Tips for Millennials Thinking of Buying a Home in Toronto and the GTA

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Millennials are a big part of the reason why housing prices in Canada have been on an upswing. With 65% of millennials saving money with intent to buy, we want to assist you in your next step of purchasing real estate. It’s important to get information from the right mortgage professionals in Toronto and the GTA

Investing in Toronto real estate is a smart decision, but it’s important to do so with care. A small mistake could have some purchasers stuck paying higher interest rates on your mortgage for years or even decades if not handled correctly from the start. That’s where a mortgage broker can help. Mortgage agents will work with you to get the right financing solution at the lowest rate possible.

It’s not always about getting a lower initial rate. If that rate goes up dramatically in the future, or if there are penalties and fees when you want to change your mind later, a borrower might end up paying more than they save. Although everyone’s situation is different, getting the right mortgage strategy to ensure the best long term situation is most common among borrowers who work with a qualified, experienced mortgage agent.

There are many different ways one might look at investing their money into property; buying as an investment versus living there temporarily vs renting out space and turning them into income generating properties – all of these require specific strategies depending upon what goals they wish to achieve in real estate.

For that reason Lending Logic Financial and Karla Badillo work personally with each client to  come up with the right financing solution, personalized rates, and terms to address their unique needs.

Are There Benefits to Being a Millennial When Buying a home or Getting a Mortgage in Ontario?

As any prospective homebuyers knows, there are numerous advantages to owning real estate.. You can use it to generate income, use home equity as collateral, or sell at a profit, and enjoy living in a place you can call your own. For some people, the independence of owning a home and not paying rent is important to them.

The Canadian government has created incentives for first time buyers to purchase a home. The program is intended to help make homeownership more affordable. Incentives include:

  • 5% or 10% for a first-time buyer’s purchase of a newly constructed home
  • 5% for a first-time buyer’s purchase of a resale (existing) home
  • 5% for a first-time buyer’s purchase of a new or resale mobile/manufactured home

If a first time buyer obtains an incentive, they may not have to save as much of a down payment to be able to afford the payments associated with the mortgage. However, the homeowner must repay the Incentive after 25 years, or when the property is sold. Wondering what incentives you qualify for? Contact Karla Badillo for any of your mortgage needs.

Understanding the Steps Involved in Buying a House in Toronto & The GTA

Owning a house is not only an investment but also requires commitment. You need to take care of your day-to-day life, as well as maintain the property itself and its grounds – which can be quite challenging for those who’ve never dealt with this before.

Missing mortgage payments or in the worst case defaulting on your loan can have you declaring bankruptcy and thrown into turmoil when it comes to future finances

That is why taking out a mortgage should involve lots of planning and many Ontarians choose to get  help from mortgage professionals. Here are some questions you should ask yourself when thinking of buying a home in Toronto or the GTA:

  • Can you afford owning a home in Toronto & the GTA?
  • Will you be able to make mortgage payments even after a change in income?
  • Are you in a financial position to put a good enough down payment to support the rest of the costs involved in the purchase?
  • Is your current debt a big burden?
  • Would it benefit you to wait for more favourable market conditions or until you have more savings?
  • Have you looked into EVERY cost associated with buying a house

If you’re looking for advice on buying your first house in Toronto & GTA, Karla Badillo and Lending Logic Financial have the expertise to guide you each step of the way. CLICK HERE TO CONTACT US

How to Finance Your First House in Toronto & The GTA If You’re a Millennial 

Most millennials think of the real estate market in Toronto & the GTA and wonder if they’ll ever be able to afford a house. As houses in the area are at all time highs, the market seems very inaccessible to young people in much of millennial culture. 

In actuality, there are many options millennials could afford when buying a house with a mortgage. With the First-Time Home Buyer’s Credit (FTHBC) introduced by Revenue Canada in 2009, it’s a great place to ease some financial stress. You can claim up to $5,000 for the purchase of a qualifying home in the year. To qualify you, a spouse, or common-law partner had to acquire a qualifying home, and you do not live in another home owned by you in the year of acquisition or four years after.

Is Now the Right Time to Purchase a House in Toronto & the GTA?

Timing can be extremely important when it comes to buying a house in Toronto or the GTA. Figuring out when is the best time to purchase a home comes down to various factors:

  • The condition of the Toronto & GTA real estate market. (Houses may be exceptionally expensive or more affordable)
  • Mortgage rates. (depending on the condition of the mortgage industry, interest rates on money you’re borrowing to buy a house could be relatively high or low)
  • Your personal financial situation. (Is it a better idea to buy now or save for a bit longer?)
  • The right house. (Have you found the perfect home for you?)

There is no one-size-fits-all approach to buying your first home, that is why Karlla Badillo offers her personalized mortgages services. It really comes down to your current situation, your financial plans, and your future plans. For financial planning, it is vital to get professional help to ensure buying your first home is quick, easy, and convenient. With over 7 years working in the mortgage industry, Karla Badillo has the experience you need to get the right financing solution at the right rate. We put our expertise to work for you every step of the way.

What to Know When Making a Down Payment

Before you decide to buy a home using a mortgage, it is necessary to pay a down payment. This is the amount of money you can pay up front toward the price of a home. In Canada, the minimum down payment is 5% for properties up to $500,000. However, some lenders could require more. If the price of the property is over $500,000 the minimum down payment is 5% for the first $500,000 and then 10% for the rest. 

If you can’t afford to own 20% of the home , you will have to pay mortgage insurance in addition to other home-ownership costs. Mortgage insurance is a fee that protects the lender from losses if you are suddenly unable to make mortgage payments. Making larger down payments will mean you start out with a higher share of equity in the property. Owning more equity gives you more financial options in the future. 

How Does Canada’s Stress Test Impact Buying Real Estate?

In order to get approved for a mortgage in Canada, you will need to undergo a financial stress test. Starting in 2018, all Canadian buyers must go through the federally regulated OSFI Mortgage Stress Test. This includes people who put at least 20% as a down payment. This affects homebuyers , as their finances are being scrutinized more closely before gaining mortgage approval.

The rules were changed in 2018 to ensure that buyers can afford to keep making payments even if mortgage rates were increased. In order to qualify for a mortgage, the test requires that you qualify for the Bank of Canada’s five-year fixed mortgage rate. The rate set by the Bank of Canada is a sort of benchmark that gives indication of your financial status. Understanding how the rate affects you helps prevent people from defaulting on their mortgages.

Another requirement is that the home buyer cannot spend more than 39% of your income on home costs. These costs include mortgage payments, utilities, taxes, etc. The final requirement is that your Total Debt Service ratio cannot be over 44% and needs to include all other debt payments. 

All these conditions can seem very daunting, especially for millennials thinking of buying a home in Toronto or the GTA. However, all these requirements are set in place to prevent Candians from falling into severe financial circumstances. Get informed by trusted professionals in the mortgage industry. CONTACT KARLA BADILLO HERE.

Stay Up to Date on Toronto & GTA Real Estate

Purchasing a home in Toronto & the GTA requires extensive research, knowledge, and and understanding of the home-buying process. Having a personal contact that can provide insight and experience in the real estate market is even better. That is why Karla Badillo offers 1 on 1 personal service to tailor to your needs. The team personally works with each client to come up with the right financing solution, personalized rates, and terms to address their unique needs.

There’s always an option to pay less, and with Lending Logic Financial, our reputation for customer satisfaction speaks to our ongoing commitment for helping each and every client find the perfect solution. We get the best rates and the best deal, every time. Our easy application process involves 3 simple steps and you will get approval in 24-hours. FOLLOW HERE FOR ANY OF YOUR MORTGAGE NEEDS