One of the most important steps to buying a house is evaluating your current financial situation and understanding how much mortgage can you really afford.
Here are some key points for you to consider:
What monthly payments can I afford? (i.e. mortgage, property taxes, utility bills)
How much can I afford for my down payment?
Do I have money to cover the closing costs?
How stable is my current job?
Will my needs change in the next 24 months? (i.e. family enlargement, job change)
2: Get Mortgage Pre-Approval
It is important that you get pre-approved for your mortgage. In order to do so you just need to provide some financial information to your mortgage broker, such as your income, amount of savings and details on any investments you may have.
3: Must Have vs. Nice to Hav
Next, decide which features of your new home are really necessary and which are only nice to have. This will allow you to stay focused and look specifically for the type of houses that meet your criteria. When deciding on the particular area it might be also useful to think about access to highways, schools, shopping centers, restaurants, parks and public transportation.
4: Choose a Real Estate Agent
Once you have determined that you are ready to buy a property, you will want to choose a real estate agent to work with. In recent years there has been an ongoing debate whether to hire a real estate agent or to look for a house on your own. There is certainly an increasing number of properties sold directly by owners and it seems like you can find your dream house yourself on the Internet. It is however essential to have a partner who will guide you through the whole process and provide you with valuable information on homes and neighborhoods. Real estate agents have access to broker’s version of realtor.ca which gives them immediate updates and contains much more detailed information. This allows them to support you with finding the right house for you and your family given your requirements and the budget you have established. In order to find the right partner, it is best to create a short list of agents you’re interested in and simply call them to have a brief conversation. If you enjoy the contact, then arrange to meet them in person to determine if they are the right fit. It is important to remember that your real estate agent should be able to assist you with other necessary real estate services such as arranging a house inspection, recommending a mortgage broker or finding a real estate lawyer.
5: Explore your options
Looking for this perfect house is not an easy process. It is quite challenging and it may take time before you get across a home that truly meets your needs and expectations. During this entire process it is important to put your emotions aside and build up your patience. Work closely with your Real Estate Agent to book viewings of only the houses that you really like and that meet the criteria you have determined in the beginning of your process. At all times remember to stay objective. It is easy to fall in love with the house appearance but miss out on other important factors like general condition of the house. Always remember that appearance can be deceiving!
6: Make an Offer
Once your mortgage pre-approval is in place and you have found that beautiful home you have been looking for, make an offer.
Here are some key points for you to consider:
Price: does not need to be the same as the Seller’s asking price. Make sure you discuss the details with your real estate agent and offer what you are most comfortable paying for the particular house of your interest.
Deposit: shows your good faith and will be applied against the purchase of the home when sale closes. Deposits should be at least 5% of the home’s purchase price.
Conditions: always good to consider; standard conditions can include: subject to home inspection, subject to you obtaining financing, or subject to you selling your existing property.
Inclusions/Exclusions: your offer may be contingent on including certain items in the sale such as appliances, fixtures and decorative items.
Closing Data: Seller will often specify the date or date range they would like to close on the property and your offer should closely match this. The closing date is the day the title of the property is legally transferred to you and the funds go to the Seller.
7: Apply for Mortgage
Lenders have a wide range of competitively priced loan programs. It is always good to explore your options with different financing institutions. Every home buyer has their own priorities when choosing a mortgage. Some are interested in keeping their monthly payments as low as possible. Others are interested in making sure their monthly payments never increase. It is important that you consider what your priorities are and openly discuss it with your mortgage broker.
8: Closing to Obtain the Keys
At Closing, you will sign all of the paperwork required to complete the purchase, including your loan documents.
9: Move in!
Now that you’re the proud owner of your new house, it’s time to move in. Moving is not an easy process but it could be substantially easier if you plan in advance. Once you get settled into your new house it is often suggested to change the locks.
