Steps on Buying a New Home
For many, a home purchase can be one of the biggest decisions of your life. It is also a process that can be met with both stress and uncertainty. This is perfectly normal! Having a strong understanding of the buying process is important in navigating this uncertainty and remaining positive throughout. If you're planning to buy a home in the near future, I advise you to follow these simple Steps.
Save for a down payment. In Canada it is required to have 5% of the purchase price of a house under $500,000. For homes between $500,000 and $999,999, you need 5% for the first $500,000 of the purchase price and 10% for the amount above $500,000. For homes costing $1 million or more, the minimum down payment is 20%. It is important to know how much of a down payment you can afford before starting your home search, as this can determine what you are eligible to buy.
Build your credit score. Do you know your credit score? you need to monitor your credit score to ensure you qualify for the best possible rate. Some easy tips to improve your credit score are; Don’t open/close accounts, pay your bills on time, keep debt to income ratio <36%, keep current credit card balances low.
Determining where to buy. Determining where you want to buy is important in the home buying process. Some factors include, commute time, public transit, neighbourhood amenities, safety and school rankings tend to be top of mind for many hew homebuyers.
Getting Pre Approved. A pre-approval is a commitment from a mortgage provider to lend you a certain size mortgage at a particular rate. When you get pre-approved for a mortgage, you’ll find out the maximum amount you can afford to spend on a home, the monthly mortgage payment associated with your maximum purchase price and what your mortgage rate will be for your first mortgage term. Shopping around for the best rate is important, but it can also be stressful. Working with a mortgage broker can take that stress off your plate. They will take the guess work out and find you the best rate, since brokers have access to many lenders, they may offer a wider range of mortgage products to choose from.
Finding a good real estate agent. Connecting with a real estate agent that fits your needs and has a strong understanding of the market you're looking-in is crucial. This is especially important to first time home buyers.
Start looking at properties. This is where the fun begins! Remember to keep your search within your budget and where you can see yourself living. Your real estate agent will set you up a search to receive new listings that fit your criteria. It’s also a good idea to start a list of must haves and would be nice to have.
Making an offer. Once you’ve found the house that you want to make a home, it’s time to submit an offer. When it comes to deciding on offer details, including price and conditions, your real estate agent will help guide you through this process.
Although this whole process can seem intimidating and stressful, making sure you are prepared and knowledgeable will help. Your real estate agent and mortgage broker are there to support you. Trust the process, it will work out in the end. (Source: wowa.ca)
