Frequently Asked Questions
Sufficient funds for a down payment: You will need to have saved enough money to cover the down payment, which is typically between 5% and 20% of the purchase price.
Good credit score: A good credit score is important as it can affect your ability to get a mortgage and the interest rate you are offered.
Employment and income verification: Lenders will want to see proof of income and employment to determine if you can afford the mortgage payments.
A pre-approval for a mortgage: A pre-approval is a letter from a lender that states the maximum amount of money they are willing to lend you for a mortgage, based on your financial situation and credit score.
A real estate agent: A real estate agent can help you find suitable condos in your desired location, negotiate the price and other terms of the purchase, and guide you through the legal process.
A lawyer: A lawyer can help you with the legal paperwork involved in buying a condo, such as reviewing the purchase agreement and closing documents.
Property insurance: You will need to purchase property insurance to protect your investment in case of damage or loss.
It’s worth noting that the requirements for buying a condo may vary depending on the lender and the province or territory where the condo is located. It’s a good idea to research the specific requirements and regulations in your area to ensure a smooth purchasing process.
For the Ontario Land Transfer Tax Refund (LTT Refund) (The Strictest Definition):
You must never have owned a home, or an interest in one, anywhere in the world, at any time.
Your spouse (while you have been spouses) must also not have owned a home, or an interest in one, anywhere in the world, at any time.
You must be a Canadian citizen or permanent resident.
You must be at least 18 years old.
You must occupy the home as your principal residence within 9 months of the purchase date.
For Federal Programs (e.g., Home Buyers’ Plan, FHSA, CMHC Rules): The definition is generally less strict. You qualify if you meet any of the following:
You have never owned a home.
You have not occupied a home that you or your current spouse/common-law partner owned in the last four years.
You recently went through a breakdown of a marriage or common-law partnership.”
The best way to get a mortgage in Canada depends on your individual financial situation and goals. Here are some general tips that can help you get a mortgage:
Improve your credit score: Your credit score is one of the most important factors lenders consider when deciding whether to approve your mortgage application and what interest rate to offer you. You can improve your credit score by paying your bills on time, keeping your credit card balances low, and avoiding applying for new credit.
Save for a down payment: The larger your down payment, the less you’ll need to borrow, which can help you get a better interest rate and lower monthly payments. Try to save at least 20% of the home’s purchase price for your down payment, as this will allow you to avoid paying for mortgage default insurance.
Get pre-approved for a mortgage: Before you start house hunting, get pre-approved for a mortgage from a lender. This will give you a better idea of how much you can afford to spend on a home and will show sellers that you’re a serious buyer.
Compare mortgage rates and terms: Shop around for a mortgage from different lenders to find the best interest rate and terms that fit your needs. Consider working with a mortgage broker who can help you compare rates and negotiate with lenders on your behalf.
Choose the right mortgage type: There are different types of mortgages available in Canada, such as fixed-rate, variable-rate, and hybrid mortgages. Consider your financial goals and risk tolerance when choosing the type of mortgage that’s right for you.
Be prepared for closing costs: In addition to the down payment and mortgage payments, there are other costs associated with buying a home, such as legal fees, appraisal fees, and land transfer taxes. Be prepared to pay these costs when you close on your mortgage.
Remember that getting a mortgage is a big financial decision, so it’s important to do your research and work with professionals who can guide you through the process.
Before buying a condo, it’s important to ask a number of questions to ensure that the property is a good fit for your needs and budget. Here are some questions to consider asking:
- What are the condo fees and what do they cover?
- What amenities are included in the condo complex, and what are the rules around using them?
- What is the condo corporation’s financial status, and have there been any special assessments or fee increases in the past?
- Are there any upcoming repairs or maintenance projects planned for the building, and how will they be funded?
- What is the parking situation, and is a parking spot included in the purchase price?
- What are the rules around renting out the condo, and are there any restrictions on short-term rentals (such as through Airbnb)?
- What is the noise level like in the unit and the building, and are there any issues with neighboring units or nearby construction?
- What is the building’s security like, and what measures are in place to protect residents and their property?
- What is the pet policy, and are there any restrictions on owning pets or certain breeds?
- What is the resale value of the condo and the building, and are there any factors that could negatively impact the property value in the future?
- What is the condo corporation’s financial status, and have there been any special assessments or fee increases in the past?
It’s also a good idea to have a professional home inspection done before finalizing the purchase of a condo, as this can uncover any potential issues or maintenance needs that may not be immediately obvious.
Condo fees, also known as maintenance fees or strata fees, are monthly payments that condo owners make to the condo corporation to cover the cost of maintaining and operating the building and its amenities. These fees typically vary based on the size and location of the unit, as well as the amenities offered by the building.
The fees cover a range of expenses, including:
Building maintenance: This includes cleaning common areas, repairing and replacing equipment, and maintaining the exterior of the building.
Utilities: Some condo fees include the cost of utilities, such as heating, cooling, and water.
Insurance: The condo corporation is responsible for insuring the building, and the cost of insurance is typically included in the condo fees.
Amenities: If the building has amenities such as a gym, pool, or concierge service, the cost of maintaining and operating these amenities is often included in the condo fees.
Reserve fund: A portion of the condo fees may go towards building a reserve fund, which is used to cover unexpected expenses or major repairs.
It’s important to review the breakdown of condo fees for a particular unit before purchasing a condo, as the fees can vary widely depending on the building and its amenities. Make sure to understand what is included in the fees, and factor this cost into your budget when considering whether to buy a particular condo.
The management structure of a condo corporation varies depending on the size and complexity of the building. However, there are some common roles and responsibilities that exist across most condo corporations.
In general, the board of directors is responsible for making decisions about the building and ensuring that the condo corporation is run effectively. The board is typically elected by the owners at the annual general meeting and consists of volunteers who serve a set term.
The board of directors is responsible for:
Enforcing the bylaws and rules of the condo corporation.
Overseeing the budget and finances of the condo corporation, including setting the condo fees.
Hiring and supervising the property manager, who is responsible for day-to-day operations of the building.
Making decisions about repairs and maintenance to the building and its amenities.
Resolving disputes between owners or between owners and the condo corporation.
The property manager is responsible for implementing the decisions of the board of directors and managing the day-to-day operations of the building. This includes tasks such as overseeing maintenance and repairs, hiring contractors and staff, and enforcing the bylaws and rules of the condo corporation.
It’s important to understand the management structure of the condo corporation before purchasing a condo, as this can impact the decision-making process and overall management of the building.
The building’s insurance coverage is an important consideration for condo buyers. Typically, the condo corporation is responsible for insuring the building and its common areas (known as the Master Policy), while individual unit owners are responsible for insuring their own units, personal property, and liability (known as the Unit Owner’s Policy).
The condo corporation’s insurance policy covers damage to the building structure and common areas caused by fire, flood, or other disasters. It also provides liability coverage in case someone is injured in a common area. However, it’s important to review the specific insurance policy to understand the scope of its coverage.
If there is damage to a unit or the building, the condo corporation’s insurance policy may cover the cost of repairs to the building’s structure. However, there are two crucial points for unit owners:
Deductible Responsibility: The Master Policy has a high deductible, and the unit owner is often legally held responsible for paying the entire Master Policy deductible if a claim (such as water damage) originates from their unit, regardless of whether they were at fault. Condo deductibles in Canada can be extremely high (often $25,000 to $250,000 or more). Unit owners must ensure their personal insurance policy includes sufficient Loss Assessment/Deductible Coverage to cover this risk.
Unit Coverage Gaps: The Master Policy generally does not cover a unit owner’s personal property or any upgrades and improvements made to the unit beyond the standard finishes originally provided by the builder.
In the event of damage to a unit, the unit owner should contact their own insurance company immediately to file a claim for personal property, unit upgrades, and liability. The condo corporation should also be notified, as they will need to file a claim under their Master Policy for any damage to the building structure.
It’s important for condo buyers to obtain and review the building’s Certificate of Insurance (available in the Status Certificate) to understand the deductible amount and coverage limits, and then purchase a robust personal condo insurance policy to fill those gaps and protect against large deductible assessments.