Your Toronto Home Buyers Guide

Deciding on buying a home is a big decision, and once you've done it you need to consider the practicalities. A good starting point is knowing your budget for what will probably be the biggest and most costly purchase of your life. Most people need a mortgage to buy a home, but in order to figure out your budget, there are other costs to take into account.

During the purchase process you will need a down payment on your home, as well as money to cover legal fees, inspection fees and the taxes on the sale. Once you have bought the property you will need to make a monthly mortgage payment, as well as covering home insurance, property taxes, maintenance and the cost of utilities.

How Much Can You Spend?

So, how do you work out how much you can afford to spend on a home? To do this, you need to understand how banks work out the maximum mortgage loan you can get. There are two factors. The Gross Debt Service means that your housing costs should be less then 32% of your household income. The Total Debt Service means that all your debts should be less than 40% of your household income.

Finding A Realtor

The next step is to find a home to buy and the best way to do this is to work with a realtor. This is a brokerage firm licensed by the Canadian Real Estate Association. The relationship between a client and a realtor is called an agency, and there are three types:

• With a seller (vendor) agency, the realtor represents the seller and tries to secure the best price for the home being sold.
• With a buyer (purchaser) agency, the realtor represents the buyer and tries to find homes that meet the buyer's needs.
• With a dual agency, the realtor may represent both parties, with the consent of them both.

As a buyer, it's best to stick with just one realtor as they all have access to the same information. Your realtor will discuss your wants and needs and will be an expert on the local market in Toronto.

You will be able to search the Multiple Listings Service (MLS) for your area. The realtor will sift through the available properties so that you need only see the ones that meet your criteria, and will be able to answer your questions on the property. Realtors will negotiate with sellers, draw up contracts and explain your financing options -- providing personal guidance through the procedures outlined in this home buyers guide.

These are some of the other important issues you need to consider when buying your new home:

- Making an offer
- Getting A Mortgage
- Additional Mortgage Costs

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