There’s Nothing Like Buying Your First Home
Are you a first-time home buyer in Canada? If so, you are probably feeling very excited and completely overwhelmed. Don’t worry, we’ll walk you through the entire process!
If you’re buying your first home, you are probably feeling a lot of emotions right now like excitement, stress, joy and fear. That’s to be expected.
We’ve worked with many first-time home buyers and we’ve learned the best way to help them make the right decisions (and not have panic attacks) is to educate them on the entire process of buying a home.
While we can’t cover the entire process here, we’ll outline the first steps you’ll need to take to buy your dream home.
Step 1. Determine Your Budget
To buy a house you need to have a firm grasp on your finances to know exactly what you can afford. To come up with a realistic figure you’ll need to determine a few things:
- Your monthly income (this includes the income of any co-buyers)
- Your total monthly expenses and debts
- Your amount of savings
You’ll need to subtract your monthly expenses and debt from your total monthly income. The figure you arrive at is your actual monthly income. This number is your real starting point, and most financial experts agree you should not spend more than 30% of this income on housing.
You’ll also need to keep in mind you will have additional costs with your mortgage payment such as property taxes, homeowners’ insurance, utilities, and maintenance and repairs.
Step 2: Come Up with a Down Payment
Most home purchases require a down payment of normally 3% to 20% of the purchase price. How much you are required to put down will depend on the type of mortgage loan you select.
There are also some loan products, such as a VA loan or USDA loan, that may not require any down payment.
Your absolute best bet is to sit down with a mortgage broker who will be able to look at your financial life and tell you the types of loans you are eligible for and make the most sense. If you need help finding a mortgage broker, we would be happy to connect you with a few.
Step 3: Gather Your Necessary Paperwork
Here is something you need to understand… when you find your dream home and fall head over heels in love, you’ll want to be able to move quickly to make an offer. You’ll also want to be seen as the MOST attractive buyer. To do this, you’ll need to gather all of the paperwork required by your lender (taxes, bank info, etc.) and get preapproved. Not prequalified. Prequalification means a lender will give you a vague idea of the amount they are willing to lend you. Preapproved means you have already been underwritten and the lender has committed to giving you the home loan.
You should absolutely complete these first three steps before you even begin to look at houses. But when you’re ready to look, get in touch with us.
We Make Buying a Home Simple
If you’re a first-time home buyer in Canada, don’t worry, we’ve helped countless first-time home buyers through the process. We’ll take you by the hand and guide you step-by-step along the journey until the day we hand you those keys.
Buying your first home ma
Have any questions? A lot of new first-time home buyers want to know about:
- First-time home buyer Ontario rules
- First-time home buyer incentives in Ontario
- First-time home buyer incentives in 2020
You may also feel free to check out our first-time home buyer incentive calculator.
If you have questions about anything at all, simply get in touch with us. We love helping home buyers understand the exciting and complex journey they’re on.