Tips for Buying Your First Home
Moving can be very exciting but it can also be very stressful as there are so many things to remember to do! Don’t despair; whether you are doing it on your own, asking friends for some help, or hiring professionals, here is a quick guide to help you get through the buying process.
Avoid 9 critical mistakes that could cost you thousands of dollars when buying your home!
- Don't "low-ball" your initial offer
Vendors tend to give less of a counter offer (closer to list price), if they feel insulted. Understand the current market value of the home and comparable SOLDS.
- Get Pre-approved
A pre-approved mortgage can be done for 90 days for FREE. You can usually negotiate your mortgage rate between 1/2-1% off the posted rates with your lender.
- Have your agent arrange a home inspection
A home inspection with a qualified engineer costs about $300.00 (approx). It could very well be your best money spent. You want to know exactly what you are bidding on.
- Avoid buying the most expensive home on the street
The most advantageous situation is to purchase the worst home in a good area, rather than the best house in the worst area. "Location, Location, Location" is true!
- Prepare a down payment of at least 25%.
When you have a down payment that is almost 25%, it is usually less expensive to arrange a first and second mortgage and save on CMHC insurance fees.
- Arrange an accelerated Bi-weekly payment plan on your mortgage.
On your mortgage, you will save the most money if you opt for an accelerated Bi-weekly payment plan, or if you double up one payment per year. This will shorten your amortization periods by over 6 years!
- Take advantage of tax credits.
Place up to $20,000.00 per person of your down payment in a short term RRSP to be held for at least 90 days, or until closing.
- Try and stretch to the maximum you can afford.
- Be sure to check into your lawyer’s fees ahead of time.
These are separate from disbursements. Ask your agent, who will be able to refer you to reliable professionals.