The decision to purchase your first home is one of the largest you’re likely to ever make, both from an emotional and financial perspective. It is important to find balance between the excitement of becoming a new homeowner, and being practical about your needs.
As a first-time buyer, this process can be quite overwhelming, and you can be prone to mistakes that seasoned real estate buyers know to steer clear of.
To help you through, here are some helpful tips for navigating the first-time home buying experience.
Do Your Due Diligence
It is vital to do your research on home buying and the housing market before you begin looking for your first home. There are a variety of factors to consider before you kick off your search, such as the kind of home you prefer, and the neighbourhoods you are open to looking at.
It is also very important to be informed about different aspects of the overall process. For example, make sure to do your own inspection of the home before you purchase it; arranging for a home inspection prior to purchasing the home can give you the chance to request that any issues be fixed before you move in. While it may be tempting, avoid skipping the inspection in order to make the terms of your offer more enticing for the seller, as this can end up costing you a lot of money down the road.
Understanding Your Financial Picture
From a financial perspective, it is important that you have enough money saved for a down payment before looking at listings. While 20% is a standard amount to save before looking to make a purchase, you can make a smaller down payment. However, keep in mind that you will also need to purchase mortgage insurance for down payments below a certain threshold, normally a down payment under 20%.
For most buyers, truly understanding their financial picture involves becoming more aware of how mortgages work. It is important to understand the different kinds of mortgages and loans that are available, for example learning the difference between a fixed and a variable rate mortgage and which option works best for you. Another reason why getting more familiar with mortgages is necessary is that the mortgage amount that you qualify for can help you to determine your limits when it comes to purchasing a home. While online mortgage calculators may be able to give you are rough estimate, it is highly beneficial to get a pre-approval. However, do not base your budget solely on this number; it is important to make sure that any expenses and debts you may have are considered while still leaving a bit of wiggle room for savings.
Additional costs that some first-time buyers may not consider are closing and moving costs. Be sure to leave enough room in your budget so that you are able to cover these costs without setting yourself back too far.
Having competent and trustworthy representation on your house hunt is crucial – be sure to hire a knowledgeable real estate agent to provide insight, guidance, and expertise throughout the process. Not only will they help you find homes that fit your desired criteria and neighborhood, they will also help you formulate an effective offer, and even negotiate with the seller to get the best deal.
As well, be mindful about signing any contracts before taking enough time to look it over. Having your own real estate lawyer is a must-have, they can help to advise on any issues that may arise with the contract. Buying a home is a large commitment that should only be made when you decide that you are ready. However, be prepared to make an offer relatively quickly if you are interested in a property in what would be considered a hot market, like the Toronto real estate market in Canada.
There are so many different components that go into the home buying process, which can make it challenging for first timers. Most importantly, first time buyers should not be afraid to ask for assistance from their realtor, friends or family. For financial assistance buyers can check out the U.S. Department of Housing and Urban Development website for home buying programs in your state. While the process may be tasking, owning your own home makes it well worth it.
Zoocasa is a full-service brokerage that offers advanced online search tools to empower Canadians with the data and expertise they need to make more successful real estate decisions. View real estate listings at zoocasa.com or download our free iOS app.