First Time Home Buyers
Are you considering taking the leap into the realm of home ownership?
While it can be a daunting thought, if you have the resources to buy a home then we are here to help you. This is most likely one of the biggest financial decisions of your life, so in order to have the best experience you should know some key information! With the help of my team and I buying a home for the first time will be less complicated and you can trust our knowledge and expertise to make sure that you are looked after every step of the way.
Here are some of my TOP TIPS for those who are thinking of buying a home:
Knowing that you’re ready: Before you even look at homes online or in the newspaper, make sure that you have the ability to buy a home. Check your finances, your credit score and budget accordingly. Ask your real estate professional or your representative at your bank to check over you financial situation to determine whether or not you’re ready. If you aren’t or if you feel like you aren’t, start saving what you can. Even if you choose to buy a home, you’re going to have to cut your spending considerably.
Know how much you’re going to spend before you look: After you have found out that you’re ready to buy a home, it’s time to budget yourself. Determine how much you’re willing to spend to purchase a new home, as well as for down-payments – something that usually gets left until the last minute.
Finding the right real estate representative: If you haven’t already, you should acquire the assistance of a real estate professional. As a first-time buyer, you should never go solo when buying a home. A real estate professional can give you advice on what home is best for you, as well help you search for the most fitting home for your needs.
Knowing what you need: Once you acquire the assistance of a REALTOR® or agent, start looking for a home that suits your needs. If you’re thinking for the future, take that into account when deciding which home is best for you. But don’t be over the top—be realistic when searching for that first home.
Getting a home appraised and inspected: To receive a quality mortgage, homeowners will need to hire an appraiser. An appraiser values your home based on the surrounding market and the condition of the home. Finding a reputable appraiser is crucial because an overvaluation can be detrimental to your economic health. An inspector is someone who comes in to check out the physical condition of your home. Hiring an inspector will let you know if you have to spend extra money on renovations or construction. Do this before you close on the deal – you don’t want to spend considerable money after you’ve bought the home.
Understanding your options for mortgages: Do a bunch of research before you choose a mortgage. Go to various lenders and understand their rates and policies. You could also ask your real estate agent for some help or hire a mortgage broker. There are different options, so find the one that suits you.
Getting a Lawyer/Notary: Before you make a deal, have a lawyer or a notary read over the financial documents. This is to ensure that you’re not getting into a deal that looks shaky or fraudulent. The lawyer or notary has to be a real estate specialist.
Don’t forget about those closing costs: After purchasing a home, you may be faced with “extra charges”. Understand the various fees that you’ll have to pay before the close of the sale so you could save accordingly. These fees can include legal costs, land transfer taxes, disbursements and many others. See below for more details so that you can be fully prepared to buy your first home!
Buying a home should be an exciting period for you, and while it can sometimes seem complicated at first, with the help of a real estate professional on your side,you’ll find the home that's right for you!
So if you decide that buying is the right decision for you then call me today to discuss how my team and I can serve you.
When it comes to buying a home there are the obvious costs, such as saving up the deposit. However, it is important to factor in all the other costs that are also involved to avoid ending up with an unexpected bill!
- Deposit - You might need to put down a deposit; the amount depends on your area, the purchase price of the home, and your situation. If a deposit is required, it will be held in trust and will be deducted from your total purchase price and is considered part of your down payment.
- Down payment - Generally speaking, the larger a down payment you're able to make, the better, because that means you'll have to borrow less. But you also don't want to leave yourself so cash-poor you can't cover all of the other costs that come with closing a sale. The minimum amount you can put down is 5% of the purchase price, assuming that you have made an offer to purchase and all conditions have been met.
- Mortgage loan insurance - If your down payment is less than 20% of the purchase price of your home, you are required to have mortgage loan insurance. It protects your lender not you in case you default on your mortgage. This is called a CMHC fee - click here to find out more about it! I always recommend talking with a specialist mortgage advisor to work out what your best option is!
- Land transfer tax - Ontario uses a tiered Land Transfer Tax system. In the tiered systems, the rate varies depending on the purchase price of the house. As a first time buyer you may be eligible to not pay this tax - ask your lawyer for more information.
- Appraisal fee - Your mortgage lender will likely require an appraisal, it prevents you from borrowing more than a property is actually worth. Some mortgage companies may ask you to pay upfront for the appraisal, and if you proceed with your purchase then they'll refund this money to you after closing.
- Home inspection - Don't even think about buying a home without first having a proper inspection done. In fact, your lender may insist on one to verify the condition of the home. On average an inspection costs between $300-$500, depending on the type of property and the type of inspection that you are doing.
- Property insurance - Your mortgage lender will require you to have property insurance in place on closing day, since the property is actually the security against the loan amount.
- Mortgage life insurance - Mortgage life insurance protects you in the event something happens to you. Obtaining life insurance or term insurance instead of mortgage life insurance can often be more beneficial.
- Legal fees - Legal fees for buying real estate range in price and must be paid upon closing. When purchasing brand new condos, since such deals can involve more paperwork, the cost might be higher. Be sure to find a lawyer who specializes in real estate!
- Title Insurance - Insures you against any defects of title to the property. For example, if the previous owners undertook major renovations without proper permitting, you would be protected against any costs required to bring the house up to code. Typically, this one-time premium costs less than $500.
- Moving expenses and services connections - The final cost is of course moving expenses and connection fees or deposits for services, such as phone, electricity, and other utilities. Moving expenses vary widely, depending on your personal circumstances and possessions. Your lawyer should normally discuss with you setting up services at your new home.
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