As an immigrant myself, I know how easy it is to make mistakes when buying a home in Canada. Similarly buying a house in Calgary and area is no exception to home purchasing challenges. When you are a first time buyer in Canada you will naturally have many questions.
To start, it is important to know what the requirements are to buy a house. You might also want to know who can buy a house or how to get a mortgage in Canada.
Even more challenging is that immigrants can easily be taken advantage of and become victims of fraud schemes. Here are the top ten mistakes I see immigrants making when they are excited to buy a house.
Top 7 Mistakes Buyers Make About Home Ownership
One: Your Dream House does not Match Your Income and Savings
Immigrants often dream of having a big house with fancy appliances and fixtures. It is better to start with modest and practical expectations than having burdensome debt.
Two: You Have Not Put a Savings Plan in Place
Open a bank account close to where you live. Withdraw money from there. Most importantly, avoid using generic ATM bank machines as they will charge you $3 to $5 each time you withdraw money. Discipline yourself to save a percentage of your monthly earnings. Also, avoid ever going to loan companies such as Money Mart. They will charge you 30% or more to borrow their money.
Three: You Have Not Built a Strong Credit Rating
A credit score is between 300 and 900. The higher your number the easier it will be for you to arrange a house mortgage. You can build your credit by using your credit card wisely. Understand how your credit card works and pay it off each month.
Four: You Do Not File with Canada Revenue Agency
You will not be eligible for GST/HST credit and Canada Child Tax Benefits and other cost saving features if you do not yearly file your income with Canada Revenue Agency. If you do not file a yearly report, you risk paying a fine and possibly jail time.
Five: You Do Not Read or Understand Legal Documents
Often a deal is not a deal. Often, a house may need repair that can cost hundreds if not thousands of dollars to fix. Furthermore, if you place a down payment on a house and you change your mind, that could cost you money.
Six: You Do Not Understand the True Cost of Owning a House
Sometimes renting an apartment or a house is more cost effective. Houses in Canada have heating costs that warmer countries to do not incur. Even more, there are annual taxes, water and electrical bills and maintenance of the home. If you rent your home and the roof leaks, the landlord is required to pay for a repair or replace the whole roof. When you own a house, a leaky roof is your responsibility.
Seven: You Try to Buy a House on Your Own
Many mistakes can be made, as described by the challenges listed above. Therefore, finding a realtor who you can trust can make all the difference. Look for a realtor who will:
- Listen to your needs, wants and dreams.
- Tell you the truth about the Calgary and area real-estate market and the house you want.
- Support you through the exciting, but sometimes scary process, of home purchase.
- Negotiate a good price for you.
- Help you arrange for a house inspector, lawyer, and other professionals and trades.
- Understand the unique challenges of being a first time buyer and/or New Canadian.
Note: It can also help if your realtor can speak your home language.
In the end you can avoid making these seven common mistakes. Be an informed buyer when making your home purchase. I want you to find the heart of your home. I am here to help you move through the process with ease.