Buying your first home is an exciting experience and it can also be quite stressful. The process of buying a home can be confusing and with all the new rules and changes to the market the amounts of things that can go wrong are endless. Here are some tips to help you reduce the stress and the number of things that could go wrong:
Know your budget:
You have to know how much of a home you can afford to buy. Take the time do a budget and write down all of your expenses along with all your income to see what your financial situation currently looks like and what it could potentially look like after you start paying a mortgage and all the extra things that come with it. When lenders and brokers do this for you they are typically only looking at your house expenses and not taking into account any car payments, gym memberships etc. that you have to pay monthly.
This is something you should be doing right when you first feel like buying a house. Create a list of all the features that you want for your home, and then the ones you can compromise on. This way you’ll be much more organized and make your realtor’s job a lot easier.
20% Down Payment:
When it comes to a down payment, it should be at the very least 5 %. But if you want to make things easier down the road, then aim for 20% of the value of the home. This way you can qualify for a conventional mortgage and not need to purchase additional mortgage insurance.
These can range anywhere from 1.5 to 3.5% of the total cost of your home. They usually include home inspection fee, legal fees, land transfer tax, appraisal fee, etc. These fees are mandatory and will have to be paid, so be sure to account for them in your budget.
Once you’ve done the aforementioned steps, then you must contact a mortgage broker or bank and get pre-approved for a mortgage, this proves you’re serious and ready to buy. Builders and realtors will ask you right away if you have a preapproval to ensure you aren’t wasting their time and yours.
When you are signing your mortgage commitment with your mortgage broker or your bank they will ask you what payment frequency you’d like for your mortgage payments. You can choose from: monthly, bi-weekly and weekly payment options.
You’ll need to have a budget and a plan for moving from your current residence into your new home. You need to decide if you’ll be hiring movers, renting a U-Haul etc. and budget accordingly.
If you’re moving into a bigger space than the one you previously lived in you’ll need to buy additional furniture, so be sure to budget for that as well.
Use your head:
Think logically and realistically rather than using emotions. This will be the biggest purchase of your life and you need to make sure that you are not paying more than you should.
Once you find your dream home, stop looking:
Once you find the house you’re looking for, stop looking. Looking further will only confuse you and cause you to make a bad decision. Stick with the choice you’ve made, and follow the tips we’ve given you and you will be fine.
If you have additional questions don’t be afraid to ask. We’re always happy to help.