Buying your first home is one of the biggest events you’ll experience in your lifetime. It’s filled with excitement, anticipation, and copious amounts of fear and anxiety. But with the right advice, you can cut your stress down by being prepared, in the know, and ready for such a big venture. To get you started, here are 7 tips all first-time home buyers should know.
Learn About The New Qualification Rules
Canada has recently changed the qualification rates for mortgage approval. Before you start to shop for houses, make sure you can qualify by talking to a mortgage advisor.
Know exactly how much you will be able to afford for your down payment and what the rate and payment plan will look like. This step is probably the most essential one for first-time home buyers to ensure you get your dream home.
Consider Using the Home Buyers Program
If you qualify, you can use the Home Buyers Program to withdraw up to $25,000 from your RRSP to help fund your down payment. You will be required to pay back the amount within 15 years, with yearly deposits back to your RRSP, but it is one of the easiest ways to boost up your down payment and avoid mortgage insurance rates.
Know the Closing Costs
Talk to a mortgage advisor who can help you better understand and estimate your overall closing costs. Without knowing these costs in advance, you could end up with unexpected costs that put you in debt.
Have a Repair Fund
It’s rare that someone moves into a house and doesn’t fix or upgrade a thing. Make sure you have enough money put aside for a repair fund for when you move in. This will help you cover initial painting, unexpected repairs, and any minor touch ups to make the home uniquely yours.
Plan for Renovations and Maintenance
Similar to a repair fund, you’ll want to set aside a little money each month to save for renovations and maintenance. Your roof, landscaping, driveway, and façade will all need work over the duration of ownership. Plus, you may need to replace some of the big-ticket appliances at one point. Having the money saved already will help relieve the impact on your bank account when the time comes.
Review your Mortgage Plan Yearly
Every year you should review your mortgage and determine if you can pay it back sooner, if you should consider re-financing, or if you should renew or find a new lender at expiry. Researching the current rates and trends each year can help you to make better financial decisions come renewal time.
Being prepared can help you better navigate through all the nuances of purchasing a home. As it will be your first time, talking to a qualified and experienced mortgage professional is always a smart move for first-time home buyers. They can help you better understand the system and find you the best options given your specific financial situation.
Ready to experience buying your first home? Contact us today to get started!