Ontario Real Estate: What You Need to Know

• When submitting an offer on a house or condo, you will need to make a deposit payment up front, usually within 24 hours of your offer being accepted.  This is different than your down payment on the home, and the amount varies depending on the home you’re purchasing.  This deposit payment tells the seller you’re serious about buying the property, and they will “hold” this home for you until any conditions in your offer have been fulfilled.

• The down-payment is an amount the lender or bank requires you to pay by the closing date of your purchase if you’re getting a mortgage. This is paid to your lender (e.g. the bank) and is applied to the purchase price which reduces the overall amount that you are borrowing in the form of a mortgage. 
• Your deposit payment will be added to your down payment, so you’ve already paid off a portion of the home by the time you move in!

You’ll need to hire a lawyer to review your Agreement of Purchase and Sale, as well as any documents like Status Certificates or requisitions. The lawyer will make arrangements for Title Insurance, mortgage statements, any adjustments, ownership changes, payment of fees, keys, etc.

Lawyers’ rates vary from practice to practice depending on many factors such as disbursement fees, mortgage type, etc.

To find a good mortgage for your home purchase, you may wish to speak to:

• Your bank
• Your credit union
• Or a professional Mortgage Broker

A mortgage broker will shop around to different lenders and find the best interest rate possible for your purchase.  Some people prefer to work directly with their own bank or credit union, but a mortgage broker has access to a variety of other lenders and rates that your bank may not.  Using a mortgage broker does not cost you anything as they are paid by the lender you choose!

Just as with insurance, it’s worth it to shop around and find what suits your needs and credit situation the best.

Buying a home that isn’t full of defects and faults is an important part of the home buying process.  You may wish to have a professional Home Inspector look over the home before your purchase is firm.  They’ll be able to tell you what you may wish to fix immediately, any future concerns to look for, and anything that is in good working order.  An inspection can range in costs, depending on who you choose and what they’re looking over.

You can find professional Home Inspectors that specialize in 

• The overall condition of the home
• Septic systems
• Water testing
• Asbestos/AFFI inspections
• Fireplaces & Chimney inspections

When you acquire land, you pay a Land Transfer Tax to the province when the transaction closes. It is normally based on the amount paid for the land, in addition to any mortgage or debt assumed as part of the agreement to buy the land.

• 0.5% for the first $55,000.
• 1.0% for the amount from $55,000 to $250,000.
• 1.5% for the amount from $250,000 to $400,000.
• 2.0% for the amount from $400,000 to $2,000,000.
• 2.5% for amounts over $2,000,000.

Please note, if you are a first-time homebuyer, you are eligible to receive an exemption. Speak to your lawyer for the most up-to-date information.

Depending on how much your Down Payment is on the home, you may be required to purchase Mortgage Insurance. This type of insurance is needed to guarantee that the lender will be paid if you miss any mortgage payments. Anyone who puts 20% (or more) of the purchase price down on a home is not required to purchase Mortgage Insurance.

However if you put less than 20% down on the home, your Mortgage Advisor will instruct you with how to set up this required payment.

Your lender will require that you have House Insurance set up prior to your closing day.  They want to ensure your home is well protected!  Coverage may include things like fire damage, theft, natural disasters, liability and more.

Remember, you may be eligible for discounts from your insurance provider if you bundle your coverage with your auto or life insurance.

• A municipal portion – contributing to the city’s infrastructure and services
• An education portion – contributing to the elementary & secondary school system in Ontario

• The size of the land your home sits on
• The size of your home and its known improvements
• The area/neighbourhood in the town or city where you reside

You have many options when it comes to paying your property taxes to your municipality.

• Your mortgage advisor can set it up so your property taxes and mortgage payment are paid together, direct from your bank account in one combined payment.
• You can choose to pay your property taxes separately from your mortgage, either on a monthly or quarterly basis with the city.  You will need to set up this account with the city prior to closing day.

Moving costs are something to consider, whether you’re making the move across town or across the country! You may choose to rent a truck and move everything yourself, or you may want to hire a reputable moving company to do the heavy lifting for you.

Make sure they are insured and bonded, and that they come with the gleaming recommendation from people you trust. You don’t want to leave all your belongings with people you don’t know!

Prior to moving in to your home on closing day, it’s important to have all your utility accounts set up.  They will begin billing you for these services on closing day, so it’s important they’ve been made aware that you’re the new home owner.