Checklist - My concerns when buying a house

Legal considerations
Personal finances
Protecting and maintaining your standard of living
Other related sections
Useful links

Legal considerations
 

• As an unmarried couple, it is important to consult a lawyer or notary to amend our cohabitation agreement to include our new acquisition. This document sets out our respective obligations and rights: a list of each person's property; the terms under which the assets acquired together and subsequently are held; responsibility with respect to debt, division in case of separation; etc.
   
• We have to consult a lawyer or notary to review or prepare our wills. A will is particularly important for common law partners who want to leave everything they own to one another.
   

Personal finances
 

• Purchasing a property involves significant investment. We review our personal balance sheet to determine if we have the assets to make the required down payment. We can also use our RRSPs to make the down payment under the Home Buyer's Plan (HBP).
   
• The down payment is not the only immediate expense related to buying a house. Since we don't want any surprises, we want to calculate the initial costs of buying a house right now.  Some of the costs to consider are:
  
   
  • Land transfer tax. This tax is a percentage of the cost of the property that must be paid to the municipality;
     
  • Adjustment of municipal, school and other taxes, if applicable;
     
  • Fees of a notary or lawyer to finalize the mortgage and other related fees;
     
  • Inspection fees: if we are buying a resale house, we want to know if there are major repairs to be made in the short- or long-term and make sure there are no hidden defects;
     
  • Appraisal fees required by the lender;
     
  • Survey fees for the property, if applicable;
     
  • Sales tax if we decide to buy a new house.
    
     
• We are also budgeting for the move, interior and exterior renovations and equipment, such as:
  
   
  • Moving costs, such as connecting the utilities (electricity, cable, etc.), the costs of a mover or truck rental; 
  • Decorating, paint, window coverings, lighting, etc; 
  • Garden and yard accessories and tools.
    
     
• In order to prepare accordingly, we assess our budget, because our monthly payments will include more than our mortgage payments.  We have to make sure that we can pay all the recurring expenses related to our new home, such as:
  
   
  • Mortgage payments;
  • Mortgage insurance premiums;
  • Heating costs, which may be higher than what we're paying now in our apartment;
  • School, municipal and other taxes, if applicable;
  • Home insurance premiums.
    
     
• Our current budget may be enough to cover the monthly household bills, but we want to set up a savings fund so that we won't be caught short if we needed to renovate or do major repairs to the house. So, we've included this in our budget.
   
• Even if we buy our own house, we can continue contributing to our RRSPs because we can use the tax savings generated by our contributions to either pay down our mortgage or set up our emergency fund.

 Protecting and maintaining your standard of living
 

• We consult an advisor to determine if, in the event one of us becomes disabled or seriously ill, our income would be enough to meet our family's needs, maintain our standard of living, make our payments, as well as pay for our taxes and house-related work. We review our insurance portfolios and make sure that we have protection that can be easily adapted to our needs and will evolve according to our situation.
   
• We also review our life insurance coverage, because in the event of death, we want the surviving spouse to inherit our property mortgage free. Since we are both planning to take advantage of the HBP to purchase our house, any outstanding amounts will have to be paid by the surviving spouse or will be taxed. The proceeds from our life insurance policies will cover our loans, repayments and taxes.
   

Other related sections
 

• We consult I Need Advice Tailored to My Situation to see an example of a situation similar to ours and get practical advice.
   
• We use simulators to find out what life insurance and health insurance  protection we need.
  
  
• Two Tools to Make Moving Easier
    
   

Useful links
 

• We visit Desjardins General Insurance's Web site for our home insurance needs.
  
  
• Desjardins Affordability Index: an index that measures the ability of households to purchase a home.
  
  
• We visit the Buy a house section of the Desjardins Web site.
  
  
• Personal Property Inventory
  
  
• Canada Mortgage and Housing Corporation.