First-Time Home Buyer Checklist

Buying your first home is like a dream come true, but like every dream this dream too comes with a cost and that cost is a time-consuming and complex process. From touring properties, and exploring diverse neighbourhoods to assessing financial readiness, obtaining pre-approval for a mortgage, and navigating the intricacies of legal documents there are numerous factors to consider before fulfilling your dream of buying your own house, especially in a place like Alberta where the housing market is quite dynamic and competitive. 

So to assist you in this journey we’ve made a comprehensive checklist that will equip you with the knowledge, resources, and confidence needed to make an informed decision. 

Who qualifies as first-time home buyers? 

Before moving forward it is important to understand whom to consider first home buyers especially if you are considering applying for any provincial assistance programs. To qualify as a first-home buyer in Alberta you must not own any property or interest in any property anywhere in the world. However, it is important to note that this criterion may change based on the specific program you’re applying to. 

Checklist for Buying a Home 

  1. Financial Preparation- Before you start house-hunting it is always advisable to financially prepare yourself for such a huge step and unless you are buying a house with cash you would require a mortgage. Get a pre-approval for a mortgage from a lender so it clarifies your budget and strengthens your proposal. 
  2. Build up your down payment– It is always in the best interest to opt for a larger down payment option since it reduces your loan amount resulting in less interest rate and less risk to the lender. In Alberta, the minimum down payment required is 5% of the first $500,000 of the purchase price and 10% for any amount exceeding $500,000. Therefore, opting for a larger down payment reduces your loan amount and your monthly payments. 
  3. Explore First-Time Homebuyer Programs- There are some Alberta-specific incentive programs and some federal programs from which you can choose the most suitable one. These programs are as follows : 

Alberta-specific incentive programs 

  1. Attainable Homes Calgary (AHC)– The biggest hurdle for first-time home buyers is a down payment, therefore the main aim of the AHC program is to bridge this gap. AHC bridges this gap by providing you with a 5% down payment. However, to be eligible under this scheme you must pay $2000 upfront and annual household earnings must be no more than $131,424. 
  2. First Place Home Ownership Program- This program offers a unique opportunity to homebuyers. To be eligible for this program your combined household income should be under $130,000 annually, a personal net worth of $25,000 or less, and commit to reside in the unit for the first five years of ownership. 

Federal programs

  1. First-Time Home Buyers’ Incentive- This program is offered by the Canadian government where the government offers a shared-equity mortgage option for qualified first-time buyers. In this program, you can borrow either 5% or 10% of the purchase price and put it towards your down payment, and in return the government shares in the future value of your home. 
  2. Home Buyers’ Plan (HBP)- This program allows you to withdraw up to $35,000 from your Registered Retirement Savings Plan (RRSP) to use as a down payment on your first home.  
  3. First Home Savings Account (FHSA)- The FHSA was launched in 2019, this scheme allows Canadians under the age of 40 to contribute up to $8,000 per year towards a down payment on their first home.

Assemble your team of professionals

Once you have settled your financial matter you must then find an experienced real estate agent who can find and recommend properties to you, real estate lawyers who can handle the legal aspects of your purchase, ensuring a smooth closing and protecting your interests. 

Legal review and closing

Now after your realtor has found a property for you legal review and closing are the next steps which will also require the help of a real estate attorney. Now to ensure that your legal rights and obligations are protected:

  1. Scrutinize your Purchase Agreement- Verify details like the purchase price, closing date, inclusions/exclusions, and any contingencies. Identify and clarify any ambiguous language or potential concerns before you sign the agreement and examine that the purchase agreement accurately reflects the negotiated terms
  2. Conduct a thorough Title Search- To avoid any disputes in the future a clear title is a must. A clear title also guarantees that ​​you are the rightful owner, therefore always ask a lawyer to conduct a comprehensive title search on the property. 
  3. Review closing documents– It is really important to meticulously review all the closing documents. Closing documents include the transfer of the title deed,  mortgage documents, and tax statements note this is not an exhaustive list and depending on your plans might include more such documents. 

In the end, we hope that with this checklist you are prepared to take your first step towards homeownership. However, this guide is just the beginning of a home-buying process, from securing your financing to finally getting the keys to your dream home a lot of intricate steps are involved so it is really important to understand the entire process thoroughly. Therefore, always do your own research, and consult a qualified professional who will help you in making an informed decision throughout the process. 

At Juriscorp Law, we specialize in real estate transactions in Alberta, we understand the unique challenges faced by first-time home buyers and we are dedicated to providing exceptional legal services throughout the entire process of home-buying. We have helped 10000+ homebuyers with their real estate transactions and we can help you as well with your first-time home purchase. 

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