currently make home ownership very attractive and affordable.
*Will real estate values increase? - No one has a crystal ball. However, if you track the market over the last 30 years, the value of real estate has increased a whopping 980%. On average, real estate prices have increased 87% in each decade since 1965. History shows that real estate is a solid long-term investment.
*How is real estate different from other investments? - Unlike other investments, your principal residence is tax-free. When you sell your home, any profit is not subject to capital gains tax. In addition, if you work out of your home, a certain portion of your expenses can be deducted from your income taxes.
*What are the differences between buying a new home and buying a resale home? - Both new homes and resale homes have advantages and disadvantages, but as a rule of thumb, resale homes usually cost a little less than new homes in the same area.
 NEW HOME CONSIDERATIONS
*You may have your choice of finishings
*Builder warranty is usually available.
*Neighbourhood amenities such as schools and shopping may not be complete.
*Children may have to be bussed to schools in other neighbourhoods.
*The 7% Goods and Services Tax applies to new homes.
*Many builder sell from plans only so you cannot see what your buying. If there is a model home often the upgrades shown are not included in the purchase price.
*Closing costs are considerably higher than for a resale home.
RESALE HOME CONSIDERATIONS
*The home is usually in an established neighbourhood.
*Schools, shopping and transit are usually nearby and ready for use.
*Landscaping is usually complete and fencing has been erected.
*Other improvements such as a finished basement, a pool, a fireplace, and various other upgrades may be included at a discount.
*You can see what you are buying.
*GST does not apply to the purchase price.
RENTAL INFORMATION
Currently the rental market is at a very low vacancy rate and availability will depend upon the market conditions when you arrive. Generally rental properties are taken almost immediately they are listed so decisions are usually made very quickly and you may find your self in a situation where you may be competing with other parties. All rental listings request a credit check and quite often references from employers. As a newcomer to Canada it can pose a problem in some cases because you do not have any credit history in Canada. You may be requested to pay 4 to 6 months rent in advance to alleviate this problem, and bringing as much credit information with you as possible should help.
All properties are unfurnished but are equipped with a stove, fridge, and generally clothes washing facilities and the minimum rental term is one year. In the rare circumstance we are able to locate a furnished rental property with a lower rental term then you will be paying a premium price of approximately added onto the regular rental cost of a similar property. It is recommended that a decision to rent be considered very carefully in terms of purchasing because ironically it can be easier to secure a mortgage than it is to rent a property and the monthly costs can be very similar.
NEWCOMERS TO CANADA
Capital has recently introduced a new programme specifically designed for newcomers to Canada. Now qualified homebuyers who have immigrated to Canada from another country or have been transferred to Canada by an employer can qualify for a GE insured mortgage with as little as 10% downpayment.
Borrower Qualifications for 10% down:
* Primary applicant must be employed by an established company at a minimum salary of 60,000 dollars.
* Must have immigrated and/or relocated to Canada within the last twelve months.
* Must have correct documentation such as:
1.Proof of full time employment.
2.Income verification.
3.Work visa and/or immigration visa
4.International credit reports or letters of reference from recognized financial institutions confirming acceptable mortgage and other financial dealings.
5.Offer to purchase (this is the for the property being bought in Canada).
GE is also offering an initiative for newcomers to Canada to put down only 15% if they have secured employment but is either on contract or still on probation. The same terms and conditions as the 10% initiative apply. The benefits of this particular "Welcome to Canada"-programme is that you are ale to purchase right away within the first year of arrival to Canada. Prior to the changes made by GE there are several scenarios in which a mortgage can be secured. These are still in effect and are certainly beneficial to those who have not secured employment before or as soon as they have arrived here.
The following is a recap of the mortgage options:
1.If you have at least 35% of the purchase price to use as a deposit then a mortgage can be secured as soon as you arrive here even if you have no employment! All financing arrangements can be made before you arrive in Canada and once organized then a house can be purchased as soon as you arrive. This is a very straightforward conventional mortgage and a real bonus in this situation is that the mortgage can be guaranteed at 1% below the posted rate!
2.Even if you have just arrived in Canada and have no job but you have approximately 15% of the purchase price you can still secure financing. This is based upon a conventional first mortgage and a second mortgage. For example:
House Purchase Price 200,000 dollars
15% Downpayment : 30,000 dollars
1st mortgage totals 150,000 dollars and the second will be 20,000 dollars.
The benefits of this method of financing are; a home can be purchased as soon as you arrive without spending your money renting for a year and having no return for this outlay; and because you are securing a conventional mortgage there will be no insurance fees to pay. There is a higher interest rate however on the second mortgage but invariably the monthly payments being made can be very similar to those of a rental property. Given that good rental accommodation is difficult to secure and taking into consideration the ease of securing financing to purchase a home many newcomers opt to purchase rather than rent. Financing is calculated on an individual basis and can be done initially by phone, fax., or on-line.
If you would like further details please contact Renate Penkett at 001 905 337 1704 (direct line), or fax. 001 905 337 0503, or e-mail: rpenkett@cogeco.ca web site: www.relocateontario.com/world
MULTI LISTING SERVICE
The majority of homes sold in Canada are sold through the multi-listing service.This is described as a co-operative marketing system to ensure maximum exposure of properties for sale or for rent. Fundamentally it is a central registry of properties which is used by Realtors to match buyers with homes on the market.
What are the advantages to you the buyer?
The major benefit of the MLS is that it allows the Realtor (estate agent) to search for properties without the buyer going from one Realtor to another! This gives the homebuyer an extraordinary amount of choice and flexibility because the Realtor will be searching for suitable homes from a massive database of properties that are listed for sale. All real estate agents have access to the same database therefore all companies will have the same properties available to show the purchaser. Shopping from company to company will not only waste your time but there may be less of a commitment for an agent to work exclusively for the buyer. This agent will be putting a lot of time and effort into searching for properties and working with the buyer to secure a successful purchase. Loyalty from a buyer is therefore very important.The absolute key to a successful purchase is that you should choose one Realtor with whom you feel comfortable and entrust that person to search for appropriate properties.
*For detailed information related to the purchasing of a property in Canada, click on Renate Penkett's photo for a direct link.
 INSTANT CURRENCY CONVERTER!
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Renate Penkett
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EMIGRATING TO CANADA?
I will help you find your home, farm, business or investment property. Specialising in TORONTO, OAKVILLE, BURLINGTON, MISSISSAUGA, BRAMPTON and surrounding areas. This service is absolutely cost free to you.
*Relocation Specialist since 1987
*Access to all Ontario listings
*Moving to another Province? I can help!
*Professional and experienced
RENATE PENKETT B.A.
RE/MAX NORTH PARK REALTY INC.
Tel: 001 905 337 1704
Fax: 001 905 337 0503
e-mail: rpenkett@cogeco.ca
www.relocateontario.com/world
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