05 Feb Advice For First Time Home Buyers
When you want to buy a house and don’t have any experience, then you need to keep reading our advice for first time home buyers. Buying a house is never an easy task, you need to think about so many things and organize them properly. But it also isn’t that difficult, if you take good advice from someone who with experience in this matter. Let us explore some topics for home buyers.
1. Pay Off All Debt
Owning a home is expensive, there is no denying that. Besides your monthly mortgage payment, you will have expenses like electricity and water that need to be taken into account. Owning a home can be much more expensive than renting you’re responsible for all the maintenance and upkeep costs.
2. How Much Can You Afford
The first thing you need to do is determine how much you can afford. You need to leave room in your budget for other things, so make sure your monthly housing costs are going to be no more than 30% of your monthly take-home pay.
3. Save a Down Payment
Buying a home with no mortgage is not something that most of us can do. In order to buy a house with a mortgage, a down payment will be required. Depending on your location you will need to save for a down payment of 20% or more.
4. Save for Closing Costs
Along with your down payment, you’ll also need to pay for closing costs. If you’re a first-time home buyer, you may be wondering how much it costs to close on a house. On average, closing costs are about 3–4% of the purchase price of your home. Closing costs include:
- Home inspection
- Credit report
- Homeowner’s insurance
5. Get Preapproved
Once you’re confident you have enough cash saved to pay for closing costs and 20% of your home, you’re ready to handle the other 80% by talking to a mortgage lender.
Most financial institutions have a pre-approval app on their websites so you can apply in minutes. Another option is to go to a mortgage broker, who will shop your mortgage around to get you the best rate available.
6. Find a Home
There are thousands of homes for sale in the area, go to rew.ca and you can look at all the homes in the criteria that you set. Once you have some that you would like to see, contact a real estate agent and they will arrange for you to be able to see them.
A real estate agent can also just take your criteria and then do the research for you and come back to you with a selection of homes for you to see and consider.
7. Pick A Location
Location is important. No one wants to live in an area or city that they are not happy with. According to studies, 78% of home buyers believe neighborhood quality is more important than the size of a home. And 57% of buyers would opt for a shorter commute over a larger yard. Also take into account things like crime rates, quality of schools, noise level and shopping in your area when picking an area you would like to live in.
8. Attend Open Houses
Open houses are a great way to see a home in the area you have chosen When you eventually do find a house you love, you’ll know how your place compares to better or worse homes in that neighborhood.
9. Make an Offer
If you have found a house in the area you have chosen and it is in your budget as well as it fits your needs, then it may be time to place an offer. That’s when you can rely on the expertise of your real estate agent.
Your agent will help you make sure your offer is competitive but also within your budget and the home’s value. Do not make an offer based on emotion.
10. Prepare for Closing
Once your offer is accepted, the closing process will begin. The length of the closing process can vary. Use the experience of your real estate agent to guide you through this period.
As your completion date nears, make sure that you have Home Insurance coverage ready to start on the day you take possession. You do not want something to happen that you can be financially protected from.