Buying a home is a big step. At times, it can be frustrating and time-consuming, but the rewards are infinite. Once those final papers are signed, you can finally settle in, relax, and enjoy the dream home that you earned.

We thought it might be helpful to compile an FAQ which could help first-time home buyers navigate some of the challenges and expectations that come along with buying a home.

So, without further ado, let’s begin!

Q: What factors should I consider before even thinking about buying?

A: Purchasing a home is a rite of passage. With that being said, you should be absolutely sure that you're ready to take this massive step. Before doing anything, take a step back to assess your overall situation. Consider meeting with your financial advisor to discuss your financial health.

There is no shame in asking: am I ready for this? Remember—life is not a race, it’s a journey. This doesn’t mean that you'll be ready. It is a sign of intelligence and maturity to recognize that sometimes the responsible thing to do is to just wait.

Q: What is the minimum down payment I should put down?

A: Your down payment will be determined by the sale price of the home. In Canada, you are required to put down a minimum of 5% of the price of a home under $500,000. However, if you put down less than 20%, you will be required by law to purchase mortgage loan insurance. For example, if a home is priced at $500,000, you must put down a minimum of $25,000, but it is recommended that you put down at least $100,000.

For homes priced between $500,000 and $999,999, you must put down 5% of the first $500,000 of the purchase price, as well as an additional 10% for the portion of the price above $500,000. For homes priced at $1 million or above, you are required to put down 20% of the purchase price—no exceptions.

Q: How much home can I afford?

A: Before even making a move, it is a good idea to look at your household income to determine how much of a mortgage you can comfortably handle. Most lenders have added mortgage affordability tools to their websites which will provide an affordability estimate based on your total gross annual household income and down payment. From there, you can speak with a mortgage advisor who can help you to figure out the best options for your situation and secure you the best possible rate.

Q: How do I know what kind of property to buy? What makes one option better than another?

A: There are many options when it comes to purchasing a residential property. Do you want a single-family home? A duplex? A townhouse? A condominium? Ultimately, it comes down to your wants and needs.

For example, a condo may be less expensive than a detached home but comes with additional monthly costs in the form of condo fees. Townhouses are a viable and relatively affordable option for those who want more space than a condo, but these also often come along with additional monthly maintenance costs. A duplex is a great option for those who are comfortable with renting a portion of their space or in the market for a rental property, while some prefer the total freedom that comes along with a single-family dwelling.

For a more in-depth breakdown of the pros and cons of each option, check out this excellent resource from Bankrate!

Q: How do I initiate the process of securing a mortgage?

A: Securing a mortgage pre-approval should be the first step in your homebuying journey. As soon as you have saved enough for a down payment, we suggest calling your mortgage broker or specialist immediately. During the process, your financial institution will review your earnings, assets, and liabilities to determine the amount you are able to borrow.

A pre-approved mortgage is a great advantage when shopping for a home. It provides insight into the amount of home you can comfortably afford, signifies that you are a serious buyer, and lends additional credibility when purchasing. As Jamie Golombek, managing director of tax and estate planning at CIBC Private Wealth Management reminds us: an offer conditional on financing will be ignored right away in favour of an offer from someone pre-approved.

Q: What is a fixed vs. variable mortgage?

A: With a fixed rate mortgage, the rate and monthly payment will stay the same for the term of your mortgage. A variable rate mortgage, the rate will change with the prime lending rate set by your lender. For more information on the benefits and advantages of each, check out this excellent resource from

Q: What is Canada’s First-Time Home Buyer Incentive (FTHBI)?

A: The FTHBI is a program aimed at first-time home buyers which is designed to lower their monthly mortgage payments without increasing their down payment. To qualify for the incentive, you must be a first-time homebuyer with a household income of less than $120,000.

Basically, the government puts up 5%-10% of the fair market value of the property which must be repaid within 25 years of the date borrowed or when the home is sold, whichever comes first. Even though the loan is interest free, since it is a “shared equity mortgage,” the government is entitled to a share of any property value gains. But this also means that any reduction in property value in the course of ownership lowers the amount you will be required to repay.

Q: How do I make an offer? What happens if my offer is accepted (or rejected?)

A: When you have finally located your dream home, your McGarr realtor will draft a detailed offer according to specifications laid out by the Canada Mortgage and Housing Corporation (CMHC). An offer can be either firm, meaning it has no conditions attached, or conditional, meaning that certain terms must be met—for example, an offer could be conditional upon the property passing an inspection. 

When making an offer, you can reasonably expect to negotiate. Be prepared to make a deposit on the property, which will be integrated with your down payment, to show the seller that you are serious and that you actually have the funding to purchase.

Once your offer is sent, the seller has the option to accept the offer, make a counteroffer, or decline the offer by the conditional date and time established in the offer. If your offer is declined, the buyer has the option to submit another offer or walk away.

Q: What are closing costs and how much should I put aside to cover them?

A: Closing costs are one of the most significant additional expenses that come with purchasing a home. They usually include lawyer or notary fees to cover the registration of your mortgage, to ensure that there are no outstanding liens against the property and that all documentation has been completed and filed accurately.

The province of Ontario also requires homebuyers to pay a land transfer tax to transfer ownership of the property, which can be calculated using this helpful tool from Buyers are also responsible for disbursements—costs, such as property taxes and utilities, that the seller has paid in advance. It is safe to estimate that closing costs will amount to about 2.5% of the purchase price of your home, although this number can vary greatly.

Q: Do I really need a home inspection?

Short answer—Yes! You can read all about the myriad benefits of a home inspection in last month’s blog.


Buying a home can be a challenging, time-consuming process, but it all falls away once you step foot in your dream home for the first time!

At McGarr Realty, our number-one objective is making your dreams into reality. For answers to more questions like these, contact our team of passionate and enthusiastic REALTORS® in St. Catharines at 905-687-9229, or in Niagara-on-the-Lake at 905-468-9229. Or send us a message on our contact page, HERE.

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