Buying a home is one of the biggest purchases in your life which only explains why there are so many uncertainties surrounding the process. We’re hoping this blog post will give you a little bit of a head start when it comes to preparing for the home buying process.
In Canada, the minimum amount of money you can put down on a house is 5%. Depending on the price range you're looking in, you can easily calculate how much you would need to save for a down payment. Obviously the more money you put down the better but at minimum, you have to have 5%. Example: If a home is listed for $280,000, a 5% down payment would be $14,000.
It’s also important to note that when you purchase a home, there are also other fees to consider (ie. legal fees, inspection costs) It’s always a good idea to save $2-5k on top of your down payment to cover these.
Get a Pre-Approval
A pre-approval is a written approval from your mortgage lender or mortgage banker that states how much money they are willing to give you to purchase a home. This amount is based on a variety of factors including your income and down payment amount. Don’t be afraid to shop around either to see who can give you the best rate. Sometimes going with the same person your parents did isn’t the best solution for you.
Once you’ve gotten the pre-approval, you can now start looking at homes at that price or lower.
Find a Real Estate Agent
A lot of times, first time home buyers go out and start looking at homes on their own. There’s no problem with this but we’ve also noticed that these home buyers are underestimating the value of working with an agent. Our role as the agent is to inform you on market conditions, provide you with daily updates for homes that are in your price range, go to the viewings with you to help point out any potential pitfalls and of course, to draw up your offer letter. When you’re just starting out, it’s important to miss some of these important first steps but if you work with an agent, they will be there to guide you through it.
Take Advantage of First Time Home Buyer Incentives
Oftentimes the government will offer first time home buyers some incentives to help pay for their down payment or other fees. Take a look at the resource here that will let you know if you’re eligible.
Save, Save, Save!
Having money for a down payment and your monthly mortgage payment isn’t enough. Home buying is a huge undertaking (but still an enjoyable one!) and you need to make sure you are prepared to have money put aside for repairs, bills and other unexpected expenses. Plus, in a market like the one we’re in right now, having more money put aside and an even bigger down payment makes you more competitive.
We know how hard and stressful the process of buying a home can be but that’s why we’re here to help. Give us a call today and we’d be happy to answer any questions you may have. Let us try and help make this process easier and more enjoyable for you!
Chuck Roy, Broker | 226-344-5482
Shantal Johnson, Sales Representative | 226-344-5485
