Experts say planning and support key to help first-time buyers navigate tough housing market

With low inventory and high prices, experts say getting finances in order is key to breaking into Montreal’s housing market.

As home prices continue to surge, it’s more difficult than ever for young people to enter the housing market.

Michael Hopkins, a real estate agent with Royal LePage, says first-time buyers should consult with as many experts as possible.

“There’s nothing wrong with talking with a person at a bank but they should be talking to mortgage brokers, because they know a lot about what’s going on,” he said.

“They should also be talking to real estate brokers well before they actually want to buy,” Hopkins added, emphasizing that first-time buyers should also seek advice from homeowners within their network.

Homeowner education is also key, according to Hopkins. Everything from credit scores to down payments should be understood before moving on to the next step.

“What are the ownership costs? And that’s actually an Excel spreadsheet that’s fairly involved, not a napkin,” Hopkins said.

“As they are filling out that sheet, they should do so with somebody who can support them. Incidentally, for a lot of first-time homebuyers, their mom, their dad can also be very helpful.”

In terms of saving for a downpayment, Hopkins said that people in places like Montreal should consider prices between $ 400,000 to $500,000, which requires a minimum downpayment of 5 per cent.

The minimum downpayment on a $500,000 home is at least $25,000 — that’s without considering carrying costs and other expenses.

“That’s a lot of money,” said Hopkins.

“You need at least somewhere in the order of about $60,000 to $70,000 in cash to be able to kind of start any of this. So, start with that as a kind of baseline.”

There are programs and incentives that can facilitate that process for first-time homebuyers, including a new website by real estate company RE/MAX Quebec that breaks down every stage of the homebuying experience.

Nathalie Bégin with RE/MAX Québec said the online portal offers a variety of resources for first-time homebuyers — such as articles, videos, and expert advice — to guide them through each step of the often daunting homebuying process.

“We realized that homeownership is a big headache for many young people right now. So, from the financial planning to signing at the notary’s office, we’re going to see all the steps over there,” said Bégin, adding that the goal is to demystify the process.

In terms of programs and incentives, Hopkins said there are numerous options at the federal, provincial and municipal levels that help first-time buyers access homeownership.

“[These programs] provide rebates, they provide cash back. It’s always good to work with mortgage specialists, because those folks know all of those programs. Some people qualify for part of it. Some people qualify for all of it,” he explained.

Once financing is secured, Hopkins cautioned against overspending, while Bégin emphasized the importance of due diligence — even when buyers fall in love with a home.

“There’s a lot of things to look at. You cannot decide to not do an inspection on a house. You have to have somebody with you who’s going to give you information and say it’s a risk to that,” Bégin added.

Here is a list of links and information for first-time homebuyers:

Federal:

• Buying a home
• The Home buyers’ amount
• GST/HST new housing rebates
• The Home Buyers’ Plan (HBP)
• First Home Savings Account (FHSA)

Provincial:

• Home Buyers’ Tax Credit

Municipal:

• Home Purchase Assistance Program

With files from Denise Roberts