Tips for first-time buyers

House

HouseWhen you decide to buy your first home, there is a lot to think about, Here are some good tips to make the process a whole lot better:

  1. Start saving now. The earlier you start saving, the more likely you are to get over that magic 20% threshold. Less than 20% down and, by law, you are required to get default insurance. Saving 20% can mean saving thousands and thousands of dollars in that insurance over the next several years.
  2. Don’t rush. You don’t need to put an offer on the first house you see. By starting your search when you want a house but don’t need one, you allow yourself to find a home that is actually right for you, instead of good enough.
  3. Save a little extra. You will be surprised at just how many things you will need for your new home. I remember moving in to my first home and realizing that I didn’t have any garbage cans. All of those little things add up, and having some extra money in the bank will take away the stress of getting them.
  4. Shop around for your mortgage. Take the time to find the right one. Whether that is working with your bank on different options, or working with a broker on different lenders, you want to find the mortgage that is right for you. Rushing into the process may result in a mortgage that isn’t quite best – and that will affect your bottom line for years to come.
  5. Get a home inspection. Ontario is a buyer-beware province – if a home inspector could have found an issue, the seller is not responsible, even if the buyer chose not to get a home inspection. It’s worth the money to make sure that everything is right in the house.
  6. Remember that this is an investment, too. It’s easy to say don’t get emotionally involved, but this is extremely hard to do. Perhaps bring a friend or family member along who can give a sober second thought to make sure you aren’t blindly overlooking something serious because of how much you love a feature of the home.
  7. Shop around for your insurance. Talk to a broker to make sure that you are getting the best coverage, and not just the best rate.
  8. Don’t buy new furniture right away. Give yourself at least a few weeks, if not a few months, living with your old stuff. You will be able to determine what your actual monthly expenses are and then figure out what you can afford.
  9. Figure out what you change, and what you can’t. Along those lines: what you can live with and what you can’t. Paint is easily changed; so is landscaping. Location, not so much, and a new roof costs far more than a new carpet. Know that before you buy and you will be much happier in the long run.
  10. Check your credit before you start looking. Paying down debts, avoiding new debts, and presenting your best financial self will help you to get the best possible mortgage, which will save you thousands.
  11. Don’t buy the maximum you can afford. Just because the bank wants to lend you money doesn’t mean you should borrow it. Life throws us curveballs once in a while, and if every penny is going to your mortgage, you won’t have money to repair the furnace when it stops working in the middle of January.

Buying a home is very exciting. Keep these tips in mind, and you will have smooth sailing.

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