Top five considerations for first time home buyers

July 30th, 2019First time homebuyers

Top five considerations for first time home buyers

Here are some important considerations for first time home buyers.

 

Five considerations for first time home buyers

 

Create a budget and stick to it as best as possible

 

Although a bank may approve you for more then your desires, a budget will help you find out what is truly the right purchase price and mortgage payment for your needs. 

Also, home hunting for the first time can be quite exciting and with a budget in place it will help you not get carried away with a larger house or upgrades that are not within your means at this time.  

A budget can also reduce stress by having you better prepared for the upcoming costs.  

 

Get an in-depth pre approval from a mortgage broker in Ottawa

 

With online pre approvals and bank pre qualifications becoming more popular, sometimes a client may be under the impression that they are approved for a purchase, only to find out after an offer has been made, that there are conditions they cannot meet.  An in-depth pre approval should include income confirmation. 

There are different documents required for different types of income such as for:

  • if you are on probation
  • hourly employment
  • contract employment
  • self employed
  • pension income
  • support payments
  • child tax benefits

With this, being pre qualified based on just the income amount may not be enough for an in-depth pre approval.  

 

Choosing the right real estate agent for your needs

 

Your realtor should be someone you can relate to, trust and openly talk to about your needs.  They should take the time to educate you throughout the home buying process and on the real estate market in your search area.  

Real estate agents can assist with arranging times to view homes, preparing the purchase agreement, reviewing the condo status certificate with you and your lawyer, arranging a home inspection and updating you on an important information that is going on in the area you are looking in. 

 

Making sure, if applicable, that there are conditions in your offer

 

Making an offer conditional upon a home inspection and mortgage financing is not only standard practice, it is a great way to protect yourself incase unforeseen challenges arise in obtaining financing or with the home itself. 

As many lenders will only do a basic scan of your application at time of pre approval review, the financing condition will give the lender time to do a complete review, an appraisal if needed, as well as the mortgage insurer review, if applicable.  

Mortgage insurers (i.e. CMHC) will only review an application once an offer has been made and can override a lender’s decision.  

 

Knowing your closing costs

 

It is standing practice for a lender to confirm that you have 1.5% of your purchase price saved for closing costs.   However your actual closing costs can vary from this number.  With that, it’s important for first time home buyers to be prepared for these costs in order to avoid surprises on your closing date.  

Closing costs can include, for example:

  • legal fees
  • land transfer tax
  • moving costs
  • utility hook up
  • pre paid property tax
  • fire insurance
  • tax on mortgage insurer fees

 

Contact me anytime to learn more about important considerations for first time home buyers.