So you’ve decided to buy a house! Woohoo! Buying a home is big deal, in fact buying a home will likely be the single biggest purchase you’ll make in your entire life. Along with all the excitement that comes from this milestone occasion, there will inevitably be some nervousness in what to expect and how to make the best decisions throughout the entire process. Questions such as what you can afford and different payment options are ones that will cause anyone’s head to spin, but are completely necessary when you’re buying a new home. If you’re a first time home buyer, here are a few useful tips to make your home buying experience go a lot smoother.
1. Determine what you can afford
Before you really begin your house hunting journey, the first thing you should do is take a step back and review exactly what you can afford. Ideally everyone wants to be able to find their dream home and move in and live happily ever after, but realistically that dream home may not be in your budget right now. Things that you should look over include your down payment options, current debt, your approximate monthly housing-related costs, closing costs, household income (especially if you’re not the only one purchasing the home) and of course your monthly non-housing related expenditures (like a pair of shoes or six, because we know those add up!) Consult a mortgage professional – that’s what they’re there for! A mortgage calculator may also help!
2. Create your wish list
Some people have an exact image of what they would like their home to be like, while others need to shop several showhomes to get a better idea. Regardless of which category you find yourself in, almost everyone has an idea of certain things they need in their home in order for them to purchase it. Again, depending on your budget, certain things may not be realistic to demand in your home and you need to determine just what features are need-to-have and which are nice-to-have (like 3 bedrooms vs a getting ready/makeup room..which would be awesome, but unnecessary..I guess.)
3. Establish a down payment amount
There are several down payment options when purchasing a home which should be considered beforehand. Figure out what amount you’d be able to afford and more importantly what you’re comfortable with paying. The best thing to do is to understand the options that are available to you.
4. Get a pre-approval for your mortgage and understand your mortgage options
If you’re unsure of how much you qualify for, talk to a mortgage specialist who will be able to determine whether you pre-qualify. Once that is done, understanding all the options of different mortgage solutions is critical. More than simply just about the interest rates, the type of mortgage (fixed or variable), terms and flexibility are all just as important and combined will have a major impact on the overall cost of owning your home. While we recommend a mortgage professional, you should also do your own research. That’s what Google is for!
5. Anticipate unforeseen expenses
The cost of buying a home is not simply just the cost of the home itself. Items such as lawyer fees, land transfer taxes and moving costs need to be considered as well. And even after you move in, property tax, insurance, condo fees (if applicable), heating, electricity, water, internet, and even food, cleaning supplies and basic everyday necessities are all part of the overall costs of buying a new home. And we haven’t even discussed décor! It is important to consider all these additional costs that go beyond the cost of your home and budget accordingly, if only to save yourself from the impending heart attack once you realize all the extra costs that you didn’t know about! So plan your budget – I’m sure there’s an app for that =)
