1. Start your journey with a realtor:
An experienced realtor can help you navigate the trials and tribulations of finding your first home. Make sure your realtor is someone you trust who is well informed, experienced and has a good track record for matching clients with homes that they love. Your realtor will be an invaluable asset to you as you begin to tackle difficult questions likes price range, neighbourhood and school district.
2. Apply for a pre-approved mortgage:
Pre-approved mortgages are usually good for 90 days and will give you a clear understanding of your maximum mortgage amount and interest rate. Armed with this information, you should easily be able to set your budget before embarking on your house hunt.
3. Borrow from your RRSP under the Home Buyers’ Plan:
The federal government’s Home Buyers’ Plan allow first time buyers to increase their down payment by borrowing up to $20,000 of RRSP. The loan is tax free and you’ll have 15 years to pay it back.
4. Prepare for closing fees and extra costs:
Consider putting 4% of the price of your home aside for closing costs, such as land transfer taxes. Also avoid taking out loans to pay for furniture. If you can’t afford it, don’t buy it and consider used furniture from places like Craigslist instead.
5. Buy the home you can afford:
Five per cent is your minimum down payment but putting more down can drastically reduce costs. A small down payment leaves little equity in your home and if your down payment is less than 20 per cent, mortgage loan insurance is often required, which leads to additional costs and higher interest rates.
6. Avoid hidden costs with a home inspection.
Getting your home checked out prior to committing can save you costly repair in the future. The average cost for a house inspection is $350 (cost varies by home size) which is a small investment to make in a place you’ll call home.
- Posted by Alanna
- On October 31, 2015
- 0 Comments