8 Must-Dos For A First Time Home Buyer
Purchasing your first home is exciting but can be a little scary. Sometimes people let the excitement take over and they approach the purchase with an impulsive attitude. As a result, they could possibly miss out on programs to help them or purchase something that will leave them house poor.
With careful planning, you can make your first major investment something you can benefit from in the future.
Check Your Credit Report
Before you even begin searching for homes and floorplans, you need to check if you have the credit to do it. The higher the number is on your credit score, the easier it will be to get pre-approved for a mortgage.
Credit scores are broken down into tiers:
Excellent – 800 or higher
Good – 700-799
Fair – 600-699
Poor – Anything below 600
You can find several sites online that allow you to do soft checks on your credit score. These soft checks won’t affect your credit rating and can show you if you need to make adjustments to your finances.
Websites like Borrowell and Credit Karma offer free soft credit checks to help keep your finances on track.
Go To Open Houses And Show Homes
Before deciding which house you want, you first have to discover what you do not want in a home. By visiting open houses and show homes, you can see a variety of floorplans. Each of these homes may have something you want or something you dislike.
This is especially important if you are leaning toward building a home. By visiting and exploring several different layouts, you’ll be able to decide what you’d like to include in your home.
If you’ve decided to go with a previously owned home, looking at show homes will give you an idea of the possibilities available. Sometimes people settle after looking at two or three homes, which isn’t necessarily a great idea. By attending open houses, you can see a variety of homes and styles you might like.
Write Down Your Needs And Wants
Once you’ve been to several different houses, you can better understand what exactly you’re looking for. At this point, it’s time to sit down and think about a house that will give you everything you need.
When considering this, make sure you look toward your future as well. For example, if you’re planning on having a family, you may want a bigger home. You can also purchase homes with developed basement suites if you’re looking to make some extra money.
In any case, you'll want to know what your deal breakers are. This means looking at the square footage you’ll need, lot size, and garage space.
Decide Your Budget
When purchasing your own home, you need to look at what you can afford. Having a budget in place is a must. You will want to make sure the mortgage payments and interest rates are affordable.
Another thing to consider is your property taxes. This varies depending on the municipality, but it can be a significant amount. So, one of the things you’ll have to consider when purchasing a home is what the taxes will be for that area.
There are other extra payments that come with purchasing a house beyond the price of the home. It's best to do your research and be aware of any additional expenses you might be facing.
Look For First-Time Home Buyer Resources
Though many are unaware, first-time homebuyers can get several rebates, grants, and bursaries. The Canadian Government offers some through the Canadian Mortgaging and Housing Corporation.
There are other places you can find information as well. Each province has its own incentives available, and with a little research, you can find them.
It’s also worth noting that some municipalities have programs to help first-time buyers.
Take a look around. Spending time doing research can save you a significant amount of money.
Save Money (Even More Than You Think)
Beyond the mortgage of the home you’re purchasing, there are other expenses to consider. The entire process of buying a home has additional expenses.
You have to consider the costs of the Realtors, lawyers, and any lender’s fees. Then you’ll want to look at the closing costs, title transfer, home inspection, and many other costs that can add up. Try to save more money than just your down payment on the home to be safe. Also, keep in mind any time you will have to take off from work to look at homes and eventually move.
Get Pre-Approved For Your Mortgage
Before looking at homes, you need to talk to someone about getting a mortgage. There are many different factors that can figure into your eligibility.
For example, you’ll want to look at your debt to income ratio along with your credit score. If your debt to income ratio is too high, you may struggle to get a loan whether you have great credit or not.
Your job might also be a factor. For example, self-employed people have to show different types of proof of income to banks, and it’s best to be fully prepared. Besides, knowing what you can afford to buy will save you disappointment in the future.
Ask To See Neighbourhood Plans
When looking at homes, you need to consider the area you’ll be moving into. Young children will need schools and play areas nearby. You’ll also want to know what the commute time to your work will be. Seeing the plan will also allow you to check that all of the amenities you want are close by.
If you’re planning to build a home, looking at the future plans of the neighbourhood can also be helpful. You’ll want to have a good idea of what the community will be in the next ten or fifteen years.
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