If you’re thinking of buying your first home, these five tips will help you enter the market with confidence.
1. Test-drive life as a homeowner
Taking on a mortgage for the first time can seem like a big commitment and you may be unsure of how it will feel. Will you need to make sacrifices in other areas of your life? To find out, “try before you buy.” Here’s how. Suppose you figure out that the kind of home you want is likely to cost you $1,500 a month. currently, your monthly rent is $900. Every month, pay your rent, then set aside an additional $600 into a savings account. Try it for six months to make sure you’re comfortable with the financial commitment.
2. Save automatically for your down payment
Instead of setting aside that $600 manually every month, make it automatic, with a pre-authorized transfer from your chequing account to your savings account.
3. Pre-arrange financing
Before you start visiting homes for sale, you’ll need to find out how much financing you qualify for. With a pre-arranged mortgage, you’ll be able to shop with confidence knowing the mortgage amount you can afford. In addition, your fixed interest rate will be locked in for up to 90 days for the term selected, provided you complete the purchase of your home and the mortgage funds are advanced within that time.
4. Assemble your team
Buying a home is a team activity. You’re likely to need input from other experts like a real estate agent, lawyer, and home inspector. Start shopping around now to find professionals you’re comfortable working with.
5. Be ready when you find the right home
When you find a home you really like, you’ll want to be able to make an offer right away. A sizeable deposit, in the form of a certified cheque for $5,000 or $10,000, will give your offer more weight and show that you’re a serious buyer. Make sure you have that cash ready to go, so you’re not caught scrambling and moving money around while someone else sneaks in an offer ahead of you.