- Ralph Waldo Emerson
Once bit with the ‘home buying bug’ it’s always a good idea to get important finances in order. Make sure bills are paid on time, all the time. If possible, pay off credit cards, loans and bills at least six months prior to applying for a mortgage, to give your credit a boost.
This would be a good time to run a personal credit report to see what the bank will be looking at when your application comes across their desk. A credit score of 600 or higher is generally required to be approved, so do everything possible to ensure this score. It will also bring to your attention any discrepancies in your report- which you could clear up ahead of time.
Review your finances to see how much money is available for a down payment. Remember, banks want to see at least 5% down, so figure out how much money will be needed for your dream home. See below for a reference:
Before proceeding with a home purchase, you should calculate every cost to ensure you can afford to maintain a lifestyle you can live with- keeping in mind that owning a home comes with more than just mortgage costs.
Make a reasonable budget and figure what will be paid out each month. It is best to know ahead of time if there will be any room for savings or luxuries- and be prepared to adjust your lifestyle or expectations, if needed.
A budgeting worksheet is provided in our First Time Homebuyers Package.
To receive your complimentary copy, contact Krista or Lindsay today!
Too many first time home buyers make the mistake of choosing their home based on the mortgage amount they were approved for.
Remember that interest rates are never permanent. Economics are cyclical and will forever evolve. In the last 10 years, rates have been declining and have remained low. But a quick search online will show that in the 1980’s and early 1990’s, rates were as high as 21% (!!) Although it seems unlikely the market will get back to that level, it’s always possible. Do not depend on your current interest rate being held forever. Budget for increases and you will never be caught short.
Consider actual needs versus wants. A couple without children do not necessarily need a home with four bedrooms and three bathrooms, even if they can afford it. Make a list of needs and a list of wants and aim to fulfill ‘needs’ first. Any ‘wants’ that are met should be considered a bonus.
Buying a home requires the services of real estate professionals: lawyers, mortgage professionals, home inspectors, Realtors and so on. To be prepared to purchase a home, it is recommended that these individuals be ready to act on your behalf ahead of time. It will also ensure there is an expert available to answer the many questions that pop up along the home buying process.
It's time to activate the search!
By now, you should have sat down with your Realtor and worked together to determine the best home for you. The market conditions should also be discussed, as it’s always best to know whether the market is a buyers or sellers market, to understand how urgently action will be required. Then, using your criteria, a search will be conducted and any suitable properties will be sent your way.
If any of the available properties appear interesting, we can make appointments to view them. This is an opportunity to walk through the home and evaluate whether or not an offer should be made. A good Realtor will encourage shopping around, so that the buyer knows their options and enters into a purchase agreement with their eyes wide open.
Throughout this process, it’s a good idea to conduct a search using MLS.ca. Sending us listings of interest help further clarify what criteria to search with.
Once the perfect home has been found, an Agreement of Purchase and Sale will be prepared and presented to the sellers. This will be completed on your behalf, with the best possible terms and conditions.
The offer will outline the important details behind the sale such as buyer and seller names, purchase price, deposit amount, closing date, inclusions and exclusions and conditions of the sale.
Not every offer is accepted on the first round. Sometimes it's necessary to conduct negotiations between the two parties, to come to a fair agreement. Most commonly, price is the negotiated point, but often details such as closing date and inclusions are discussed.
With more than three thousand transactions under his belt, Lindsay is one of Milton's
Before moving day, the utility, cable and rental companies should be informed that a new owner will be taking over the property. Some will require a deposit- so make sure this has been budgeted!
Closing day can be very exciting! This is the day that the buyer takes possession of the property.
The buyers’ lawyer will forward the purchase funds to the sellers’ lawyer. Once the monies are cleared, the sellers’ lawyer will forward the keys to the buyers’ lawyer, who will pass them along to the buyer. This may not happen until as late as six o’clock on closing day.
It is not recommended to secure the services of movers for the actual closing day, just in case of an unexpected delay.
Now that the house is in your possession, a few upgrades or maintenance may be required. If possible, upgrades should be completed as soon as possible- to ensure you can enjoy them.
Maintenance is always necessary and will be needed throughout the entire life of any home.
A qualified home inspector should tell buyers what upgrades or maintenance are necessary. This is the opportunity to understand whether the ducts have been cleaned and the insulation sufficient. Use the home inspector report as a guide for what needs to be done.
A home is a major investment and should be maintained in top condition to retain value.
Buyer's Home Search
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