Are you ready to buy a house? Congratulations!
Owning a home is a big step. This is because a house is one of the most expensive things we can buy.
It’s a good thing that Manitoba has more affordable housing than many big Canadian cities. The average price of a house in Manitoba is $388,022 (2023). This is much lower than the prices in BC and Ontario. In BC, the average price is $960,067. In Ontario, it is $881,946 (Canadian Real Estate Association).
Before you buy a house, think about these five things:
- Down payment and period of stay
Did you know that as a newcomer, your down payment options are affected by the amount of time that you have stayed in Canada? Those who have lived in Canada for up to three months may be required to put up as high as 35% for down payment. To have lower down payment options, you must have stayed from 6 months to more than a year. - Other costs
Aside from the down payment and the mortgage, you will have to pay for closing costs. These are one time payments covering lawyer’s fees and the land transfer tax. In Manitoba, the land transfer tax is computed up to 2% of the house’s purchase price.Don’t forget monthly housing costs. You’ll need to pay utilities, property tax, home insurance, and of course, the mortgage. Housing costs should not be more than 30% of your total household income per month according to experts. Also factor in other monthly expenses, such as credit card bills and other personal loans, when you’re thinking of your budget.
Lastly, you will need to budget for maintenance. Minor repairs around the house, like repairing the roof or a malfunctioning furnace for example, are necessary. Experts suggest budgeting 1-2% of your income each year as emergency savings.
- What’s your lifestyle?
Do you like cutting grass, or gardening? Are you handy around the house? Being a homeowner means you have to take charge of maintenance and repairs your landlord used to do for you. There are also standards you will need to maintain for a residential property. Owning a house can also mean lifestyle sacrifices for you and your family. With more of your funds going to mortgage costs and monthly utilities, you may have to cut down on expenses for eating out, vacationing, or shopping. - Mortgage pre-qualification and pre-approval
Before looking for a house, apply for pre-qualification and then for a pre-approved mortgage. Being pre-qualified for a mortgage gives you a good idea of how much you can get to finance a house. This is done by a lender such as a bank or credit union. When you are pre-approved for a mortgage, you have the lender’s actual commitment for a loan. Meanwhile, having a pre-approved mortgage is an advantage. You will be taken more seriously by sellers and real estate agents. Getting it is a good indication that your finances are in order. It can even allow you to negotiate better rates. - House inspection
To ensure that the house you are buying is structurally sound and up to standards, ask for a house inspection. Hire a professional inspector (or ask the help of New Journey Housing for volunteer home inspections). This can save you from costly renovations and repairs in the future. It also gives you the peace of mind that you are getting the right value for what you paid for.
The First-Time Homebuyer’s Incentive
Learn about this new program launched by the government. Its goal is to make it easier for individuals and families to purchase a home by reducing monthly mortgage payment without increasing their down payment.
To view the rest of the videos in the series and to learn more about this program, go to: First-time Home Buyer Incentive.
Article updated May 31, 2023.