Tips to follow when you’re a first-time homebuyer
Thinking of buying your own place? It’s normal to feel a little overwhelmed. After all, it’s the biggest purchase you can make. In an effort to remove some stress from the equation, here are a few tips:
1. Get pre-approved. This is an important first step in the home-buying process. Do you know how much house you can afford? You don’t want to start house-hunting and fall for a home you can’t afford. Pre-approval helps you in other ways. Consider this scenario. A home seller gets two similar offers. One is accompanied by a letter from the buyer’s bank that states she is preapproved for a mortgage in the amount of the offer. The other has no supporting documents. Which offer do you think the seller will consider first? Plus, there may be problems with your credit that you don’t know about. Your credit is one of three factors that will be considered before you get approved for a mortgage. The other two are income and your down payment. You will need 20% down if you want to avoid paying CMHC’s mortgage default insurance. It’s calculated based on the size of your mortgage and how much money you have down. Of course the bigger the down payment, the smaller your loan (and overall interest charges) will be. One way to help boost your down payment is to borrow money from your RRSP. First-time buyers can pull out $25,000 tax-free and have 15 years to pay it back. If you’re buying with your partner, you can contribute $50,000 together.
2. Find a Real Estate agent. While having a Real Estate agent is not necessary when buying a home, it is recommended — especially if it’s your first time going through the process. Having someone who is knowledgeable about the market leading you through the process could take a big weight off your shoulders. Your agent is an expert in their area. They will help you navigate through comparable properties, location advantages/disadvantages, and pros & cons of transportation options in the area. When it comes time to put in an offer, your agent will help you come up with a strategy and implement that strategy to ensure your success. Negotiation is a skill your agent will have perfected and is one that will help you get the best deal, and possibly beat out other potential buyers in a multiple offer situation.
3. Stay mindful of your budget. One of the biggest things you have to consider in this decision is your lifestyle and what that requires from a cost perspective. Create a monthly budget to review to ensure buying a home at this particular time is the right thing to do. You should also keep in mind during your search just because a bank approves you for a certain amount, doesn’t mean you have to spend it all. You do not want to spread your finances too thin.
4. Sorting out your needs and wants. Buying a home isn’t as difficult as you might think but the process will go a lot smoother if you get familiar with your real estate market. Narrow down what your current and future housing needs are and what characteristics are important to you in a home. Let your Real Estate professional help you with this process.
5. Be open. Wallpaper can be removed, walls painted and cupboards changed. The things you should be more concerned about is the size and layout, along with the condition of the roof, plumbing and hot water tank 6. Don’t forget about closing costs. Closing costs can add up. The CMHC recommends putting aside anywhere from 1.5 to four per cent of the purchase price to cover them. Don’t forget to also save for a rainy day. You never know when that hot water tank could break down. Information via and for more great Home Buying tips visit: