This blog was written by our guest blogger, Jared!
Are you thinking of buying your first home? It’s a big move that can also feel a bit nerve-wracking. How much should you borrow? How do you go about finding the right property? And what happens once you buy it? All the answers are right here for you! So read on, and learn everything you need to know about buying your first home.
- Consider the down payment. The price at which you agree to purchase the house determines the minimal down payment. For properties costing $500,000 or less, the lowest down payment that can be paid in Canada is 5%. Saving for a down payment is the most difficult obstacle for first-time homebuyers. With that being said, a savings strategy is essential. A savings plan might assist you in determining a target down payment amount. This is significant since a greater down payment reduces the amount of money you'll need to borrow to buy a property. From this, they determine the monthly mortgage payments.
- Get Pre-Approved. The first thing you should do once you've saved enough for your desired down payment is to acquire a mortgage pre-approval. Before calling your trusted realtor, contact your mortgage broker or your bank's mortgage specialist.
- Can you afford the home? It is critical to be honest about the types of properties we can afford. The total amount you can borrow is determined by your household income, personal monthly expenses, and residential charges such as property taxes, condo fees, and heating and electricity bills.
- Do not be stagnant. Do not stop in one place when looking for mortgage approval. Sometimes your bank is convenient, however, they aren’t always going to give you the best deal. Do your own research to determine which company is going to give you the best rates with your mortgage, never settle on the first option. A little difference in rates can really go a long way, especially in payments and interest.
- Use first-time homebuyer programs. Get to know the many programs that relate to your position. Whether it's a refund or a tax-efficient strategy to fund your down payment, there's something for you.
- Never stop saving. Your down payment and monthly mortgage payments are only the start of your home-buying venture. Closing fees, land transfer tax, and Canada Mortgage and Housing Corporation (CMHC) insurance are just a few of the extra costs that come with buying your first home. That's why, even after you've saved enough for your down payment, you'll need to stick to a savings strategy.
Buying a home is a very tiresome, but exciting, adventure. You must be mindful of all that comes with the big purchase and investment. Researching and having knowledge of the task that’s in front of you will only be beneficial in the long run, saving you hundreds, if not thousands, of dollars.