Quick Tips for Ontario House Hunters: How to Buy a House in Ontario in 2024

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Purchasing a home is one of the biggest financial investments most people will make. Taking this step in your real estate journey is one that comes with several considerations and checkpoints before making that final decision and submitting an offer of purchase. To help you get started on this exciting step toward home ownership, the industry experts at Royal LePage Your Community Realty have put together a list of quick tips for Ontario house hunters looking to buy a house in 2024. 

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Step 1. Saving up for a down payment

Your down payment is the amount of money you put towards the purchase of your home. If using a lender, the down payment will be dedicated from the overall purchase price, with your mortgage covering the rest. How much you will need to set aside for your down payment will depend on the purchase price of the home. 

This calculation chart from Canada.ca illustrates a basic breakdown of deposit tiers based on purchase price: 

Keep in mind this is just a general reference chart and may vary from one purchaser to another, depending on their personal finances and the home in question. For example, the lenders may require a larger case of purchasers in the category of being self-employed, or those with poor credit. 

Step 2. Stable income & building up your credit score 

Not surprisingly, your financial health and credit score is a primary factor in not only your purchasing affordability but your ability to secure lending. 

According to LoansCanada.ca, mortgage approvals may seem out of reach with the current status of interest rates and housing prices, but it is still possible for Canadians to get approved for a mortgage in Canada in 2024. 

When exploring lender options, hopeful buyers will find that lenders look at several factors, from down payment and income to your credit score. In 2024, according to LoansCanada.ca, the minimum credit score purchasers would need to have in order to qualify for a mortgage approval is 640, with 620-680 being the range in which the minimum credit score would fall. Where specifically the minimum requirement lands in your particular case will depend on your lender and the type of mortgage, ie. whether your mortgage is insured or conventional. 

Not surprisingly, along with credit history, your level of debt and income also has a significant impact on your ability to borrow. Also, depending on where your financial strength leans, whether it’s a high income, high credit score or low debt, this will also influence your borrowing eligibility. 

Prospective borrowers will also be subject to a mortgage stress test during the pre-approval process, the purpose of which is to determine whether or not borrowers would be able to stay on top of their mortgage payments if interest rates were to rise. 

Step 3. Know what your affordability is  

Purchasers in Canada will need to establish their affordability, which will be dependent on factors such as: the total income of all applicants who will be listed on the mortgage, current debt and monthly expenses (things like car payments, credit card debt and home ownership items like utilities and taxes). 

Wondering what your mortgage affordability is? 

Check out our free Royal LePage Your Community Realty Mortgage Calculator today!

Using sale price, down payment, loan term, interest rate, and other factors (see our “advanced details” drop-down menu, if applicable), our mortgage calculator will help you to quickly and confidently arrive at your home’s monthly payment amount. 

If you would like more information, please contact us to be connected with someone from our team so that we may assist you with any questions you might have.

Step 4. Narrow down your areas of interest 

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When house hunting, it’s important to be as clear as possible on potential areas of interest, to establish early on what locations your realtor should be focusing on, and to familiarize yourself with local home prices, livability, community, and all the other components that will make up the ideal place for you and your family to call home. 

Some important points to keep in mind when narrowing down areas of interest: 

• Location, location, location - it’s true what they say, location is absolutely key to establishing current real estate value and future value projections 

• Properties situated in areas with less room for future expansion tend to have more value, given the limited scope of new properties or development 

• Consider the areas’ local community, demographics (for example, a young family will want to settle in an area with other families where schooling, community centres and other family-focused activities and events are available and in close proximity)

• While it’s certainly convenient, homes and neighbourhoods in general that are in too-close proximity to busy areas and roadways can negatively impact resale, as excess noise and busy locales are typically less desirable to prospective buyers

Step 5. Factor in the closing costs 

Closing costs are a major financial consideration as it’s typically the buyer who pays most to all of them when purchasing a home in Canada. 

Closing costs vary from one transaction to another owing to purchase price, location and property type, amongst other variables, but the rule of thumb tends to be that buyers are advised to have 3% to 5% of the home’s purchase price set aside for closing. 

Some closing costs and considerations you should anticipate include (but are not limited to): 

• Provincial tax on property transfers; for homes purchased in Toronto, buyers will pay both a provincial and municipal land transfer tax 
• Property type: for example, a larger property with a more costly appraisal and sale price will cost buyers more in land transfer taxes 
• The potential for negotiation: this is not guaranteed or always possible, but there are scenarios where a highly motivated seller might consider covering some of the buyer’s closing costs 
• Making a down payment of at least 20% will allow buyers to avoid paying tax on mortgage default premiums 
• Your legal representation: when it comes to choosing a real estate lawyer to best represent your needs in the transaction, be sure to do your due diligence and compare a few lawyers and their costs 

Your real estate agent should also be able to help you navigate the closing process, which is why it’s so important to work with someone who is experienced, connected and dedicated to ensuring you have as seamless an experience as possible. To get in touch with someone from our award-winning team, contact us today to find out how we can help! 

Step 6. Get a mortgage pre-approval and lock in the best rate 

Before you start looking for your dream home, you’ll want to connect with your financial lender in order to get pre-approved for a mortgage. Once you are pre-qualified, that amount will help you to establish your price range of affordability within your budget. 

Step 7. Connect with the right real estate agent 

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As we always say, one of the most important preliminary steps for homeseekers and sellers looking to achieve their real estate goals, it’s so important to take the time to connect with the right realtor for you! 

Step 8. Look at properties that align with your needs and budget 

On your property wish list, there is no doubt that you will have as many “wants” as “needs” - and it can be hard to compromise on any of the items on your list! With a budget in mind, your realtor can help you to seek out properties that check off as many boxes as possible, while still falling within your range of affordability. Having a realistic mindset when searching for your dream home will help you stay focused on properties that meet your needs and stay within budget. 

Step 9. Make the offer 

In Ontario, where demand has the buying process consistently competitive, it’s important to strike while the iron is hot when you find the right home for you. Your realtor will play a vital role in helping you to navigate the offer process, and all the critical particulars that make part of that, including conditions and price. 

Step 10. Your closing date! 

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This is the big day and the feeling should be pure excitement! At this point, you’ve successfully navigated the process and considered all those final items such as: pre-move in renos, a deep clean of the home, informing your service providers and changing the locks. So get excited, because once those keys are in your hands - the home of your dreams is now a reality! 

Curious to know more about trending topics like this and the many communities that Your Community Realty serves? Check out our Community Information page for more information and active local property listings today! Our award-winning team will be happy to supply you with information on up-and-coming residential projects like the ones mentioned above - and more! Don’t be the last to know - let Your Community Realty keep you ahead of the game. 

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