7 Tips For First Time Home Buyers
Monday Oct 14th, 2019Share
Thank you for tuning into my video blog. During this video, I'll share with you 7 tips for first-time buyers.
1. Make sure you're aware of the minimum down payment
Your down payment is determined by your home's purchase price. The biggest hurdle for first-time home buyers is saving up for a down payment. This is why a savings plan is essential. A savings plan helps you set a target down payment goal. This is important because a larger down payment will decrease the amount you need to borrow for the home.
2 Get a Pre-approval!
Most Canadians think the first step in the buying process is to contact a real estate agent and start looking at homes... this is incorrect.
Once you’ve saved up enough for your down payment, the first thing you should do, is acquire a mortgage pre-approval.
3. Make sure you can afford the home you want
Be realistic about what kind of property you can actually afford. Your household income, personal monthly expenses, and home costs like property taxes, condo fees, and heating & electricity bills all factor into the total amount you can borrow
4. Shop around!
You shop around for a home when you house hunt, so do the same when you get a mortgage. You likely won't receive the best rate from the local bank branch so do your research and compare rates.
5. Consider using a Mortgage Broker
You may be unaware, but mortgage brokers can get you a mortgage with a bank ... at lower rates! Mortgage brokers compare mortgages from a variety of banks and financial institutions in order to find the best options for their clients.
In addition to the big banks, mortgage brokers have access to different mortgage products and special rates from trust companies, as well as credit unions. They also work with smaller lenders who won't have the high overhead costs of a big bank, which therefore means better rates and fewer fees for you. The best part is that most mortgage brokers don't charge you for their services!
6. Take advantage of First-Time Home Buyer Programs
Be familiar with the various programs that apply to your situation. It could be a rebate that you may qualified for, or one of the number of government programs that could potentially save some money for your first home purchase.
7. Keep on Saving
Your down payment and your monthly mortgage payments are just the beginning of your home purchase journey. There are a lot of additional costs that come with buying your first home such as closing costs, land transfer tax, and CMHC insurance. That’s why a savings plan is essential even after you have saved enough for your down payment.
My pro-tip is to reserve 3-5% of your home’s purchase price. This will cover your closing costs and renovations that may be required once you move in. A savings plan is absolutely essential... even after you've saved enough for your down payment! The down payment and monthly mortgage payments are just the beginning of your home purchase journey.