Buying a new home is an exciting time. From the very first moment you see the home you want to make an offer on, you are emotionally attached. The first time you walk through its rooms, you imagine your furniture there; you decorate the spaces instantly in your mind. You can see your family living there happily year after year. Even before the ink dries on your offer, you are planning improvement projects.

Yes, it is emotional. Yes, it is exciting. But what if something goes wrong? Should you blindly hold onto a home and follow through with the transaction just because you love the home? When should you back out of purchasing real estate in Toronto? The following 5 are red flags that you should pay special attention to:

You should seriously consider backing out if there is debt attached to the house. Back taxes and some liens are inherited by the purchaser. You could end up paying more for your home than you bargained for. If there is serious structural damage to the home, you might want to rethink your offer. Some foundation problems are very expensive to fix. Although rare, some homes have to be torn down due to structural issues that cannot be fixed. When you purchase a house, the house is not as important as the neighborhood you buy in. You should always purchase a home in a good neighborhood where property values are rising. Housing prices in impoverished neighborhoods steadily decline. If you purchase such a property, your home will be worth less in the future than it is now. You should always purchase a home where you will have room to grow. Choosing cuteness over space could end up being the bane of your existence later on down the road. Remember, you can always decorate your home to suit your style. On the other hand, it is difficult to add more space to a home and lot that is cramped and limited. It is highly advisable to purchase several professional inspections before you purchase real estate in Toronto. If any of the inspections come back with negative results, you will have a difficult choice to make. You will either have to repair the issues yourself, ask the seller to repair them or back out of the deal.

Once you are emotionally attached to a home, it can be very difficult to call off the transaction. But don’t try to fool yourself. If you can envision a future where you will regret going through with the purchase, back out. There are too many homes on the market. You will find something else. There is no reason to get stuck with something that is less than perfect.

And don’t worry about the legalities of it. There are clauses on every offer that give you a legal way to back out of the contract. If you’re unsure, ask your agent.

Bank of Canada Governor Mark Carney recently stated that the recession is over. Many experts quickly stepped up to temper his optimism with a little dose of reality. Yes, they said, the economy may have experienced marginal growth, marking an end to the technical recession, but there is still a long way to go.

Many cite increasing jobless rates as a sign that the economy is still struggling. Manufacturers are reporting large inventories and maintaining hiring freezes. Some manufacturers are also reporting that the value of their current orders has dropped since the beginning of the year.

Given this negative news, how should mortgage holders feel? Is the jobless rate going to lead to sell-offs or foreclosures? Will it be harder for borrowers to get the money they need?

In April of 2009, the Canadian Association of Accredited Mortgage Professionals (CAAMP) prepared a report about the state of the Canadian mortgage market. Entitled The Canadian Residential Mortgage Market During Challenging Times, the report actually has some good news for Canadian mortgage holders. While the authors concede that there could still be some challenges in Canada, the risks here are considerably lower than in the United States. Points raised in support of this statement include:

• In the U.S., troubles were triggered by large increases in mortgage rates. In Canada, rates have remained at historic lows. In fact, the report predicts that 75% of Canadian mortgage holders will find reduced rates at their next mortgage renewal. Even those whose rates increase will find the increases to be minor and manageable.

• The increasing unemployment rate in Canada is worrisome and contributes to the risk of mortgage troubles. The report found that among homeowners with mortgages where one or more primary earners have lost their job, 14% are concerned about being able to make their monthly mortgage payment. But, unlike in the U.S., most have amassed substantial equity in their homes which they can draw upon to help them in times of need.

• Panic selling has become a problem south of the border, but the report does not forecast the same trend occurring in Canada. Yes, homeowners who have lost employment could sell their homes to help them manage, but there is no evidence of the panic seen in parts of the U.S.

• Canadians tend to have much more home equity than Americans, which means they also have more options when it comes to managing with less income. Unlike the U.S., where negative equity (where the mortgage is more than the value of the home) is a problem, only about 2% of Canadian homeowners owe more on their mortgages than their home is worth.

• Canadian lenders and mortgage insurers are more willing to work with and assist troubled borrowers.

• Overall, the conditions that have caused the troubles in the U.S. do not exist in Canada. There may be some homeowners here who are at risk of losing their homes, but for the most part, Canadian homeowners are on much safer ground.

All in all, the outlook for Canadian mortgage holders is considerably brighter than for those below the 49th parallel. And for those who need some assistance, mortgage brokers can offer a range of affordable home equity products and debt consolidation strategies to help them weather the storm.

For many people, mortgage payments are their single largest expense. Yet, when financing a home, most Canadians don’t comparison shop to ensure they’re getting the best mortgage rate and terms available. This mistake can cost homeowners tens of thousands of dollars over the course of their mortgage.

Here are seven ways mortgage brokers can help:

Access to competitive rates

Brokers deal with multiple competing lenders and can often access exclusive rates. Based on the number of mortgages brokers complete each year, they also have the power to negotiate rate discounts from lenders, which can be passed on to their clients.

A free service

Mortgage brokers’ services are typically available at no cost to consumers. Brokers are paid by the lender selected by their clients.

Knowledgeable advice

Brokers offer consultative service, advice and solutions that are customized to each client’s needs. And unlike banks, brokers work for you.

Speed and convenience

Brokers will work around a client’s schedule to make the transaction as easy and convenient as possible.

Pre-qualification

Whether you’re shopping for a new home or refinancing your existing mortgage, a broker can help you obtain a pre-approved mortgage, often with up to a 120-day interest rate guarantee.

Preserved credit rating

When you shop for a mortgage, there is an accumulation of lender inquiries on your credit bureau report, possibly affecting your credit rating and, ultimately, the rate and terms of your mortgage. This isn’t the case with a mortgage broker, who only does one inquiry yet can still get many competing lenders to quote on your business.

Peace of Mind

The Canadian Association of Accredited Mortgage Brokers has a stringent Code of Ethics that members are required to adhere to in order to retain membership.