Thinking of buying your first home? For most Canadians, buying that first home will be one of the biggest financial decisions they will ever make. There is a lot to consider but in the long run, the benefits of owning your own home are plenty! Here is a check list to make sure you are ready to take this big step:
Do you have a down payment saved?
At a bare minimum, you will need at least 5% of the purchase price saved up but with increasingly stiff approval requirements, the more you have saved the better. To qualify for the best mortgage rates and to increase your changes of approval, at least 20% down is recommended.
Have you checked your credit score?
Your credit score will be paramount to a lender in determining if you are credit worthy. Best to check in advance to avoid any last minute surprises. This will also give you the opportunity to clean up any outstanding debts and correct any errors the credit bureau may have made.
Have you shopped for a mortgage lender?
Before you even start looking for your new home, it’s important to engage a lender and this means shopping around. If you are “credit worthy”, most lenders will sharpen their pencils to get you the best rates, terms and options available so feel free to discuss your needs with multiple banks and independent mortgage brokers to make sure you get the deal.
Are you Pre-Approved?
Once you have explored your lending options, make sure you lender pre-qualifies you for a mortgage. A good lender or mortgage broker will help you establish how much of a mortgage you will qualify for and with a pre-approval in hand, you can shop knowing exactly how much you can afford. Pre-qualification will also put you in a much stronger negotiating position as sellers can be confident you have the means to follow thru with a purchase.
Have you made your wish list?
Begin your search by making a list of your “must haves” and “wants”. Be prepared to sacrifice some of your “wants” in order to satisfy your “must haves” and be realistic about what your budget will allow. Here are some things to consider when making your list:
- How many bedrooms and bathrooms do you need? Do you need space for a home office, a two-car garage?
- Do you want air conditioning, storage or hobby space, a fireplace, a swimming pool? Do you have family members with special needs?
- Do you have or plan to have children and need room to grow?
- Do you need a substantial backyard? Do you have pets?
- How much storage space will you need?
- Do you want “move-in” ready or are you looking to build equity in a “fixer upper”?
- Location! Location! Location! How far will you be commuting to work and school
Have you engaged a Realtor?
Once you are ready to start your search, make sure to engage the services of ONE licensed agent you trust and are comfortable with. A really good agent will listen carefully to your needs, assist you in weeding thru multiple homes that may or may not meet your approval, schedule tours of multiple homes for you, advise you of any new listings that meet your needs (usually before they are available to the general public), assist you in determining fair market value of any homes you are interested in, assist you in presenting and negotiating an offer, helping you navigate the sales process from making your offer to moving in and will be a invaluable resource throughout. A Licensed agent can save you time and money and save you from making many of the mistakes even seasoned buyers are apt to make. And, generally, the services of a licensed agent do not cost a buyer anything!