Wedding Bells

new beginnings – buying your first home

If you’re like most people, you’ve probably been dreaming about owning your own home for a long time.

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If you’re like most people, you’ve probably been dreaming about owning your own home for a long time. After all, it’s not just a roof over your head, it’s a canvas for expressing who you are, a statement of independence, your stake in the grown-up world – perhaps even a foundation for raising a family.

As you embark on this exciting journey, you’ll quickly discover how emotionally driven the whole process is. And while it’s easy to get swept off your feet by breathtaking views or a majestic oak tree on the front lawn, smart decision making and a solid game plan will go a long way toward helping you secure the home of your dreams.

Here you’ll find information tips to help you navigate the world of first time home buying. You’ll also find places to get additional information. But first, let’s start with the basics.

Pre-approved mortgage – your competitive advantage

Before you even start scouring the real estate listings or jumping from open house to open house, it’s wise to secure a pre-approved mortgage. That way, you’ll know exactly how much you’re prepared to spend and what your mortgage payments will be up front. More importantly, it puts you in a position to act immediately, putting you miles ahead of other potential buyers who may have missed this critical step.

Start your pre-approval process now.

When it comes to home buying, you want a winning team on your side

Enlisting dedicated, experienced professionals can help ensure your first-time home buying experience is as enjoyable, rewarding and hassle-free as possible.

Start with a specialist – an RBC Mobile Mortgage specialist

Getting in touch with an RBC Mobile Mortgage specialist is a great way to get the ball rolling. They understand that you’re busy building your lives together, so they’ll come to you – wherever and whenever is convenient for you.

Here’s just some of what you can expect:

• Free, no-obligation and no-pressure advice about your various mortgage options
• Personalized one-on-one service
• Help securing your pre-approved mortgage
• A single point of contact for any mortgage related questions you may have
• Competitive rates, along with options that may save you thousands of dollars in interest over the life of your mortgage.

Find a Mobile Mortgage Specialist now

The right agent can help you get the right home

Having an experienced real estate agent on your side is absolutely essential – not just for finding and securing the home you want – but also to deal with all the tricky details and negotiations. The right agent should put your mind at ease, so you’re free to imagine your future together in the home you truly want.

While there’s no magic formula for finding the right agent, referrals from friends and family are a good place to start. At the end of the day, if the relationship feels right, you’re probably on the right track. Of course, an RBC Mobile Mortgage specialist will be happy to refer you to highly qualified agents with whom they have a working relationship.

Tip: Agent’s fees

Remember, you don’t pay the agent’s fee, the seller pays.

Engage a Lawyer or Notary

Quite simply, buying a home is a big deal. Not only is it a large financial expense, but there are also many legal considerations and paperwork that need to be handled accurately and efficiently. No one expects you to understand land surveys, right of ways, potential liens on the property and so on – that’s the lawyer’s job.

Most realtors can refer you to an experienced lawyer or, in the province of Quebec, a notary. As with a pre-approved mortgage and having an agent, securing legal services sooner rather than later will help make your home-buying experience a whole lot easier.

Save for your down payment

While a mortgage typically covers the bulk of the purchase price for your home, you still need to come up with a down payment. How much you put down depends on a number of factors, not the least of which is how sizeable a mortgage you’re prepared to take on. An RBC Mobile Mortgage Specialist can help you determine a down payment amount, based on your specific circumstances.

Here’s how you can use some of these proven strategies to start saving:

• Establish a separate savings account, and contribute any extra money that you receive — work bonuses, income tax refunds, gifts.
• Contribute the maximum to a Tax-Free Savings Account (TFSA). You can each contribute up to $5,000 each year, and returns accumulate tax-free.
• Consider including investments, such as Guaranteed Investment Certificates or mutual funds, based on your time frame, to help your savings grow.
• Set up an automatic savings plan. Even if you each contribute just $25 a week to the plan, that’s $2,400 (plus any interest) in accumulated savings each year.
• Use your RRSPs. If neither you nor your partner have owned a principal residence in the past five years, you can borrow up to $25,000 each from your Registered Retirement Savings Plans (RRSP) under the Federal Government’s Home Buyers’ Plan (HBP). Withdrawals are tax-free, provided you make prescribed repayments over 15 years.

Tip: Mortgage Advice Centre

The RBC Mortgage Advice Centre features a number of helpful videos with advice for both first-time and experienced home buyers. Topics include Why get pre-approved, Using your RRSPs, Mortgage Options and more.

First-Time Home Buyers’ Tax Credit (HBTC)

In 2009, the federal government introduced a new tax credit for first-time home buyers. The Home Buyers Tax Credit is calculated by multiplying the lowest personal income tax rate for the year by $5,000. For 2009, this amount is $5,000 x 15% or $750.

You, and anyone you purchase the home with, must be a first-time home buyer to be eligible for this credit. The home must be used as your principle residence, and if you purchase with your spouse, common-law partner, or even a friend, then either one of you can claim the credit (or share it), but the combined total cannot exceed $750.

Learn more:

Watch the Video

More help finding a home – without leaving home

You can make finding the right home even easier by visiting findingyourhome.ca, where you’ll find valuable information on topics including:

• Knowing how much you can afford
• The true cost of home ownership
• Choosing the right neighbourhood and the right home
• Buying a newly constructed home versus an older one
• Financing for first time buyers and much more

Don’t wait to renovate

While it may be premature to be thinking about renovations before you’ve even found your dream home, any improvements you make to your home are generally considered both a wise move – and a sound investment.

Whether for your own personal enjoyment or to potentially improve resale value down the road, many types of renovations are now easier to tackle financially, with a new 15-per-cent credit offered under the Federal Government’s 2009 Home Renovation Tax Credit. This credit may be claimed on the portion of eligible expenditures between $1,000 and $10,000, for a maximum credit of $1,350.

Examples of eligible projects for the tax credit

• Redoing a kitchen, bathroom, or basement
• New carpet or hardwood floors
• Building an addition, deck, fence or retaining wall
• A new furnace or water heater
• Painting the interior or exterior of a house
• Resurfacing a driveway
• Laying new sod

Other costs eligible for the credit

• Building permits
• Professional services
• Equipment rentals
• Incidental expenses

Learn more:

Watch the video

Get a pamphlet

Talk to an RBC Advisor or Mortgage Specialist

RBC Royal Bank offers a wide range of products and services that can help make your dream home a reality. Whether you’re looking for ways to save for your down payment or shopping for the perfect mortgage, you can count on personalized, no-obligation advice from a knowledgeable RBC Advisor or Mortgage Specialist. Stop by your local RBC branch or call us today to discuss your plans.