When you’re ready to purchase a new home, there are plenty of factors you need to consider before you head out on the hunt. Questions like, “Will I need another bedroom once I start a family? And how much can I afford if we get in a pricing bid with another buyer?” are just some of the thoughts that are important to consider. So, before you step out the door to your first open house, read our 6 things to consider before buying a new home.
Rental Income or Not
Before you start looking for a new home, it’s vital to determine the type of home you need to suit all your lifestyle requirements. For instance, if you want to have a space you can rent out to make some supplementary income, then you probably won’t want to move into a one-bedroom condo. Write out your wants and needs now and 5 years into the future to figure out the space you require so you can start your house shopping on the right foot.
Pricing and Trends
Next, you should research all the markets in which you would like to live in. Check the comparable sales, neighbourhood amenities, statistics on the future growth and development, and any available information you can find on the pricing trends. Then shortlist a few neighbourhoods that are best suited for your current and future needs, along with their average prices.
How Much You Can Afford
Once you understand the average pricing and trends, you should determine how much you can afford and if you have enough for a down payment saved. Tools such as an affordability calculator can help, but getting a pre-approved mortgage is your best way to find out the price range you qualify for and the mortgage options available to you.
To Go Alone or With a Realtor
One of the biggest questions you face is whether to go alone or with a realtor. If you don’t have prior real estate experience, it’s highly recommended that you seek the expertise of a realtor. They can help you understand all the legal terms in the agreements and negotiate on your behalf to get you the best pricing.
Give or Take on Offers
You also need to know how much pricing room you have to work with in case of a bidding war. A pre-approval will give you an estimate of your affordability but if you place an offer at the full amount you may not have any leeway you need to re-negotiate.
Potential Closing Costs
Going hand-in-hand with the last point, you also need to have money available for your pre-closing, closing, and after closing costs. A professional can help you calculate all the required payments so you don’t get blindsided by the hidden costs that your mortgage cannot completely cover.
Buying a new home has many moving parts, and if it’s your first time, it can be very overwhelming, especially when trying to choose a mortgage that is right for you. That’s where we come in. At Financial Forum, we can help you learn what your options are to get you the best mortgage for your needs.