Purchasing your first home is exciting especially if you prepare properly.
Making the jump from renting to owning is a big deal. Not only is owning your home a great investment, it also comes with a sense of personal pride. With housing prices at a premium, it’s important to make sure that you’re not only ready to own, but can afford the costs associated with owning a home.
Are you ready to take the plunge into home ownership but don’t know where to start? Go to your bank and get approved for a mortgage — and start looking for a good realtor who knows their stuff.
SPEND AND SAVE WISELY
The housing market is tough — and getting your foot in the door can feel impossible. You don’t necessarily need to do it alone. Look into both federal and provincial programs that support first-time buyers. You may be able to offset closing costs, some of your down payment, land transfer fees, and more. As a first-time buyer, you may be able to take advantage of the CMHC First-Time Home Buyer Incentive coming later this year as well. Do your research and find a good realtor who can help walk you through this process.
The market may still be hot in some of the big cities. But with the rebates available to you as a first-time homeowner, there’s not much of an excuse to skip on the home inspection. Why do you need one? You wouldn’t buy a used car without a test drive, would you? Doing a walk-through with a home inspector can help you take a closer look at the state of the home. They can answer your questions and point out some deficiencies that a first-time buyer might not know to look for.
To me, it’s some of the smartest money you can spend on a home. With the right inspector, you can get a good idea of what condition the home is in. Does the roof look like it’s in need of replacing in a few years? What about the windows? These aren’t cheap repairs, and you want to know if you’ll need to set aside money for that in the near future.
If you’ve been renting for a while, you’ll know that your mortgage isn’t the only payment you’ll be making every month. You want to have an idea of how much it costs to run the home. Ask for copies of some recent energy bills.
DON’T BITE OFF MORE THAN YOU CAN CHEW
Listen, I’m not going to pretend renovations are cheap. Because often, when they’re done right, they’re not. That said, just because you have a tool box and a YouTube tutorial, doesn’t mean you’re capable of handling your own projects to save a few bucks. Even the most handy people have their limits.
Personally, I don’t like to touch my own electrical, and it’s something that I leave to the pros. While there are some jobs you may be capable of doing, don’t over extend yourself.
Know where your limits are and spend the money to bring an expert in where needed. If you have to redo your own shoddy work, it will probably cost you more in the long run. Projects that are more cosmetic, like painting, are a good place to test your DIY skills, because if you do slip up, you’ll only have to live with some cosmetic deficiencies. To me, that’s not the end of the world.
Which brings me to my next point. Just because you’re approved for a mortgage doesn’t mean you need to look only at houses in that price range. It might be a smarter idea to look for something at a lower price point, and save that extra cash you’d be putting toward your payments each month into an account dedicated to repairs, maintenance, and renovations down the line. This is especially important if you buy a fixer upper. If you’re saving to make some energy-efficient upgrades, there are often rebates available for those too.
Buying your first home should be an exciting process, and I’m not here to take away from that. I just want to make sure you’re able to afford your home BEFORE you have to call me in to come fix an issue you didn’t account for. Happy house hunting.
Prepared by: Mike Holmes
Source: National Post