Monday, December 19, 2022 / by Rebecca Wilson
Buying a home can be a stressful process. This is exceptionally true for first-time home buyers. If you are in the market for a property, here is what you need to do before you start shopping...
Determine a Budget
Knowing your budget involves more than just knowing how much you want to spend on a home, or on a mortgage payment. There are also additional costs and factors you may need to consider, such as:
Home Inspection Cost - when purchasing a home, you may want to have the home inspected prior to finalizing the sale. A home inspector can cost on average $300-$500, you will need to have these funds available.
Home Insurance - If you do not already own a home, then having a home insurance payment every month may be an additional cost you have not accounted for.
Legal Costs - In order to close on your new home, you will require a lawyer to complete the transaction. Fees for a lawyer to perform this task can range from $900-$2000.
Land Transfer Tax - If you are not a first time home buyer and you are purchasing a home, there is a tax that is calculated as a percentage of property value. To determine what the cost of Land Transfer Tax may be for you, you can use this calculator. https://www.ratehub.ca/land-transfer-tax.
Mortgage Insurance - When your down payment on a home is less than 20% of the purchase price, you will require mortgage insurance. This is an additional cost that will be rolled into your total mortgage amount.
Down Payment Amount - This is the amount of funds you will require to have available when the home closes. You will have to decide the percent of the purchase price you are putting as a down payment, which will determine if you require mortgage insurance or not.
Deposit Amount- The deposit is part of your down payment. This is the amount that you will have to put down immediately after you have signed a contract in order to secure your new home. Before you start shopping, make sure that you have the funds needed for the deposit available to avoid any hiccups.
Maintenance, Repair or Renovation Costs - Once you have purchased a home, there may be things that you want to do once you move in. It is important to include the cost of these projects in your budget.
Moving Costs - Moving can be costly, whether you need to hire movers or you are looking to buy furnishings for your new home, these costs also need to be accounted for.
Having a difficult time really figuring out what your budget truly is? Sometimes you need to enlist the help of a skilled mortgage agent so that they can help you to determine your budget.
Getting pre-approved for a mortgage is extremely important in the home buying process. Here's why...
It allows you to know exactly what you are approved for. This way you are able to put an offer on a home with confidence and not worry that you won't be able to afford it in the end.
It provides your Realtor with the information they require to show you homes in the appropriate price range to fit your budget.
It shows sellers that you are a serious buyer with financial backing.
Work with a trusted Real Estate Agent
A professional Real Estate Agent knows the market. They are able to give you advice and guidance when it comes to market value (which is often not the same as the asking price), red flags that may be costly to fix, and provide you with support by answering any questions you may have along the way.
Professional agents may also have access to properties that have not yet come to market, giving you the exclusive opportunity to purchase a home without having to be in competition with any other home buyers.
These Realtors are skilled negotiators and will ensure that you are not over paying for a property and that your best financial interests are taken care of.
Agents who have teams behind them can also offer additional customer service, take care of paperwork, both before and after purchasing a home, and give you all the support you need throughout the process.