5 Tips To Make Buying Your First Home Easier
Friday Jun 04th, 2021Share
Buying a home is one of the biggest decisions you’ll ever make. This is especially the case for first-time homebuyers new to the world of real estate. To ensure the home buying process goes off without a hitch, we’ve put together a list of 5 tips to make buying your first home as easy as possible.
Before you start dreaming of your future home, you first need to figure out if you qualify for a mortgage. Without a mortgage, it’s pretty unlikely that buying a home is within your financial reach, so you’ll want to do everything in your power to ensure you qualify for one. The trick to getting a mortgage? Having a good credit score. While you can still qualify for a mortgage even with a credit score on the lower side, the better your credit score is, the better the interest rate on your mortgage will be. Your first step should be finding out your credit score so you have an idea of where you stand. From there, take certain steps to strengthen your credit score. For example, paying all your bills on time and keeping credit card balances low can help build credit, as can keeping current credit cards open (closing a credit card can actually lower your score). You can also improve your credit score by diversifying the type of credit accounts you have and monitoring your credit score reports regularly.
Homes are expensive. That’s just a fact. According to the Canadian Real Estate Association, the average home price in Canada in January 2020 was $504,350. Therefore, the earlier you start saving the better off you will be. There are three main costs that you’ll want to start saving for as early as possible. The first is your down payment. The amount you’ll spend on your down payment will depend on the type of mortgage you choose and the lender, but you can expect to put down anywhere between 5% and 20%. In Canada, for homes priced under $500,000, the minimum downpayment is 5% and for homes priced between $500,000 and $999,999, the minimum downpayment is 5% of $500,000 plus 10% of the remaining amount. The second major cost is closing costs, otherwise known as the fees you must pay to finalize your mortgage. The last major cost associated with buying a home is the moving expenses. You’ll need to save up some money to pay for immediate home repairs, upgrades, furnishings, and hiring a mover to move the belongings from your current home into your new home.
To make buying your first home as stress-free as possible, get pre-approved for a mortgage. And when we say get pre-approved for a mortgage, we don’t mean Google “pre-approval mortgage calculator” and receive an estimate of what you might qualify for. No, we mean to get a true pre-approved mortgage from a credible lender. Specifically, you should obtain a pre-approval letter from the lender that outlines exactly how much loan money you can receive. This number should be based on factors like your bank statements and credit score. Getting pre-approved for a mortgage has many benefits. It will let you and your real estate agent know exactly what you can afford and it will strengthen your offer as it proves to the seller you have the money you need to buy their home.
Take advantage of open houses! Open houses are free to attend and they’ll help you get a better feel for the house than any amount of photos ever could. Plus, visiting an open house allows you to check out the rest of the street and neighborhood, to determine if it’s somewhere you could see yourself long-term. Even before you’ve decided you want to purchase a home, we recommend visiting open houses. It’s a fun and obligation-free way of seeing what’s out there. They’re especially useful for homebuyers who don’t know exactly what it is they’re looking for. The more properties you visit, the more you’ll realize what you are and aren't looking for in a future home. Throughout the entire home buying process, visit as many open houses (that are within your budget) as possible. You can start right now by contacting me and I can find an open house in the neighborhood that we can go and see to get your home buying process started on the right foot.
One final piece of advice? Stick to your budget. You’ve probably already heard this several times before but it bears repeating. Buying a home for the first can be extremely exciting, but purchasing a property out of your means and dealing with the stress of having to pay for it is not. Some lenders may offer to loan you more money than you’re comfortable taking, or they might pressure you by saying you’ll need a larger loan to beat out other offers. Taking out a loan you can’t afford and buying a home that’s out of your budget is ultimately not the way you want to start your homeownership journey. To avoid financial stress long-term, set a price range that makes sense based on your current finances and doesn’t go over it. If you are looking for a mortgage expert, I can connect to one I worked in and know. Drop me an email or SMS/text me at 613-809-8708 and I will do the rest.
Buying your first home can be both an exciting and stressful experience. Make the home buying process as smooth as possible by following the advice above. Strengthening your credit score, saving early, getting pre-approved for a mortgage, attending lots of open houses, and staying within your budget are all important steps to take when buying your first home in Canada. When you are ready to take the next step, I will be happy to guide you through it.