Own your future: Your step-by-step guide to homeownership in 2024
A stress-free path to buying your first home
Owning a home remains a priority for many Canadians, but the path towards this milestone can seem overwhelming.
In fact, nearly half (46 per cent) of Canadians say that the home buying and mortgage-application process has been stressful, and more than a third (34 per cent) have found it frustrating, according to a recent Maru public opinion survey conducted on behalf of TD.
Fortunately, with some planning and professional guidance, purchasing a home doesn’t have to be intimidating. Unsure about how to get started? Follow this step-by-step guide to begin your homeownership journey today!
Step 1: Save for a down payment (and more)
The first step on the path to homeownership is saving for a down payment. To do this, 56 per cent of prospective homebuyers surveyed said they are cutting back on non-essential expenses such as dining out, entertainment and vacations—and many are investing (52 per cent). Quite a few (32 per cent) intend to work with a financial professional to draft a homeownership plan.
Remember that you’ll need to set aside more than a down payment. For example, in Toronto, you’ll pay both Ontario and municipal land transfer taxes. There are also lawyer fees and moving expenses to consider.
Step 2: Figure out how much you can afford
Next, establish your homebuying budget. Use a tool like TD’s Mortgage Affordability Calculator for a quick estimate. Just enter basic information, including your down payment, monthly expenses and income. An estimate helps you determine what type of property you’ll likely be looking for, as well as which neighbourhoods are in your price range.
Don’t get discouraged if you can’t afford as much as you anticipated right away! While the survey showed many prospective buyers are hopeful they’ll be able to climb onto the property ladder within five years, 58 per cent will need two or more years to financially prepare.
Step 3: Get pre-approved for a mortgage
At this point, many homebuyers obtain a mortgage pre-approval. The pre-approval outlines what size mortgage you may qualify for based on factors such as credit score and employment history. With a TD Mortgage Pre-Approval, your mortgage rate will be held for up to 120 days, subject to conditions, so you can begin your house hunt with more confidence. You don’t have to worry about rates increasing during the hold period, and if interest rates decline, you can renegotiate. In addition to the peace of mind you can get with a TD Mortgage Pre-Approval, regardless of where you’re at in your homeownership journey, TD Mortgage Direct will connect you with a TD mortgage specialist who can provide personalized mortgage insight quickly and help you navigate common questions or concerns you may have about pre-approval and all aspects of the mortgage process in general.
Step 4: Find the right realtor
The vast majority of prospective homebuyers (83 per cent) either aren’t very confident in their ability to follow market trends or simply don’t follow them at all, so finding the right realtor is essential. Reach out to realtors who specialize in the neighbourhood and property type you’re looking for. Request references, and don’t be afraid to ask lots of questions. How many clients is the realtor representing currently? How will they communicate with you? What happens with competing offers? Find out as much as you can to ensure a good fit.
Step 5: Start seeing homes
Work with your realtor to schedule showings or attend open houses. There’s no right number of properties to see before making an offer, but expect to view several. When visiting a home, examine it thoroughly.
Some considerations are property-type specific. For example, for condos, you may want to consider whether future developments could impact your view. For houses, you’ll want to check the basement for signs of water damage. Inspect the condition of all appliances (if included in the listing), as well as walls, ceilings, fixtures, electrical switches and so on.
Step 6: Make an offer
When you’ve found a home you love, it’s time to make an offer. Whether the market is hot, cold or in between, prepare for negotiations. Negotiations go beyond pricing: they may also concern the deposit amount you’ll agree to pay up front if your offer is accepted, or whether the deal is conditional upon a home inspection.
Step 7: Close the deal
If your offer is accepted, it generally takes between 30 and 45 days to close. During this time, your lawyer reviews all documentation, including the Agreement of Purchase and Sale, which lays out the terms and conditions you’ve negotiated.
Finally, on closing day, you’ll make your down payment through your lawyer, who also receives the mortgage money from your lender, pays the seller, registers the property in your name—and, of course, hands you the keys to your new home.
Now that you know more about what to expect, are you ready to begin your homeownership journey? Connect with TD Mortgage Direct and speak with a mortgage specialist today. They’ll provide personal advice and insights and answer any lingering questions you might have.
About the survey
This Maru Public Opinion survey conducted on behalf of TD Bank was undertaken by the sample and data collection experts at Maru/Blue. 1,767 randomly selected Canadian adults who are Maru Voice Canada online panelists and are either a current homeowner (885 respondents) or prospective home buyer intending to purchase a home in the next five years (882 respondents) were surveyed from April 25th to April 30th, 2024. The results of this study have been weighted by gender and region. For comparison purposes, a probability sample of this size has an estimated margin of error (which measures sampling variability) of +/- 3.3%, 19 times out of 20 for homeowners and prospective home buyers. Discrepancies in or between totals when compared to the data tables are due to rounding.
