Buying a home is one of the biggest decisions and purchases you can make. There is a lot to consider when buying your first home and it’s not all about the house. You will need to ask yourself many questions and take a lot into consideration, are you ready for buy your first home? In this First Time Home Owner Guide we are going to address steps you should take when making the decision to buy a home, benefits of owning your own home and what to do once the decision is made.
Step 1 –Is Homeownership right for you? Here are some points to consider:
- Costs of homeownership can be high, ongoing and unexpected. Of course there are direct costs such as the cost of the home, down payment, closing costs and taxes. Ongoing costs which include mortgage payments, insurance, utility bills and property taxes. And then there are the unexpected costs that could be expensive, such as home repairs and renovations.
- Financial resources, do you have them? Are you ready and able to pay for the costs mentioned above. Are you in a good place to invest a large amount of money?
- Do you have some stability in your life? It is ideal to stay in your home for some time to build equity before moving again.
Step 2 – Are you financially prepared?
- Before you start looking for a home you should know how much you can afford. You should head to a mortgage broker if you haven’t already to discuss how much of a mortgage you qualify for. You can also take a look at our MORTGAGE CALCULATOR LINK HERE.
- First time home owners in Ontario do qualify for the Home Buyer’s Plan. Be sure to ask your sales representative for details about this tax-free plan.
- Be prepared to when you meet your lender or broker by calculating your current expenses which include household expenses such as groceries, clothing, gifts and child care. Entertainment expenses like dining out or hobbies. Loans/debts and don’t forget to add monies that are going toward savings like RRSP’s and saving accounts.
- Get pre-approved. This does not guarantee approval for a mortgage but it will give you an idea of what you can afford and that your lender/broker are willing to help you.
Step 3– What are you looking for? Some important questions to consider…
- Location is very important. How far are you willing to travel? Are you planning on having a family, if so where are the schools located? Are stores and amenities easily accessible?
- How big do you need your home to be? How many bathrooms and bedrooms are needed? Is a garage, home office or storage important to you? Do you want a bungalow, townhouse or country home?
- Extra features. Is air conditioning, new appliances or a swimming pool on your must have list? Are you willing/able to do any remodelling? Do you require new lighting or window coverings.
- Will you home buy or home build? Do you want a brand new home, a previously owned home or are you considering building your own home. There are pro’s and con’s to each – be sure to do your research on each.
Step 4 – Making an offer and Closing the deal.
- Once you’ve found the home you want to buy you’ll need give the seller and offer to purchase. This will be prepared by your sales representative and/or lawyer and is a legal contract. See our post READY TO MAKE AN OFFER for more information.
- Closing the deal is exciting, but there’s still work to be done. There are closing costs associated that need to be paid by or on the closing date.
- Once the costs are approved the keys are yours!
There are many things to consider when buying your first home and many teams of people to help you. Be sure to talk to your sales representative about any questions you may have, and go to them prepared with what you are looking for.