So, you are looking to buy a home. Whether you are a first-time homebuyer or have been through the property purchase process before, one fact remains true: Buying a home is a stressful process! Between finding a suitable property, hiring an agent, saving up for a down payment, securing a mortgage, closing the transaction, and moving into your new home, there is a very long list of essential activities that must be completed. Having this to-do list of home buying related tasks hanging above your head often results in large amounts of stress placed on the homebuyer. It may be impossible to completely remove all the stress of buying a home. However, there are some steps you can take to smooth out the process and make buying a home less stressful. Our team has compiled a list of tips to take into consideration before you begin your home-buying pursuit!
Make a budget
The first step when looking to buy a home should always be deciding how expensive of a property you can afford. You want to find a maximum price you are able to spend by creating a budget of how much you can afford on a monthly basis. Your maximum purchase price should take into account how much of a down payment you are planning on saving (remember you need a minimum five per cent of the property value, but we encourage saving 20 per cent to avoid mortgage default insurance) and how much you can afford for recurring housing costs such as mortgage payments, hydro, taxes, etc.
There are many costs to consider when budgeting the purchase of a home so it is important to consult a real estate professional while you build your budget. Additionally, we recommend not fully extending yourself financially, but rather leaving a buffer of room between the purchase price of your home and your maximum affordability. Leaving a buffer ensures that you will be able to meet any unforeseen costs that are sure to pop up while occupying your new residence.
Know what you want
It starts with knowing how much you are able to spend. Then you are ready to create a list of features your home must have to suit your lifestyle. You will significantly cut down the amount of time you spend looking through houses if you have a very clear idea of exactly what you need/want from your new home. Think about the number of bedrooms you need, the location you want to be in, and any other features you deem essential, such as a pool or guest suite. You are then able to refine any major listings website to only show the properties that fit your budget and desired features.
Get pre-approved for a mortgage
There is nothing worse than falling in love with a property but missing your chance to purchase it because you are unable to get your finances in order in time. To avoid the stress and heartache associated with scrambling to organize your finances, it is advantageous to get pre-approved for a mortgage. To help with the pre-approval process, make sure to pay down as much of your debt as possible. This will raise your credit rating and make you a more desirable candidate for a loan. Paying down debt will also ensure you qualify for the best possible interest rate available, saving you lots of money in the long run.
Listen to your real estate agent
There is a good chance your real estate agent knows more about the home buying process than you do. After all, this is their job. Just like how you listen to your doctor when told to consume less sodium, you should listen to your agent when they give you pre-closing advice. Many agents will advise adding certain contingencies to your offer for the property to meet satisfactory home inspection or for the seller to make certain repairs before the closing of the sale. This seemingly insignificant requirement could end up saving you massive amounts of time and money over the long run.
Speaking with a mortgage broker can help remove some of the stress of buying a home. If you are planning on buying a home and need some advice, give me a call at (705) 333-4338 or get in touch with me here!