Getting ready to buy your first home is an exciting time! It can also be a stressful time. In order to help avoid some of the stresses that accompany this venture, here are a few ‘top tips’:
NUMBER ONE MISTAKE: Not getting pre-approved for financing before you begin your search.
True, online financial calculators are a great way to get an idea of how much you can afford – but you won’t know for sure that you can even get a mortgage until you talk to a lender.
Getting pre-approved involves a bank or mortgage broker going through all the steps of qualifying you and committing to an interest rate for a certain period of time (usually 90 days).
Better to know now that the Bell bill you didn’t pay in first year university is still haunting you, or that the bank doesn’t love the idea that you just started a new job. Knowledge is power.
Not having a readily-available deposit when the time comes to make an offer. So you’ve fallen in love, made an offer and it’s been accepted – you’ll need to come up with a deposit within 24 hours. If your money is in an RRSP, you won’t likely be able to access it that quickly.
If your money is in an investment that’s had a bad week, you may be forced to sell at a loss. Better plan: make sure 5% of your budget is available in cash.
Not taking advantage of the government programs for first-time Buyers. There are literally thousands of dollars up for grabs for first-time Buyers, from rebates on land transfer taxes, to tax credits to help with closing costs.
Not saving a big enough down payment. The more financial flexibility you have, the better.