Buying your first home is an exciting moment and huge milestone. It does not have to be stressful if you plan everything out and make sure you understand the step-by-step process.
Take these tips into consideration. It may help you establish a plan of action and what to do next.
It may seem obvious, but you will want to be pre-approved for a mortgage first. It will help you determine what you can shop around for and help to create your own mortgage payment plan/limit. Which brings us to our next point.
Improve Your Credit Score
If you know your credit score may not be the greatest, try to improve it before hand to prove to your lender you are a reliable customer and have steady income to make your payments. Pay off any outstanding debts or loans otherwise, you may not be approved for the amount you need or want.
To Have A Higher Down Payment
You may have saved up enough for a down payment, but is it for 5% or 15%? The higher your down payment, the lower your mortgage payments will be, and you may be offered lower interest rates. Your home equity will also increase right away which can help you if you ever need a home equity line of credit or are wanting to sell in the future.
Find A REALTOR®
Once you are ready to find a real estate agent to help you with the buying process, you will want to make sure you are finding the right one. Interview different agents, maybe three to four to get a feeling on who you will work best with and who has your best interest at heart. Building a trusting and honest relationship with them will make everything easier and less stressful, especially when you know you can go to them for anything and ask any questions.
Use A Reasonable Loan Amount
Just because you were pre-approved for a certain amount, does not mean you need to use all of it. If you purchase a cheaper house you absolutely know you can afford and pay off your smaller loan, then think about moving into a bigger home with a higher loan approval. Your credit score will have improved immensely and you should have been able to save enough to be able to afford your newer home.
Remember, in most people’s cases, you are not getting your dream home right away. You may have to start small, as mentioned above, but this way you know you can afford it and may be able to go with a smaller amortization period. After a few years, you may be able to upgrade, especially if your income has increased.
Try Not To Judge Interior
It may seem hard, especially if you have a certain style in mind, but try to look past what you may consider an “ugly” interior. If the home is old, it may have outdated wallpaper and carpet, but that can all be changed. If you look for homes that are under your budget, it will be easier to afford renovations, particularly if you love the layout but just do not like the style the previous owners had.
Compare Mortgage & Interest Rates
Even though you are with a specific bank, does not necessarily mean you need to go through them for a loan. Shop around for different rates. Do the research behind the different mortgage options>> too. There are certain ones that will fit your needs and others that may not be the best option for you, depending on your situation.
Open House Time
Finally being able to go through open houses can be exciting, but do not rush into things. There are questions you should ask your real estate agent about the houses you are going through. It may seem pretty on the outside, but what lies underneath could end up being costly if you have a tight budget. If you decide to put an offer down, have a home inspector come through the house. They will point out the issues that need to be addressed and how to prevent problems from happening in the future.
It cannot be stressed enough that your down payment and mortgage payments are not the only costs to budget for. You will need to take into consideration moving and closing costs. Your REALTOR® can tell you what closing costs will be involved and go over them with you, since they will be outlined in the contract.
Buying a home is the most expensive purchase you will ever make, so why not make the process as easy as possible. Break down each step, stay organized, and remember to stay positive. Just because you have to go with a smaller home now does not mean you will live in it forever.
And remember your real estate agent is there to answer any questions, including what you should budget for other than your down payment.
Check for real estate agents in Toronto here:
Agent Name: Andrew W. | View Agent Profile>>
Serving Area: East York, Etobicoke, Markham, Newmarket, North York, Oakville, Richmond Hill, Scarborough, Toronto
"Andrew is a marketing professional and a purchasing specialist with over 10+ years of experience in the real estate industry."
Agent Name: Jason B. | View Agent Profile>>
Serving Area: Brampton, Caledon, Etobicoke, Halton Hills, Mississauga, Oakville, Toronto, Vaughan, York
"Award winning and full-time consultant specializing in helping buyers and sellers with their everyday real estate needs."
Agent Name: Marianne K. | View Agent Profile>>
Serving Area: Halton Hills, Hamilton, Mississauga, Oakville, Toronto
"I am a Certified Negotiation Expert (CNE®). My advanced negotiation skills produce the best results for my clients."