Buying your first home is an exciting but also a scary time in your life. You’re excited to start a new chapter where you have a place to share experiences and build memories, but navigating the purchasing process can be overwhelming for first-time buyers. Being prepared, talking to an agent and getting pre-approved will help make your first purchase a breeze.
This should be done well before you even start the search for your dream home. Getting pre-approval for financing and a mortgage will tell you how much you can afford for your first home. It will also give you an idea of what your mortgage payments will be. Be sure to consider these factors when looking for approval:
- Your job – your approval and financing are heavily based on having a steady income. Try not to change job during this process.
- Other debt – try not to make other major purchases, such as a car, boat, furniture, etc., before or after the purchase of your home so your approval is not in jeopardy.
- Help – if you’re receiving monetary assistance or gifts from friends or family for the purchase and/or down payment, be sure to talk to your financial advisor to see whether or not it will affect your approval.
- Compare – talk to more than one lender, compare banks, rates, etc., and talk to your real estate agent to see who they recommend.
Be serious, your first home probably isn’t going to be your dream home, but think of it as a stepping stone for the future. Before house hunting, come up with a list of ‘must-haves’ and ‘must-not-haves’ and another list of things you want or don’t want, but are willing to compromise on. While doing this, be mindful of what stage of your life you’re in, what you will use the space for, and how long you’ll be there for. Once this is complete, you can start looking at real estate listings in your desired neighbourhood.
When you set your budget, understand that there are a handful of other expenses that come with closing a deal and starting your life in your new home. Some of these expenses include:
- Home inspection fee
- Legal fees
- Property transfer tax
- Appraisal fee
- Title insurance
- Hydro and Union Gas deposits
- Activation fees for utilities and internet