By Todd Lewys
First-time home buyers find themselves in a unique situation.
On the one hand, it’s only natural to be excited about the prospect of buying your first home.
At the same time, the enormity of the task can be overwhelming. There’s just so much to think about, with so many things coming at you at once.
Here are some tips to help you not just buy a home, but the home that best fits your needs.
• Get organized. This means getting a vision for the type of home you want well before you start looking for it. Think about the size and style of the home, and the area you want to live in.
• Get educated. Do some preliminary work to familiarize yourself with the home buying process — there are lots of online resources that can help you get started, including step-by-step home buying tips on winnipegrealestatenews.com
• Don’t make any big-ticket purchases prior to buying. Hopefully, your preliminary research — this would be done six months to a year before entering into the buying process — will alert you to the fact that you shouldn’t take out a big loan to buy a new car or a loan for a new trailer for the lake prior to applying for a mortgage. You want to be as debt-free as possible when you make the move to buy your first home.
• Put a real estate professional and mortgage broker on your team. Seeing as this is the largest single purchase (to date) that you’ll make in your lifetime, prepare for it like you mean business. Enlist a reputable REALTOR® who will educate you about the home buying process. Then, seek out a mortgage broker — they typically work harder for you than a bank — who will educate you further about the process and guide you through the myriad details step by step.
• Now, you’re ready to start. Having taken the time to do your due diligence, i.e., getting a handle on the complicated buying process, you’re ready to get pre-qualified for a mortgage.
• Prepare for a reality check. Even if you haven’t taken out a big loan and have your financial house in order, chances are good that the mortgage amount you get approved for will be lower than you anticipated — the federal government’s stress test will likely see to that.
• Be realistic. If your mortgage broker recommends a certain budget, strive to stay at or below it. Doing this will ensure your finances won’t be stretched to the breaking point down the line; it’s no fun to be house poor. If necessary, buy a home in a less trendy neighbourhood to ensure you don’t stretch your budget too far.
• Create a budget for expected, unexpected and miscellaneous expenses. In short, make sure you have $2,000 to $5,000 in reserve — and this means after paying closing costs, legal fees and other costs that crop up. It’s guaranteed there will be unexpected expenses, whether they’re extra fees or the need to buy a new $2,000 fridge a month or two after buying the home. It’s better to have money left over rather than face a financial deficit after all the dust has settled.
• There will be tribulation. As many first-time buyers have found out, the first year or two of home ownership can yield many unexpected surprises, most of them financial. Owning a home is costly, even more-so if you buy an older home. Repairs and upgrades will be required, so try to have money on hand to cover those expenses without going into debt.
• Enjoy! Embrace home ownership. You now have your own little piece of the world and are building equity. All is good.
In a nutshell, there are two fundamentals that will help you find the home that’s right for you: preparation and anticipation.
Get educated and — most importantly — enlist the services of a reputable REALTOR® and experienced mortgage broker. And anticipate the unexpected.
Doing that will ensure that you just don’t buy a home, but you’ll find the home that will meet your needs starting out.