Becoming a first-time homebuyer, while exciting, can be a bit daunting. Buying a home is a big commitment and is something that requires careful planning and consideration. The best thing you can do to calm the first-time home buying anxieties is to be as prepared as you can before you make any decisions. Plenty of research and budgeting is key when starting the process of buying your first home. Here’s what first-time homebuyers need to know!
Related: The Great Adventure of Building a New Home
1. First-Time Homebuyer Mortgages & Down Payments
One of the first steps in the process of buying a new home is making sure you can afford all that comes with homeownership. Most people begin by getting prequalified for a mortgage, this will give the buyer an idea of how much they’ll be able to afford and how big of a down payment they can put down.
The mortgage is just one of the many expenses that you’ll need to consider before becoming a first-time homebuyer. You need to factor in property taxes, interest payments, insurance, and any potential maintenance and repairs your home might require.
A mortgage is dependent on the buyer’s lifestyle, assets, income, and debt. When getting approved for a mortgage, make sure you take into consideration any credit card, student loans, car payments, or other major debts you may have. You need to be sure you can handle a mortgage payment on top of all your other expenses.
The down payment you put down can be anywhere from 5-20 percent of the cost of the house. If you find that you’re struggling to come up with a down payment, maybe now isn’t the right time for you to become a homeowner. However, there are many options for this sizable amount of money and many mortgage lenders and banks offer resources and programs to assist first-time homebuyers entering the housing market.
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2. Working with a Realtor as a First-time Homebuyer
In order to explore all of your options, you may want to enlist the help of a real estate agent to help you find your first home. Buying a home can be stressful and frustrating; a real estate agent can ease some of the tension and anxiety you feel throughout the process. As long as you work with someone who will be dedicated to finding exactly what you’re looking for and something you’ll be able to afford, you’ll be able to enjoy your first home-buying experience.
If you decide to explore building a home, you’ll be able to work directly with the builder sales team to provide you with model home tours, guide you through your lot selection and help you through the entire purchase process – along with all the paperwork that is involved! When you build a Sifton home, once you sign your offer, you’ll work with our building and design team to help bring your dream home into reality!
3. New VS Used Homes
When buying a home for the first time, there are several options of housing styles and designs to choose from. One of the main decisions people need to make is whether they want to build a brand new house or find a well-loved older home.
Resale homes have a certain charm that many first-time home buyers are after. You may need to do a little digging to find exactly what you want, but with ample research and the right real estate agent, you’ll be able to find a home perfectly suited to you.
Related Post: Buying new house vs old house: Which Is More Expensive?
The other option is to build a brand new home. While this option may seem more costly initially, it can potentially save money in the long run. This is due to the ever-increasing use of energy-efficient building features used in many new developments. New homes are a great option for those who are interested in personalized, modern home designs in new neighbourhood communities.
First-Time Homebuyer Checklist
Purchasing your first home is a major milestone, and as a first-time homebuyer in Canada, the process can feel overwhelming. But with the right guidance, you can navigate it with confidence. This essential checklist will help you prepare for one of the biggest investments of your life.
1. Establish Your Budget
Before you start exploring properties, it’s crucial to understand what you can afford. Factor in not only your down payment but also ongoing costs such as property taxes, utilities, maintenance, and insurance.
Tip: Use an online mortgage calculator to estimate your monthly payments and ensure they fit your financial plan.
2. Get Pre-Approved for a Mortgage
Securing a mortgage pre-approval provides clarity on your borrowing capacity and shows sellers that you’re a serious first-time homebuyer. It also helps lock in a favourable interest rate.
Tip: Shop around for competitive mortgage rates and consider working with a mortgage broker to explore your options.
3. Research the Market
The Canadian real estate market varies significantly by region. Research neighbourhoods that align with your lifestyle and long-term goals, considering factors like work commutes, schools, and amenities.
Tip: Review recent sales data and market trends to make an informed decision.
4. Factor in Closing Costs
Beyond the purchase price, additional expenses such as land transfer taxes, legal fees, and home inspections can add up. Some provinces offer rebates for first-time buyers – be sure to check eligibility.
Tip: According to the Royal Bank of Canada you should budget approximately 3% of the home’s purchase price for closing costs.
5. Schedule a Home Inspection
A professional home inspection ensures your prospective home is in good condition. From structural integrity to plumbing and electrical systems, an inspection can help you avoid costly surprises.
Tip: Even if a home appears well-maintained, an inspection is a worthwhile investment.
Related: What Do Home Inspectors Look For? The Home Inspection Explained
6. Explore First-Time Home Buyer Incentives
Programs such as the First Home Savings Account (FHSA), the Home Buyers’ Plan (HBP), and tax rebates can help ease the financial burden of purchasing a home.
Tip: Speak with your mortgage provider to determine which programs you qualify for.
7. Consider Future Resale Value
While buying your first home is exciting, thinking ahead to its resale potential is important. Homes in desirable locations with strong community amenities tend to appreciate over time.
Tip: Choose a home with features that will appeal to future buyers, such as proximity to schools and public transit.
8. Think About Long-Term Needs
Your home should meet both your current and future needs. Whether you’re planning a family or considering aging-in-place features, think beyond the present.
Tip: Look for adaptable spaces, such as extra bedrooms or a finished basement, to accommodate future changes.
9. Plan for Ongoing Home Maintenance
Homeownership comes with responsibilities beyond mortgage payments. Regular maintenance and unexpected repairs are part of the journey.
Tip: Set up a maintenance fund to cover roofing, plumbing, and landscaping expenses.
10. Take Your Time with the Decision
Buying a home is a significant financial commitment. Take the time to evaluate properties, negotiate the best price, and ensure it’s the right fit for you.
Tip: Work with a trusted real estate professional who understands your needs and can guide you through the process.
Related: Accelerate Your Home Search in the Ontario Housing Market with Sifton
Ready to Find Your Perfect Home?
Purchasing your first home in Canada is an exciting and rewarding experience. By following these tips, you can make a well-informed decision and enjoy the journey with confidence. Whether you’re a young professional or a growing family, the right home is out there waiting for you.
Ready to make your first move? Explore a wide range of single and multi-family homes, townhomes, and condos located in vibrant, welcoming Sifton neighbourhoods.