| Buying

We’re feeling our clients’ tension rise as their hope to find an affordable home in Toronto right now wanes. But we’re here to tell you not to give up hope just yet. The thing about Toronto real estate, or any real estate for that matter, is there are always options out there. You just need help finding them. The key is to keep an open mind, and be realistic about how much your budget can get you in today’s market. Here we offer seven smart ways you can afford a home in Toronto right now.


1. Avoid the Averages
Although we get you want that prized detached home, you have to avoid the average sized home if you want to make your purchase affordable. Instead, think of this as your starter home and set your sights on smaller homes – condos. Toronto and the surrounding area is a paradise for condos where you’re sure to find something in your price range. And you’re also sure to find a home that checks a lot of your boxes, other than a backyard or owning a semi or fully detached house of course.


2. Pay Attention to Interest Rates
Rumour has it interest rates are going to rise. This has been expected for a while, but we believe it’s going to be a reality sooner than later. So your goal is to get pre-approved now. If you can lock into lower interest rates, you can take your time looking. More importantly, you’ll understand how much (if any) money the banks are willing to lend you. This sets your budget for your Toronto home search.


3. Look Beyond the Downtown Core
Sacrificing a neighbourhood isn’t something we often tout as a good idea for buyers. We want our clients to find the home they love, in an area that suits their lifestyle. However, there’s a lot to be said about finding new areas you might not even know about. The GTA is big, and goes far beyond what many realize is the borders of the area. There are so many beautiful neighbourhoods just waiting for you to find them. It can be difficult to know just how far and wide you should look, so having a savvy real estate team behind you (blush, yes, we mean us) is the best way to find awesome neighbourhoods that might be calling your name.


4. Compromise a Little (Or a Lot!)
A real estate agent worth their weight in gold knows it’s pretty near darned impossible to check every single box on a clients’ wish list. BUT it’s possible to find a home that checks most if not all of your needs. We italicized needs because needs are very different than wishes and wants. Needs are the must haves you really can’t live without, and you have to perfect your needs list if you want to find a home in a market with low inventory. So what would we consider needs? Deal breakers such as:

• Cost: You can only afford what you can afford!
• Commute: How far are you willing to travel into work?
• Transportation: If you need public transit this is a major consideration.
• Bedrooms and bathrooms: Base this not on what would be nice to have, but what you need. For example if you’re expecting to have a family, you need 2 bathrooms and a few bedrooms, whereas if it’s just you or you and a partner, one bathroom and a single bedroom might be enough for now. Another consideration is if you work from home. Do you need a workspace?
• Safety: You want to be comfortable with how safe you feel in a neighbourhood.
• Schools: This is very important for parents or couples planning to raise a family in the home.
• Proximity to amenities: The amenities will vary, but the ones important to you should be considered when choosing your home.
• Parking: If you have a vehicle or two, this becomes pretty important as well.

Everyone has their own deal breakers, and we’re not here to judge. But just keep in mind, some things might not seem as important in the long run such as granite countertops or a view of the lake.


5. Know Your Funding Options
There are four funding options offered by the government that can help make a home more affordable including:

1. Home Buyers’ Plan: The Home Buyers’ Plan (HBP) lets you withdraw money from your registered retirement savings plan (RRSP) to buy a qualifying home without penalties or withholding tax for up to $35,000. This money is like a loan to yourself and goes towards your down payment. You have 15 years to repay it.
2. First-Time Home Buyer Incentive: This is available for first-time buyers with the minimum down payment for an insured mortgage. The government will pay a portion of your home purchase and then own equity in your home. Keep in mind that equity than has to be paid to them either when you sell based on your home’s selling price, or after you’ve owned the home for 25-years at its current value.
3. Home Buyers’ Amount: This is a $5,000 non-refundable income tax credit amount for up to $750 in federal tax relief.
4. GST/HST New Housing Rebate: If you buy a new build home you can qualify for a rebate on the GST or HST.
All of these things can add up and help reduce the burden of your home purchase expenses.


6. Pay Off Your Debt
Debt can interfere with your ability to qualify for a mortgage. Tighten your budget and try to pay down your debt before applying for a mortgage. Also be sure you’re paying your bills on time and in full to improve your credit score. All your credit habits impact not only your ability to qualify for a mortgage, but also your interest rates. The better your credit score, the lower your interest rates (based on current lowest rates) and the higher the amount of money the bank will be willing to lend you. This in hand with your income is key to getting a good mortgage. And just between you and us, if you’re deep in debt, or are having trouble paying your bills now, buying a home is not a good idea.


7. Consider Cohabitation
This isn’t for everyone, but it’s becoming quite popular. Cohabitation is buying a home with a friend or family member. You’ll want to be cautious in who you choose, but it greatly reduces the burden of the mortgage and can open up more possibilities. You can’t go into this lightly, but need to keep your eyes wide open. A lawyer is a must as they can draw up an ownership contract and also help you get a mortgage.


While housing prices in Toronto can be discouraging, if your heart is set on home ownership, there are ways to make it happen. We know that not everyone will end up qualifying for a mortgage, but if you pay attention to these tips, you might be more likely to afford a home in Toronto right now.


If you want to talk about your dreams of home ownership, we’re some of the best real estate agents Toronto offers. We’re ready to discuss your options and help you pay the best possible price for your home. Give us a call at 416.291.7372 or email us at hello@christinecowern.com. We’d love to work with you!