Blog Best Tips When Buying A New House And Insurance Considerations

Dec 12, 2023

Home sweet Ontario: your journey on how to buy a home

couple buying a home

Buying a house is one of the most significant financial decisions you will make in your lifetime. There are many things to think about when you're going through the purchase process. Even though it's exciting, buying can be stressful.

If the real estate market is booming, conducting a thorough due diligence process can be difficult to ensure you make the right purchase. To help ensure success with your next home purchase, here are some tips to consider and insights into how your costs are determined.

This blog post will guide you through the essential steps and considerations to ensure a successful home-buying experience and setting up Ontario home insurance along the way.

What’s on this page?

What kind of insurance do you need when buying a new house?
11 steps to buying a home
What to consider when buying a house in Ontario
How to make your new home purchase a success
Buying A house in Ontario FAQs

What kind of insurance do you need when buying a new home?

Although you're not legally required to have coverage in place, most mortgage lenders want proof of coverage to protect their investments. Even if you own your home (no loan from a bank on it), it may be your most significant source of future wealth – so you want to protect it.

Some lenders will require proof of insurance before you can buy a home. You will likely need an insurance binder to help you with the process of closing a deal. Title insurance can also protect you while becoming a legal property owner.

Lastly, consider additional coverage for your property, such as overland flooding or home-based business insurance, if you have a company operating from your property. If you rent and then buy, you’ll need to cancel your tenant insurance.

It is important to evaluate your insurance requirements carefully, the location of your property, and any lender prerequisites before choosing your insurance coverage. Seeking guidance from insurance experts can assist you in customizing your coverage to your specific situation and ensuring that your new home is adequately protected.

Found your dream home? Find the best policy to protect it

Congrats on buying a home - now it's time to find adequate coverage to protect it from the roof to the foundation. Our brokers will make the process of comparing quotes seamless. Get started today by answering a few quick questions.

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11 steps to buying a home

To simplify the often-complicated process of buying a house in Ontario, we have outlined the steps to support you.

  1. Set your budget and savings: Consider your family’s household income and savings to decide how much you can afford on the home you are buying. You’ll also want to check out first-time home buyer incentives to help financially. Calculate the down payment, closing costs, monthly mortgage payments, and bills.
  2. Select the right real estate agent for your needs: Choose your realtor, lawyer, notary, or advisor wisely. Meet with multiple agents, ask essential questions, and check their references.
  3. Understand your budget: Consider the expenses involved in buying a home and calculate your budget. Consider your lifestyle, earnings, debts, job stability, and expected changes. Plan accordingly to avoid financial consequences.
  4. Explore mortgage options and obtain pre-approval: Secure a mortgage pre-approval to know your borrowing capacity. Your lender will determine how much they are willing to lend based on your credit rating, income, and debts. This guarantees the current interest rate for a specified period, allowing you to house hunt confidently.
  5. Commence the home search: Remote work has expanded options for real estate. Decide the type of home that suits your lifestyle by browsing real estate options online, such as a condo, townhome, or freehold.
  6. Schedule property viewings: Your agent can help you with property viewings, whether in-person or virtual. Remember your budget and must-haves while exploring listings for a focused search.
  7. Make a purchase offer: Work with an experienced realtor to craft a competitive offer for your preferred home. Adapt your approach based on market conditions.
  8. Conduct a home inspection: Include a home inspection clause in your offer to identify issues and negotiate a lower price. An inspector will assess heating, plumbing, electrical systems, roofing, and foundation.
  9. Finalize the transaction: During the 90-day closing period, the buyer fulfills the offer conditions. Your realtor and lawyer process mortgage documents with your lender leading up to closing day.
  10. Update utilities and change your address: Inform utility and subscription providers of your address change and update relevant agencies, healthcare providers, and transportation authorities.
  11. Settle into your new home: To move smoothly, plan ahead. Prioritize essential items, pack plates vertically, document electronics' connections, use clothing to protect fragile objects, and safeguard glassware with clean socks.

What to consider when buying a house in Ontario

1) Talk to your insurer before you buy

Your insurer looks at your house purchase from the risk perspective: how likely your house could be damaged and how much damage might be incurred. They may have information that may not be available to you and can help you assess potential problems. You can also bundle your auto and home insurance for a better deal.

2) Purchase insurance for replacement costs on the house

Don't assume your limits will automatically adjust to rising or falling market prices. The fact is, replacement value, or the cost of labour and materials required to rebuild is what you need to consider.

3) Provide critical information to determine the house value

Your representative will need to know some information, including:

  • Age: How old is the house? Is it a brand new build or an older home?
  • Size or area : What is the square footage of the house?
  • Roofing: What type of roofing does it have, and how old is it?
  • Heating: How is the house heated, and how old is the system?
  • Stoves And fireplaces: How many fireplaces does the house have? Are they wood burning or gas?
  • Unique house features: Does the house have unique features such as a pool, hot tub, custom built appliances or other features?
  • Distance To fire hydrant: How far is the closest fire hydrant? What is the distance to the nearest responding municipal or volunteer fire department?
  • Additional structures: Are there any other structures on the property, such as garages, sheds, or barns?

4) Review your policy

You need to review the document carefully once your insurer sends the details. Ensure you know what it will cover or exclude from your home or condo insurance. If you have questions, make sure that you speak with your advisor. Don't leave any questions unanswered.

5) Buy title insurance

This protects your ownership of a property. Title insurance is bought when you purchase, and it will protect you from any flaws or mistakes on your ownership paperwork.

6) Calculate the cost of utilities

Remember to calculate the costs of your utilities along with your mortgage and coverage plan. Here are some areas to consider:

  • What is the size of the space you will be heating and cooling?
  • How old is the home, windows, doors, and roof? Are they in good condition or have been updated recently?
  • Are the applicants energy efficient?

7) Location, location, location

You'll want to consider the area you are moving to. Are there amenities nearby that suit your lifestyle? What is the commute to work like? Do you have access to schools, parks, or hiking areas? These will all be attributed to property tax - another cost to consider.

8) Pre-purchase checklist

Before you sign, consider these questions:

  1. List the pros and cons of a new build compared to an older home. The quality of the home is an important factor for the house's longevity, and it will impact your policy.
  2. What risks can you assume if you do not include a home inspection as a condition of your offer?
  3. Is your budget flexible enough to cover any costs that could increase, such as property taxes, utilities, or mortgage?
  4. Does the builder have any claims or lawsuits?
  5. Did you check for any home insurance claims against the property?

As you navigate the steps of buying your dream home, keep these steps in mind and always ask your insurer or real estate agent questions.

How to make your new home purchase a success

There are other ways to ensure your purchase is a good investment. Some factors influence your coverage, while others are sound advice to ensure you make a wise investment. It's your investment, after all, and one crucial way that you can build financial stability.

  • Invest in a home inspection:An inspection can uncover many potential problems you cannot see. An inspector will assess for damage, potential repairs, and possible problems (leakages). You can uncover some glaring problems you might be faced with that you didn’t recognize before by having the inspection.
  • Share your inspection details: Your inspection results will help assess possible risks. An advisor may have information that will give you a clearer picture of the “state of repair” and whether its issues are related to its location.
  • Confirm location with your local municipality: This is important because it may be located in a flood plain. You can still get water damage insurance, but you must add it to ensure you are protected.
  • Check for alarm and security systems: If these are already installed, you are one step closer to better protection. Smoke detectors and security systems may also make you eligible for discounts.
  • Are you going to renovate?: If you are planning on doing home renovations, don’t forget to mention the renovations to your insurer to make sure that you are adequately covered during and after the process.
  • Assess special or unique features: Does it come with proper protection for these unique features? For example, do you have the required fencing if you have a pool? If not, you’ll need to put one up.

Buying A New Home FAQs

This type of protection covers the property owner and projects under construction. Builders will assume builders risk insurance, but it is highly recommended you have a paper copy available if something happens.

Unlike automobile protection, it is not legally required in Canada if your house is fully paid for. However, you will need to purchase it to get a mortgage and protect yourself if you need to make a claim.

Whether you are buying or selling your home, there are significant legal considerations. When purchasing a home, follow these legal steps: engage a real estate attorney, review the Purchase Agreement, conduct a title search, secure title insurance, schedule a home inspection, negotiate repairs or credits, finalize mortgage approval, sign closing documents, and transfer funds. Seek professional guidance to ensure legal compliance with local laws.

Make your home buying journey a success

Buying a home in Ontario requires careful planning and professional guidance. Ontario offers diverse communities and landscapes with many housing options for different lifestyles and preferences. Every step counts, from creating a budget to becoming a proud homeowner. You have much to consider with owning a property and home insurance in Ontario. Use this list to ensure that you protect yourself from problems down the road.

Buying a home in Ontario requires careful planning and professional guidance. Ontario offers diverse communities and landscapes with many housing options for different lifestyles and preferences. Every step counts, from creating a budget to becoming a proud homeowner. When owning a property and buying home insurance in Ontario, you have much to consider. Use this list to ensure that you protect yourself from problems down the road.