As a first-time home buyer, the process of finding, financing, and purchasing your first new home or condo can be quite daunting. It requires taking a big leap of faith, and the experience can be accompanied by stress and worry.
If you’re a first-time home buyer in the Greater Toronto Area, we’ve written up a helpful outline of some of the key steps that you should take into account on your home buying journey. By following these easy steps, you’ll find that the process is relatively straightforward. With the right knowledge and tools in your toolkit, along with the right team, you can let go of the stress and embrace this exciting opportunity!
Step #1: Obtain a Mortgage Pre-Approval
A lot of people avoid the step, but acquiring a mortgage pre-approval can save you quite a bit of time. Best of all, getting a pre-approval from the bank is simple. Just set up an appointment with your preferred bank, and they’ll be able to guide you through the process. This can also be done virtually.
The bank will generally be looking at the following:
- Your income
- Any debts you have, such as credit card balances or loan payments
- Your credit history and credit score
- How much you have saved up for your down payment
Once you’ve completed the pre-approval process, shopping for your perfect new home or condo will be a lot easier and quicker. Having a pre-approval allows you to pinpoint exactly what your budget is and how much your monthly payments will be, putting you in a position where you can find the perfect home for you much more easily, comfortably, and realistically.
Step #2: Get the Right People Involved
The next step in the process of buying your first new home or condo is getting the right people involved. Wouldn’t it be lovely if you could just do it all yourself? Well, you could, but since buying your first home is one of the biggest purchases you’ll ever make and a major investment opportunity, it’s better to have a full team backing you before you make the final decision.
In any given scenario, these are the people that you’ll need to be in contact with when purchasing your first home or condo in Toronto:
- A real estate lawyer – for all the legal implications of purchasing your home, and to help you review all legal documentation
- A lender – for an outline of your financing options on your home
- A real estate agent – to scour the market for your dream home and to help you with making an offer, negotiating, and getting the best price
Step #3: Go House Shopping!
This is probably the most exciting part about buying your first new home or condo – the search! Now that you have a mortgage pre-approval and a team behind you, you’re ready to get into the market. Screening listings online and going in person to check them out is an exciting step in the home buying process. Make sure you’ve refined your criteria and that you know exactly what you want – like number of bedrooms, your ideal neighbourhood, and so on. Once you’ve done this, pinpointing which home on the market suits you will be a breeze.
Step #4: Submit Your Offer
So, you’ve found your dream home or condo in Toronto and now it’s time to take the big step of making an offer. Ideally when you submit an offer it should be in writing, which automatically becomes a legally binding document. It will cover things such as the price you’re prepared to pay, how much down payment you’re willing to put down, the closing date, and any other things you and the seller have agreed upon.
Step #5: Closing and Moving In
There’s only one thing that’s more exciting than shopping for your new home – moving in! Your closing date is the date that you can move in to your new home or condo. The process of closing the sale and having you become the owner is straightforward, and most of it will be handled by your real estate lawyer.
Moving in means that it’s time to start painting, decorating, and making your new home or condo truly yours. What could be more exciting than that?
Buying a new home, townhome, or condo is a big investment and a decision that will impact your and your family’s lifestyle for years to come. If you’ve settled on the idea of buying a townhouse in North York, this blog post is for you.
Townhomes are a great option for families who are looking for their own home – with the spaciousness and privacy of a detached home – but with all the convenience and ease of condo living. As we outlined in a previous blog post about the benefits of townhome living, townhomes typically include multiple floors, designated parking spaces, and a shared wall with another home or homes. Townhome communities usually include shared communal spaces and are generally regulated by a homeowners’ association, which ensures that community maintenance and upkeep are taken care of and that everyone in the community abides by certain rules or guidelines. The benefits of buying a townhome include cost savings and affordability, amazing locations, single family living without the maintenance, a community vibe, and stunning shared spaces.
Not sure what the differences are between a townhome and a condo when it comes to home ownership, legal statutes, and privacy? Check out our blog post “Townhomes vs. Condos: Do You Know the Differences?”
If you’re going to buy a townhome specifically, there are unique considerations that you should take into account before making your decision. Here are 10 things to consider before you buy a new townhome in North York:
#1: Your Budget
First things first: before shopping for a townhome, get a mortgage pre-approval and know the budget that you’re working with. This will help you to shop smart, to not fall in love with properties that are out of your means, and to be able to act quickly once you’ve found “the one” (you’ll know it when you find it!).
Townhomes often offer good affordability because they’re less expensive to build compared to single detached homes, due to the high land costs in the Greater Toronto Area.
Using a mortgage affordability calculator is a good place to start if you’re not sure of what your budget is.
#2: Where You Want to Live
Location, location, location – it matters! Before buying a new townhome in Toronto, consider its location and if it’s in an area that you would truly like to live in. Things to consider about a neighbourhood include:
- Its proximity to major highways and transit options such as buses, subway or light rail transit (LRT) – both existing and upcoming/under construction are important to consider
- The schools in the area (their quality and whether there are options for French Immersion or Montessori, if you’re looking for those)
- The proximity of other community and family-friendly amenities such as daycares, libraries, community centres, restaurants, shops, grocery stores, salons, movie theatres, museums, attractions, and so on
- Its walk score and how many places you would be able to walk to on a daily basis (as well as whether or not the neighbourhood is pedestrian-friendly)
- Its bike score and how many nearby parks/green spaces there are to explore
- How close or far it is from your work, your family or friends’ homes, etc.
#3: Your Desired Lifestyle
How do you want to live? Do you enjoy walking to nearby shops and restaurants, or biking along natural trails? How do you get to work – walk, take transit, or drive? Do you have a family? How many kids? How about a dog? How much free time do you have on a typical weekday? How do you like to spend your weekends? All of these questions will have an effect on the type of lifestyle that you like to live.
Low-maintenance living can be yours with a townhome purchase, although townhome owners do have more maintenance to take care of than condominium or apartment owners. Because they’re smaller lots, townhomes are usually quite easy to maintain – and you won’t have to worry about exterior maintenance such as clearing snow or driveway repairs.
Many busy families today love the idea of maintenance-free living. A townhome lifestyle can give you more time to focus on what matters most: spending time with your family.
You’ll also want to find a townhome community that has a vibe that matches the lifestyle you’re looking for. Are the homeowners social and neighbourly, or do they stick more to themselves? Are there community events? Take these factors into consideration before buying a townhome.
#4: Homeowner Fees
Townhomes that have communal areas and shared common elements typically have a homeowners’ association, which is responsible for managing the neighbourhood’s common areas such as roadways and parks. If there’s a homeowners’ association, there will be fees associated with the management of these shared elements.
Before choosing a townhome to purchase, you’ll want to know whether it has a homeowners’ association and what the monthly fee costs, as well as what it covers or doesn’t cover. Make sure to factor this cost into your financial calculations and monthly budget.
For example, at our Bartley Towns community, the townhomes share a common element – the roadway – and so there is a monthly maintenance fee, although it’s quite low at just $113.95 per month.
#5: Mortgage Rates
Make sure you’re up to date on all the latest mortgage rules and regulations and take your time shopping around for the best rate. It’s always a good idea to compare mortgage rates from at least three different lenders.
When you buy a townhome, you don’t exist on an island – you become part of a community. This goes beyond the location or neighbourhood. A community consists of the people who live in the neighbourhood and the unique fabric that they weave together. Is the community diverse, friendly, and accessible? Do neighbours say hello to each other and maintain relationships? Do you get a good feeling when you walk through the community and when you visit the local shops? Find a community that feels a bit like home already, and before you know it you’ll be an integral part of it.
#7: Privacy and Personalization
Townhome communities have various degrees of privacy, based on the townhomes’ construction (how thick the walls are and how well they are sound-proofed) as well as the layout of the townhome designs (whether they’re stacked or not, for example). Make sure to talk to the builder (for a new townhome build) or neighbours (for an older build) to get an idea of what you can expect and to see if it suits your lifestyle.
You’ll also want to know what the rules are in terms of personalization, both to your new townhome’s interior and the exterior. Many townhomes have rules about what changes you’re allowed to do to the home’s exterior, for example.
#8: Style and Design
Just as you’d explore the features and finishes of a condominium or detached home before buying, you’ll also want to see if a townhome’s design suits your style before making the plunge. Details like flooring and kitchen countertops can be costly to replace, so you’ll save money and time if you purchase a home that you love right off the bat.
You’ll also want to consider the home’s layout and make sure that the floor plan works for you and your family.
Many townhome communities come with shared amenities or communal spaces such as driveways, roadways, parks, and sometimes even pools, gyms, or saunas. Determine which amenities are important to you and worth the extra cost, and then check out which amenities the townhome you’re looking at has.
Lastly, know your builder. Buying a townhome from a reputable builder with a history of building and developing exceptional communities will secure your investment and put your mind at ease.
BAZIS has a long reputation of designing luxurious living spaces with the utmost attention to detail. Being able to successfully combine visionary architecture and design with marketing and construction has turned BAZIS into a reckoning force in pronouncing the city’s landscape.
The company is known for the unique architecture and high standards of luxurious finishes of its various residences. Knowing that each of BAZIS’ developments is crafted with exquisite design, superior location and elaborate amenities will give you peace of mind.
The ease with which new home, townhouse or condominium buyers can get a mortgage fluctuates over time depending on borrowing limits, interest rates, insurance rules and more. If you’re thinking of buying real estate, you’ll want to know the latest market news and updates. The Canada Mortgage and Housing Corporation (CMHC) recently announced changes that may affect your ability to get a mortgage. This comprehensive blog will cover all the new rules and everything you need to know if you’re considering applying for a mortgage in the near future.
Canada’s New Mortgage Eligibility Rules
In response to the COVID-19 pandemic, the CMHC announced changes to the eligibility rules for mortgage insurance in June 2020. The new rules came into effect on July 1, 2020.
As the COVID-19 pandemic has affected millions of Canadians and has heavily impacted the housing industry due to widespread job losses, businesses closing and a temporary drop in immigration, the CMHC responded by changing its underwriting policies for insured mortgages. These rules were designed to protect Canadian home buyers and to reduce risk.
According to the CMHC, the following changes will now apply for new applications for homeowner transactional and portfolio mortgage insurance:
- Limiting the Gross/Total Debt Servicing (GDS/TDS) ratios to its standard requirements of 35/42;
- Establishing minimum credit score of 680 for at least one borrower; and
- Non-traditional sources of down payment that increase indebtedness will no longer be treated as equity for insurance purposes.
In effect, the new mortgage rules lower the amount of debt that you are able to carry (as an applicant for an insured mortgage), require you to have a higher credit score than before in order to qualify for CMHC insurance, and require that you use your own funds for your down payment, rather than borrowed funds.
Here is a more detailed breakdown, as summarized from MoneySense:
Change 1: Less Debt as a Percentage of Gross Income
Old rule: If a buyer had a good credit score and reliable income, they were previously able to spend up to 39% of their gross income on housing (which includes their mortgage, property tax, heating bill and half of condo fees), and they were allowed to borrow up to 44% of gross income once credit card, car payments and other loans were included.
New rule: Now, all home buyers are limited to spending up to 35% of their gross income on housing, and can only borrow up to 42% of gross income once other loans are included.
Change 2: New Minimum Credit Score Established
Old rule: Previously, in order to qualify for an insured mortgage, at least one borrower (or their guarantor) had to have a minimum credit score of 600 (which is only considered “fair”).
New rule: Now, the minimum has been raised to 680 (which is considered “good”). Not sure what your credit score is? You can check it for free online.
Change 3: No More Borrowed Down Payments
Old rule: Previously, home buyers could use unsecured personal loans, unsecured lines of credit and even credit cards toward their minimum down payment. (The minimum down payment is 5% for houses valued up to $500,000 and 10% of the amount over $500,000, up to $1 million.)
New rule: Now, borrowers must provide the down payment “from their own resources,” CMHC says. Basically this means that home buyers must use their savings, equity from the sale of a property, a non-repayable financial gift from a relative, funds borrowed from other liquid financial assets or against other real property, or a government grant.
The mortgage stress test is staying the same. This test requires borrowers to prove that they can still make their monthly mortgage payment if interest rates rise.
How the New Rules May Impact You
These rules make it safer and more risk-free to hold a mortgage. Homeowners will have fewer worries about being approved for a too-high mortgage that may become stressful to uphold over time. Many Canadians have over-leveraged themselves to afford the home of their dreams, which can cause anxieties and the very real risk of defaulting on your mortgage and foreclosure.
Even before the COVID-19 pandemic hit in March, mortgage delinquency rates (the rate at which homeowners failed to make mortgage payments in accordance with their loan agreement) were at the highest they’d been in nearly a decade. According to Equifax Canada, the percentage of Canadians who were three or more months behind on their debt payments in the final three months of 2019 was 1.2%, an 11% jump compared with the same period in 2018.
With the debt that Canadian households have accumulated rising, getting a mortgage that’s within your means is just the smart thing to do.
“These actions will protect home buyers, reduce government and taxpayer risk, and support the stability of housing markets,” said Evan Siddall, CMHC’s President and CEO.
If you’re not in the high-risk category of new home buyers, these rules may not affect you at all. They’re also beneficial in that they reduce the number of new home buyers who will be able to enter the market, which is expected to slow demand and balance out home prices.
And with today’s historically low interest rates, it’s a great time to jump into the market. You’ll be able to save on interest and have lower monthly mortgage payments, putting more money in your pocket amidst the general financial uncertainty that Canada and the world are currently experiencing due to the COVID-19 crisis.
When buying a new home in Toronto or any other urban area, many of the options on the market are either townhomes or condos. These two types of housing often elicit many questions from potential homeowners and bring up many points of confusion, especially when it comes to homeownership and shared/communal spaces. This blog post will break down the differences between townhomes and condos and will help you determine which one is best for you and your family.
First things first. Most people understand that townhomes (or townhouses) are individual houses that are built side by side, with one or two walls of each home being shared with the home next to it, whereas condos are a type of home that are often an apartment within a larger complex or building (although they can take other forms, including townhomes!).
Here are some important differences between these two types of home:
With a condo, you own the interior of the residence (your unit) only. Exterior parts of the residence, such as the building itself and the outdoor grounds, as well as communal areas such as gyms, party rooms, and rooftop BBQ areas, are owned by the condo association. Condo associations represent the condo owners and their interests. They’re run and funded by the condo residents and also have boards of directors. The role of the boards is to organize regular meetings, establish and maintain budgets, and enforce rules and regulations relating to the condo. If you’re a condo owner, you, therefore, are a joint owner of the communal and common areas. This means you will have to pay a monthly fee.
New townhomes in Toronto can be either freehold or condominium. If they’re freehold (like our upcoming Bartley Towns community of new luxurious townhomes at Eglinton and the DVP), that means that you fully own the house and also the land on which it is built, as well as any yard or deck surrounding it (similarly to how homeowners of detached homes own their homes and yards outright). Freehold townhomes do not have any monthly maintenance fees.
Condominium townhomes, by contrast, do not include land ownership. Similar to the condo apartments discussed above, residents only own the interior of their home, and the land on which the home is built – as well as the common areas surrounding it, if applicable – are jointly owned amongst all owners. This ownership is again managed through a condo association and involves a monthly fee.
Condos are governed by legal statutes, whereas townhomes are not. This means that condo owners have less autonomy since they’re subject to the bylaws outlined by the condo corporation. Residents may not be able to make changes to their homes and may face restrictions regarding the type of exterior decorations they’re allowed to put up, whether or not pets are allowed, rules regarding common areas’ use and open hours, garbage and recycling rules, and also whether or not they’re allowed to rent out their home.
By contrast, owners of freehold townhomes are entirely free to do whatever they like with their homes.
Condo owners generally experience a lower level of privacy, especially condo apartments, since they live in close quarters with many other residents and share communal entrances and exits. Owners of new townhomes in Toronto, especially freehold townhomes, are more likely to have a greater sense of autonomy, privacy, and independence.
A Summary of the Main Differences
To recap: condo owners only own the inside of their homes, and they’re joint owners of the building’s exterior and communal areas. Townhome owners may have the same situation if the townhome is a condo. For freehold townhomes, however, residents fully own their house and also the land it’s built on and the surrounding yard or deck. Freehold townhomes do not have maintenance fees, while condos do. Condos are governed by legal statutes, whereas townhomes aren’t. This means that owners of freehold townhomes have more autonomy. Lastly, people who live in freehold townhomes generally experience a greater degree of privacy and independence.
Questions? Get in touch by sending us a direct message on social media (Facebook, Twitter, or Instagram) or contact us at 905-532-0435. And make sure to register for our upcoming Bartley Towns community if you’ve decided that townhome living is right for you!
2019 Federal Budget Provides Incentives
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Millennials are the next generation of home buyers, but unfortunately, affordability continues to be a barrier to homeownership. This is particularly true in Toronto and areas in and around the Golden Horseshoe. It’s a topic that will be top-of-mind as Canadians go into the next election. Continue reading
Torontonians love their new homes. In a 2018 Globe and Mail Report, there will be well over 100,000 new pre-construction townhomes, Toronto between 2010 and 2020. With all the new houses built in the GTA, it’s easy to see new trends as they emerge, and new home buyers demand them.
It’s important to consider not only the upgrades that have *sizzle* but also the practical upgrades that are costly to do later, as well. These are things such as upgrades to ceiling heights, electrical, and insulation. Continue reading
Bartley Towns is the newest townhome development in Toronto from BAZIS. It is comprised of more than 100 freehold and condominium townhomes with 3, 4 and 5 bedrooms. Sizes range from 1,475 sq. ft. to over 1,700 sq. ft.
Bartley Towns is located at Eglinton Ave and Victoria Park Ave. It is adjacent to Bartley Park, a community park that is maintained by the City of Toronto. In the immediate vicinity of Bartley Towns, there are numerous schools, parks and natural areas, as well as O’Connor Community Centre which has great fitness facilities including a pool. Continue reading
Buying a new condominium is an exciting adventure. The downtown Toronto lifestyle is hard to beat. You have the ultimate freedom. Just lock the door and leave. The city awaits!
When thinking of buying a new condo, learn the steps to buying a new condominium or townhome in Toronto. Living in a home purchased directly from the builder means that you get to be the first one to live in your home and you get to choose exactly how you want it to look! Continue reading