For most people, their home is the largest single purchase or investment they will make. Home insurance can help protect your home or contents in case of theft, loss or damage.
Insurance is also important for protecting tenants. You should have enough insurance to cover the cost of replacing everything in your home if it were all destroyed or stolen, and to cover your liability to others.
The amount of money you receive from your insurer for a covered loss will depend on whether your coverage is for actual cash value or replacement value. When shopping around for home, condominium or tenant insurance, ask if the quotes you receive are based on actual cash value or replacement value.
When you rent an apartment, most landlords require a one-year commitment. Donít rush into signing a lease. Be sure to choose an apartment that meets your needs and fits your budget. Here are some things to consider before renting:
Space: How much space will you need? If youíre planning to bring your own furniture, keep that in mind when thinking about how much space you need in your new place.
Functionality:What do you want to be able to do in your apartment? Do you love to cook and want a roomy kitchen or would you rather have a larger living room for entertaining? Do you have a car and need on-site parking?
Location: Ideally, you will want to choose an apartment that is close to work, school, grocery stores and any other place you will need to visit regularly. This will help you save on transportation costs.
Age of the Building:If youíre paying for your own heating costs, the age of the building you live in can have a huge impact on your monthly power bill. Older buildings often arenít well insulated and leak heat, especially if the windows have not recently been upgraded.
Landlord / Superintendent: Having a landlord or superintendent you can rely on can save you a lot of headaches and frustration. Talk to tenants in the building and ask if the landlord keeps up with regular maintenance and repairs and is available in case of an emergency.
Roommates: Are you going to live with a roommate or by yourself? If you do chose to share your new space, make sure you can trust your roommate and are able to have an honest discussion about how things like damage deposits, paying bills, and making joint purchases will be handled.
Cost: Make sure you know exactly how much your apartment will cost each month. Remember, the cost of rent is just the beginning. You also need to know how much you will pay for heat, power, cable, internet, insurance, parking, and laundry. Some apartments may include all of these services in the monthly rent, but be sure to ask what is included and that you can afford it before committing to an apartment. Use our budget template to keep track of your finances.
When you buy a home you will have to decide if you want to buy on your own or work with a professional, like a Real Estate Agent. A Real Estate Agent and their Salespeople can help you navigate the process of buying a home.
Few people have the cash on hand to purchase a home outright. At some point in the home buying process, you will likely need to secure financing. You can work with your bank or a Mortgage Broker to help you determine how much you can afford to borrow, set a budget, and secure a Mortgage.
Youíve found it Ė the place to call home! Now itís time to make an offer. An offer is a legally binding contract. Signing it means you commit to buy the home. If the seller accepts your offer, once the conditions included in the purchase and sale agreement are met, you are obligated to buy the home. Itís a big decision, so be sure to think it through. There is no cooling off period when buying real estate, and you will forfeit any deposit if you change your mind. Decide how much money you want to offer and what conditions you want met before closing the sale. Here are some common conditions to consider:
Home Inspection: Have your offer dependent on a home inspection. To avoid costly repairs, you may have a professional inspect the home before buying and ask the seller to have the repair work completed before the closing date.
Financing: Have your offer conditional on receiving financing at a set rate. A pre-approval for a mortgage is not a guarantee. If your financial situation changes or the lender has made a mistake you may not be able to secure a mortgage to purchase the home or may not qualify for the same interest rate.
Fixtures and Appliances:Have your offer conditional on fixtures or appliances (such as tool sheds, light fixtures, etc.) being included in the purchase price.
Sale of Existing Home:Have your offer conditional on selling your home first to avoid having to pay two mortgages.
Closing Date:Have the date you want to move into your new home written into the offer.
The seller may accept, decline, or counter your offer by asking for more money or adjusting the conditions of the offer. Once your offer is accepted, if a deposit was required, it will need to be paid. At this point, you might choose to hire a lawyer who will handle the closing of the sale.
Download the "Home Buying Step by Step" guide and workbook from the Canada Mortgage and Housing Corporation (CMHC) for complete information and customized calculators.
Select a Builder: Research potential builders to ensure that the one you choose has the skills and experience to meet your needs. Consider checking references, checking if the builder is a member of the Canadian Home Builders Association, and seeing samples of their work.
Review New Home Options:Work with the builder to outline the style, size, features and price for your new home. This may include looking at model homes, blueprints and detailed descriptions.
Understand the Construction Process:Ensure that you have a clear understanding of the steps involved in the construction process from beginning to end, timelines for each phase of the project, the various milestones, and what sort of inspection process will take place prior to taking possession of the new home.
Warranties: Ensure that you have all details in writing of any warranties that come with the products and materials that will be used in the construction of your new home, and any after sales service warranties that exist.
Contract: Review in detail any contract prior to signing to ensure that you understand all of the costs and obligations (both yours and the builderís) included in the deal. Do not feel pressured into signing a contract before you have had the opportunity to fully review it or seek professional advice. Do not rely on verbal agreements alone. If you have discussed any conditions, clauses or details with your builder, be sure they are included in the written contract.
The cost of your home does not end with your monthly mortgage or rent payment. You also need to consider the cost of setting up and maintaining a home.
Once you find a place to call home you will need to furnish it and make it your own. Before you start shopping, set a realistic budget and make a plan. Download our Home Essentials list (PDF) to get an idea of what you need.
Costs on top of your mortgage or rent payment may include: property taxes, insurance premiums, utilities, condo fees, renovations, landscaping, repairs and regular maintenance. These costs can vary from one home to the next. It is important to consider all possible expenses and be sure that you can afford them before signing a lease or offer. Download our Monthly Budget template (excel spreadsheet) to help manage your household expenses.
Home insurancepays for damage to or loss of the interior and exterior of your house or property.
Home insurance can cover:
damage, theft or loss of your personal possessions.
personal property stolen from your vehicle.
damage or injury to others who visit your home or property. For example, if someone slips and falls in your driveway, that person may be able to make a claim against you for the expenses incurred as a result of damage or loss caused by the injury.
accidental damage you cause to othersí property. For example, if a fire starts in your house, your home insurance can pay for the damage the fire causes to your neighbourís house.
Home or property insurance is usually required as a condition of getting a mortgage. Most financial institutions will not give you a mortgage without proof of insurance.
Condominium insurance is different from home insurance because it covers only the inside structure of your unit and your personal liability.
Condominium insurance can pay for:
damage to or loss of the interior structure of your unit.
damage to or loss of your belongings.
improvements you or the previous owners made to your unit.
your personal liabilities in case someone is injured in your home.
accidental damage you cause to other units or the condominium common areas.
If you own a condominium, the condominium corporation will have a master insurance policy that covers the outside structure of the condominium and the condominiumís common areas. This policy does not include coverage of your unit or other units.
Tenant (renterís) insurance can protect you if you live in an apartment or rent your home from someone else.
Tenant insurance can pay for:
damage to or loss of your possessions if you rent or lease your apartment or home from someone else.
personal property stolen from your vehicle.
accidental damage you cause to any part of the apartment building or home you are renting. For example, if the bathtub overflows and floods your apartment, tenant insurance can pay for the damage caused to your apartment, the apartment building and other tenants or their property.