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So, you are thinking about purchasing your first home. Buying a house is one of the biggest, most exciting, and most expensive ventures you will take in your lifetime. But, like any major decision, it is not one that should be made on a whim. Buying real estate requires careful thought, planning and research. To ensure you are fully prepared for this undertaking, there are many things you need to do before and during your house hunting adventures begin. If you are a first time home buyer, these tips will help guide you through your journey to property ownership.

Save, Save, Save

Advice for First Time Home Buyers: Save, Save, Save!

The more money you save beforehand, the more prepared you will be when it comes to bidding on real estate. Like most major investments, you need to put an initial deposit down first as part of the purchase. To buy a home in Canada, a minimum percentage of your home’s total price is required before you can be approved for a home buying loan. This initial payment is not covered in the mortgage. Different markets and financial lenders have policies in place regarding the minimum amount you must have before a mortgage will be approved. These percentages can range from less that 5 percent to over 20 percent of the asking price. To put this into more perspective, to get a mortgage on a $300,000.00 home, you must have between $15,000.00 to $60,000.00 saved for the initial deposit.

But your financial obligations do not end there. Buying your first home involves other expenses including closing costs, legal fees, land title transfers, insurance costs, and numerous after-purchase financial obligations such as moving expenses, unexpected repairs or renovations, utility hook-up fees, property taxes, and other miscellaneous expenditures.

Research Interest Types and Rates

When it comes to buying your first house, you want a mortgage that will work best with your immediate and future financial needs. Financial brokers, banks, and credit unions offer different types of mortgages and interest rates that you need to be aware of before shopping for your first home. Along with the variable interest rates, you should also consider what type of mortgage you want and the duration. Loan agreements can range from 10 to 30 years in many places. Research all your options first to see how the monthly loan payments will fit with your budget. 

Talk to Your Bank

Advice for First Time Home Buyers - Talk to your Bank

Before you can make any big purchase, you need to meet with your banking representative to discuss your financial status. Your agent can review your credit, go through your current money situation, let you know what types of mortgages and interest rates are available, pre-approve you for a loan, and discuss realistic lending matters with you.  They can offer advice and insight on how to save money or improve your credit rating to better your chances of getting a mortgage.

Any existing loans or poor credit history can jeopardize your chances of being approved for a mortgage. When meeting with your banking agent, review all your assets and debts, and seek their advice on ways you can improve your eligibility to get the mortgage you want.

Look For Programs and Grants

Different regions and provinces have several programs and grants available to help with the costs and expenses that come up with purchasing property.  As part of your research and planning, look for first time home buyer programs that you might qualify. Taking advantage of these incentives will save you money.

Set a Realistic Budget

First time home buyers need to set a realistic budget before they even begin looking at homes. It can be all-to-easy to get caught up in the bidding wars, and higher than expected prices, especially when you see a home you really like. But it is important to set realistic budget goals before you start looking and stick to them. Spending more than what you can afford can lower your risk of getting your mortgage approved and can cause many financial problems later on. Using online tools like a mortgage or down payment calculator can help you with your budget planning.

Decide on Where and What You Want Today and Tomorrow

Advice for First Time Home Buyers - Decide on Where and What You Want Today and Tomorrow

Because a house is something that you will be living in for several years, you need to think about what you want immediately and in the future. Consider where you want to live. If you are moving to a city, what area of town do you want to be in? What amenities are near by? Even if you don’t have kids, being close to schools and parks will be important later if you do plan to have kids. Consider neighbourhood safety, transportation options, noise levels, pet friendliness, and personal interests.

Once you know where you want to live and the neighbourhood must-haves, it is time to think about what you want in a home. How many bedrooms and bathrooms do you want? Other features to consider include: a  garage, basement, large back yard, a fenced yard, parking space options, and other design features such as a fire place, patio, veranda, large kitchen or bathroom, and back yard pool. Once you know exactly where you want to live and what you want, it is time to move onto the next step.

Find the Right Agent

Once you have completed your financial plan and have a clear idea of what you are looking for in a home and location, it is time to find the right agent. Your agent should be knowledgeable of the region and market. They should work with you to help you find your dream home. The right realtor should be authentic and genuine. They will listen to your needs and find homes that meet your criteria. 

Shop Around

Do not buy the first house you see. Even if you really like it, look at other homes on the market so you get a better idea of what is available and the asking prices. You will get a chance to see difference layouts, floorplans, and internal and external décor schemes. Visit as many open houses as possible Open house events are a great way to see homes currently on the market without making an appointment first.

Stick To Your Budget

Advice for First Time Home Buyers - Stick to your Budget=

As mentioned, it is easy to get caught up in the buying and bidding wars, especially when you see a home you really like. However, placing an offer on a place that is too far out of your budget can cause serious financial problems in the near or distant future. When shopping, it is important to stick to your budget. Look at homes that are within your range only and avoid over bidding just to get the home.

Do not bid out of desperation. Many people will place offers far higher than what they can afford because they desperately want the property. As eager as you may be feeling when you see a place you really like, it is important to be steadfast in your budget plan.

Shop With a Housing Expert

As a first time home buyer, looking at different places and knowing what to look for in a home can be overwhelming. When shopping, bring someone with you who is knowledgeable about houses to help you look for hidden and not-so-hidden issues or potential pitfalls in the home and surrounding land.  If you are really interested in a place, book an appointment with a home inspector to check the place first. This can help save you a lot of money and stress if the building has serious structural or design issues.

Have Fun

As a first time home buyer, this is one of your first major purchases and something that you should enjoy. Buying your first home brings out a range of different emotions including exciting, frustrating, stressful, hopeful, thrilling, scary, and memorable. While it is easy to get overwhelmed by the process, it is equally important to have fun with it.

Home shopping should never address your immediate lifestyle needs only. Because you will be living in your place for at least a few years, it is important to think about all your housing and financial needs today and tomorrow before buying property. Remember, buying a house is not an immediate purchase. The more time you spend preparing for it, the better position you will be in after you sign the dotted line.