Buyer’s Most asked Questions

Buying a home/cottage is no easy task. It’s likely the biggest investment you’ll ever make in your lifetime and there are so many things you need to take into consideration, like where you should live, how much you can afford to spend, and when the right time to move is.

What do I need to qualify for a mortgage?

“In order to qualify for a mortgage, you’ll need to have the necessary down payment, show proof of employment, and proof of income along with your credit score. Above all, you’ll need to be able to prove to the lender you can afford the amount you’re asking to borrow and all future monthly payments. Your income stability, as well as your debt service ratio, will be assessed. 

In fact, there are four Cs when it comes to navigating the road to obtaining a mortgage and these include capacity, capital, collateral, and credit. What’s your capacity to pay back the loan on time every month? What money, savings, or investments do you have readily accessible? What is the value of the property you’re wanting to purchase and will it be enough to cover mortgage debts if payments are missed? Do you have a good credit score and a history of paying bills on time? Again, lenders want proof of stability. There are many options for qualifying for a mortgage and where to look such as private lenders, big banks or credit unions. It is a good idea to use a mortgage broker to find your best options.

How much of a down payment do I need to buy a home?

The minimum down payment requirement for anyone buying a home to live in is 5% on a home up to $500,000. Anything after that is 10% on the portion above $500,000. So, if it’s a $600,000 home, the minimum down payment is $35,000. For someone looking to buy an investment property, it’s usually 20%.

There are different savings plans and incentive programs available to those looking to buy a home, especially if you’re a first-time home buyer. Get in touch with a financial planner or your financiual institution to understand your options and see what you’ll need to do to save for a down payment.

How long does it take to buy a home in Muskoka?

“The time required to purchase a home varies. “I always recommend that my clients obtain a pre-approval prior to initiating their home search. Once the perfect property is found it can take anywhere from about one week to several months for the closing process and for you to take possession. The variance is based on the seller’s limitations around possession date or acceptance of a proposed possession date in the offer to purchase.”

Any conditions that need to be satisfied prior to a firm sale like a home inspection or financing condition will add to the transaction time. It’s important to note the lawyers required to complete the transaction may require some time to complete this on your behalf, so it’s a good idea to check in with them to determine their required lead time based on their current workload.

A final note on home buying!

You’re buying a home, and that should be your top priority.

“I think the mentality of a lot of buyers over the past decade has shifted from buying a home to buying an investment. I’m seeing a lot of buyers lose sight of what’s important to them to have in a home because they get caught up in this narrative of real estate being solely an investment. Sure, it is—to an extent. But housing is also a fundamental need and the location is key!

“After all, if you plan on spending five-plus years in a property, wouldn’t you rather buy something you love and can see yourself living in, versus buying something you think will appreciate a few percentage points more?

“My advice would be to focus on what’s important to you. Don’t let what you hear in the media affect your goal of buying a property.”