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Owning a home is quite certainly on most people’s minds. But given the current situation of the growing real estate prices in the GTA, this may seem like a pipe dream to many. Purchasing a house for the first time, finding a bigger property, or even simply moving to a more desirable location could be out of reach financially.

Budgeting a large amount for something as significant as a home can be daunting, but here are some tips to help you save up.

Determine how much money you need

Take into account what you can afford to spend on mortgage payments, including potential maintenance fees and various other expenses. If you currently own a property that you will sell before moving, there will be equity from which to take. However, you also need to figure out where to live and the size of the home you need. Where you choose to lay your hat will be a major factor in the cost of your new house and what you need to budget.

Set aside some monthly funds

Tuck away a portion of every pay cheque you receive into a savings account from which you purposefully do not withdraw. Your income (as well as your spouse’s or significant other’s income if the home will be a co-purchase) also plays a significant role in the size of the mortgage you will be able to obtain.

Adjust your lifestyle

Cut back on unnecessary purchases and make some frugal adjustments to your lifestyle, if needed, such as packing lunches and dining at home, and skipping outside entertainment activities for now. This will help you sustain more of the money you earn each month to put towards a new home.

Mortgages are obviously in place because only the illusive one percent can possibly afford buying a home outright. That means the rest of people need to save up for at least the down payment, with enough left over and a steady stream of income to manage monthly payments and other regular bills, such as hydro and utilities. Simply set realistic goals and give yourself some time to make it happen.

A real estate lawyer works to protect his or her clients when they purchase or sell a home, helping to ensure that the transaction is completed well—regardless of which side of the deal they are on. There are many facets of a purchase or sale that real estate lawyers deal with on your behalf so you can rest assured it will go smoothly.

Agreement of Purchase / Agreement of Sale

A real estate lawyer reviews a wide range of legal documents on their clients’ behalves, including the Agreement of Purchase or Agreement of Sale. These items detail the negotiations involved and range from an irrevocability deadline and completion date to matters of Harmonized Sales Tax and a title search.

Title insurance

He or she might also arrange for the client to obtain title insurance. Although this is not required, a real estate lawyer may recommend it to better protect you, the property owner. Coverage includes title issues that affect you from having clear ownership of the home, title fraud, liens that a previous owner may have had, public record or survey errors, a structure that requires removal by interfering with a neighbouring home, and related issues that impact your ability to sell or lease down the road.

Other issues that may arise

Real estate lawyers are also responsible for ensuring that no claims are listed against the home you purchase, as well as checking that property taxes are up-to-date and that you (their client) have a valid title upon closing. Some of their other roles include calculating the land transfer tax due, drawing up the applicable mortgage documents, exchanging legal documents and keys with the seller’s real estate lawyer, plus closing the transaction while ensuring all financial and legal conditions are met.

As a seller, your real estate lawyer also handles potential title issues that occur, prepares the deed to your home, and helps you negotiate the terms and conditions with your buyer. But no matter whether you buy or sell a home, having a professional in your corner is crucial to avoid as many complications as possible.

The challenges of having a mortgage extend far beyond just obtaining one in the first place. Monthly mortgage payments are non-negotiable and missing them can quickly put you in arrears. This means you owe money you simply should have paid out already. Tax arrears are similar in that you owe money to the government. However, both situations translate to putting yourself in significant financial trouble.

Mortgage Arrears

With a mortgage, your Ontario lender can take legal action to reclaim their money, pursuing what is called ‘power of sale’. This means you would be evicted from your home and they would sell it in order to get their money. From start to finish, that process could take an approximate period of three months.

Although you would receive any additional profits from the sale, you would incur the applicable power of sale fees and still be left without a home. You may stop the power of sale before it is carried out, but this requires help from a financial expert.

Tax Arrears

With taxes, the Canada Revenue Agency has the right to redirect your tax refunds or tax credit to pay off your debt. They may alternatively take action to garnish your wages, or even seize your property if needed—including your home, which they can sell at auction. You also incur the significant interest rates associated with tax arrears, making it even more unattractive to find yourself in this position.

Avoiding Arrears

Neglecting such significant payments as taxes or mortgage can result in other serious financial issues. When it comes to obtaining any loans, you may be forced to go through only a private lender. However, you may simply be forced to sell your property and pursue major debt solutions.

Obviously, it is best to make payments on your mortgage and taxes as quickly and efficiently as possible. If you find yourself struggling to keep up with these, however, it may be necessary to seek professional assistance from a financial expert. Tax or mortgage arrears are serious and can lead to additional hardship.

Beginning the hunt for a new home can be both stressful and overwhelming. Do you look first and then seek a pre-approval, hoping the dream home you stumbled upon will wait for you? Do you try to find a lender first and then explore open houses and enticing listings, not sure of how much you need to spend before you apply for a loan?

In any case, when it comes to finding the right mortgage, it can be helpful to speak with a professional mortgage broker. For starters, they are privy to information from a variety of lenders and will conduct research based on the information their clients provide to find their best match for a loan. It is their job to explore the market so mortgagees don’t have to.

Obtaining a Mortgage

Their role is to be the eyes and ears when it comes to obtaining a mortgage, investigating options on behalf of their clients, then compiling and presenting them—perhaps with recommendations on which one to pursue. This is especially important for new homebuyers, but a useful tool for anyone who needs to secure a mortgage.

How are they Paid?

Mortgage brokers are usually paid by the lenders or they charge their own broker fee. Further, mortgage brokers offer expert insight into the industry to help people save money. They stay abreast of the real estate market, regularly exploring trends and offerings. Consider them a wealth of knowledge about real estate and mortgages for you to tap into.

The Matchmaker you Need

Simply put, mortgage brokers connect their clients to mortgage lenders who can fulfill their individual needs at the lowest rate possible. They are an effective strategy to find the most suitable mortgage lender. Essentially, mortgage brokers play matchmaker for people seeking the best rates and long-term loans.

When searching for a home, there are a lot of complex and unforeseen circumstances to look out for. Enlisting the help of a dedicated professional to offer assistance can help ease some of that inevitable stress.

Contact us for more information about our approach to lending and to learn more about the benefits of working with our experienced team.