Prepare Your Budget

Financing and Startup Costs

When you start looking for a property, it is to your advantage to know your borrowing capacity. This way, you will know what type of property to look for during your searches. A good way to do this is to obtain a pre-approved mortgage before you even find your property. With a pre-approved mortgage, you will know the amount you can borrow, the interest rate and the amount of each payment. This way, you will look for a property within your means.

The Home Buyers' Plan (HBP) is a government program that allows any buyer to use their savings invested in an RRSP to finance the purchase of a property without having to pay tax on the withdrawal. The withdrawn funds must be returned to the RRSP according to the deadline set by the program.

Neither the buyer nor the spouse must have owned a home that served as their principal residence during the five years preceding the withdrawal request. In addition, the buyer must have concluded a written agreement for the purchase or construction of a property before being able to withdraw the funds from the RRSP.

Here are some common startup costs:

• Property inspection and appraisal
• File review by mortgage insurer, if applicable, as well as taxes on the premium
• Notary fees
• Account adjustment fees indicated by the notary (electricity, heating, municipal and school taxes, equipment lease contract, etc.)
• Transfer duty (welcome tax)
• Moving costs
• Connection fees (telephone, electricity, etc.)
• Furnishing (paint, curtains, etc.)