What you need to know before Buying your First Home
Published on January 24th, 2018
When you set out to purchase your first home, you are sure to have many questions. Before buying your first home, the most important thing you can do is gather as much knowledge and information as you can. This will put you in a great spot to make educated decisions. Here is some important information to get you started.
What Are Your Financial Resources?
It’s important that you think ahead before you fall in love with a home. Sit down and figure out what you can realistically afford. It’s a good idea to speak with a mortgage professional to find out what your options are, and consider getting pre-approved so you can act quickly once you find the home of your dreams.
Homes with a purchase price of $500,000 or less require a 5% down payment;
$500,000-$999,999 require 5% for the first $500,000 of the purchase price and 10% for the remaining purchase price;
Homes with a purchase price of $1 million or more require a minimum 20% down payment. (canada.ca)
Whether you’ve already started saving your down payment, or are just getting started now, here are some things to think about:
Prioritize your spending. Try to avoid unnecessary purchases, cut-back on restaurants, etc.
Borrow from your RRSP. “You can withdraw up to $25,000 from your RRSP to buy your first home” (mymoneycoach.ca).
Borrow money from family. And pay with back with interest, of course.
Open a tax-free savings account. A TSFA is a great way to keep your savings separate.
Focus on paying off any debt. If you’re paying interest on any debt, focus on eliminating that expense.
Stay focused! If you’re given any extra money – a work bonus, a gift, a raise, etc. – keep your eye on the prize. It’s tempting to splurge on a fancy dinner, but stay focused and put the extra funds in your savings account and you’ll be one step closer to home ownership.
Who Can Help You?
Buying your first home will be a new experience, so you’re going to want to have a trusted professional to answer all your questions. The best resource you can get is an experienced REALTOR® who can guide you through this process.
When you speak with a REALTOR® be sure to ask a lot of questions. For example:
How long have you been a REALTOR®?
Can you explain what the buying process looks like?
What information will you be able to gather for me on a home I’m interested in?
Can you tell me a little bit about your negotiation strategy?
What is your role in the home inspection process?
Do you have some testimonials from buyers?
Do you recommend a certain mortgage lender, and why?
You can do your own research to find out as much as you can about the Georgian Triangle real estate market, but no one will be more knowledgeable than a REALTOR® who lives and breathes the market.
How Do You Select “The One?”
Your Wish List
To give your house hunt some direction, create a wish list of all the features you would like in a home. Can you include ideal neighbourhoods, number of bedrooms, property characteristics, etc.
Now visit your list and prioritize each item. Number your list from most important to least important. This list will help you think about what really matters to you and it will be valuable when you begin comparing properties.
The Search Is On
Locationsnorth.com is a great place to start your home search. The search tool allows you to search homes by property type, community, number of bedrooms, price, etc.
Viewing listings online is fun, but there is no substitute for viewing a property in person with your REALTOR®. During the home search, your REALTOR® is a great asset because they are an extra set of experienced eyes and can provide expert analysis.
When you set out to view multiple properties, it’s a great idea to take notes, including:
What you liked about each property
What you didn’t like about each property
Specific features you noticed
Thoughts about the area and neighbourhood
Expert Advice For First-Time Home Buyers
If you have any questions about the buying process, how to get started, or would like to view a property, do not hesitate to reach out. We’re here to help!