Close your eyes and picture your first home. Are you instantly overwhelmed by a feeling of excitement, thinking about all the joys and comfort this home will bring? Does this excitement instantly vanish when you begin thinking of all the things you have to do before you find and move into this home? Buying your first home is an exciting, yet stressful process. There are many steps and considerations to tackle and it can often feel like a tiresome process. But as they say, nothing worth having comes easy!
To help navigate the process and eliminate as much stress as possible, I’ve created a guide breaking down the main benchmarks in the home buying process:
Am I ready to buy a home?
Before you commit to the home-buying process, make sure this is what you truly want. Many costs tied to homeownership aren’t included when renting. Furthermore, owning a home forces you to settle down and stay put – accepting a job halfway across the world is suddenly out of the picture. Having an honest conversation about why you want to purchase, and if this decision fits in with your other goals, is an important first step in the home-buying process. If you’re sure you’re ready to take the plunge, continue with the following steps!
Assessing financial position
Understanding what you can afford is the first thing you should do once you commit to buying your first home. It is a good idea to seek professional help to determine how much you can afford. You should also chat about your ability to make an appropriate down payment. A 20 per cent down payment allows you to avoid mortgage default insurance. Beyond these two main costs, you will also have to pay for a home inspection and appraisal, land transfer taxes, property taxes, moving costs, legal fees, etc. Make sure that you have enough savings to cover all of these costs without jeopardizing your financial health. Also, make sure you’re aware of the First-Time Home Buyer Incentive!
It’s also important to consider the longevity of a home’s affordability. Once you move into your first home, you will not be off the hook for payments. You will have your hydro, insurance, and mortgage payments on your hands, plus any additional repairs or renovations. Make sure you know exactly how much you can afford every month!
Finding the right mortgage
There are different mortgage options available to homebuyers. Depending on your situation, some mortgages may be better suited for you. Speaking with a mortgage broker to understand all your different options is a great idea. Once you’ve determined the right mortgage, you can then go onto getting pre-approved. A pre-approval is a great thing to do before looking at a home. It will expedite the process once you make an offer and give sellers comfort in knowing you can afford their home. To get pre-approved you will have to fill out an application, and provide proof of income and employment, proof of down payment, credit score, etc.
What am I looking for?
Now it’s time for the fun part! You can hire a real estate agent and begin looking at different homes in your price range. It can sometimes be overwhelming to look at all your different options, and making the final decision can be tricky. Before you start looking, it is a good idea to make a list of all the things your home must have. This can be anything from a certain number of bedrooms to the proximity to urban centers – basically anything that is very important to you. Having this list will then serve as an anchor when you are trying to decide between homes!
What happens next?
Congratulations! The offer you made on your dream home has been accepted! Now you can relax and begin moving in, right? Not quite. There are still a few things that must be done to finalize the sale. You will need to get a home inspection, review your contract, submit your mortgage application, and transfer the funds. It is important to not rush through these steps to ensure you are getting everything you deserve from this home. Your real estate agent, the bank, and your mortgage broker will be instrumental in helping you navigate through these final steps. Once this is all completed, you’ll receive the keys and begin the next chapter of your life as a homeowner. Good luck!
Are you ready to purchase your first home? Let me help by answering any other questions you may have and help you with finding the right mortgage! Reach out to me anytime!