1. Get a Handle on the Process
What does the home buying process look like, exactly? With so many moving parts involved in any real estate transaction, we recommend learning more about the steps you’ll need to take ahead of time. Of course, your Edmonton REALTOR® will walk you through it all, but even the smallest amount of research will help reduce first-time buyer overwhelm.
2. Consider Your Credit
Your credit score is the first thing mortgage lenders will consider during the mortgage approval process. To avoid any surprises (and to secure a better interest rate), be sure to check your credit report beforehand. Keep in mind, once you have been pre-approved, it’s imperative you don’t make any changes to your credit (i.e. getting a new credit card, applying for a loan, etc.) until after you close on your home.
3. Take Advantage of First-Time Buyer Incentives
As a first-time home buyer, saving your down payment can be more than a little challenging. The good news is, you may eligible to receive down payment help through any of the following first-time buyer programs:
For more information, see our previous post: Struggling to Save for a Down Payment? These First-Time Buyer Programs Can Help
4. Work With a Mortgage Broker
Instead of signing on the dotted line with your bank, we recommend working with a mortgage broker, first. In short, they will do the legwork for you when it comes to shopping around and negotiating with lenders, their mortgage products and mortgage rates. Best of all, they can help you get a mortgage (and save a ton of money) at little to no cost to you.
5. Get Pre-Approved
For first-time buyers, there’s nothing worse than falling in love with a home only to discover you can’t afford it. For this reason, you’ll want to get pre-approved before you head out in search of your new home. Not only will a mortgage pre-approval help you determine what you can afford (keeping you on budget and preventing potential disappointment), but it will give you more clout when you’re ready to make an offer on a home.
6. Separate Your Wants and Needs
Simply put, your new home “wants” are things that would be nice to have but can live without. Your new home “needs,” on the other hand, are (you guessed it) absolute must-haves. While there is no one-size-fits-all approach, we recommend jotting down your new home essentials (i.e. number of bedrooms, bathrooms, proximity to work, etc.) and working your way backwards. Ultimately, this will give both you and your Edmonton REALTOR® a starting point for your new home search while ensuring your most important criteria are met.
7. Factor in Additional Costs
There’s a lot more to purchasing a home than simply coming up with your down payment and taking on a monthly mortgage. There are additional costs, such as closing costs, home inspection costs (more on that below), moving costs and property taxes that you’ll need to be prepared for before your closing date.
8. Don’t Spend It All
Speaking of additional costs, there are regular long-term expenses associated with home ownership that should be factored into your overall home buying budget (beyond your monthly mortgage payment). Items such as upgrades, repairs, and general maintenance should all be taken into account. As such, we recommend spending less than your overall mortgage pre-approval amount so you can comfortably afford the home you want (and any changes you want to make) without the worry of becoming house-poor.
9. It’s About More Than Just the Numbers
While we understand you’ve scrimped and saved to come up with enough to afford your first home, remember, it’s about more than just the numbers. While your first home is an investment, it is a long-term investment. Because real estate appreciates over time, you’ll want to think about your overall happiness (for the next five or ten years) rather than focusing on the initial purchase price alone.
10. Community is Key
Even if you love the home, you may find yourself unhappy if the surrounding neighbourhood leaves something to be desired. As you search, take the time to dig a little deeper into local demographics such as crime rates, nearby shopping and services, schools, parks and accessibility. We also recommend adding any community “must-haves” to your lists of wants and needs, as this will help your REALTOR® zero in on the right area for your unique lifestyle.
Check out our post: Buying Your First Home: How to Choose the Right Edmonton Community
11. Hire a Home Inspector
As we mentioned above, a home inspection is an additional cost you need to prepare for, above and beyond the home’s purchase price – but it’s well worth it. During this process, the inspector will identify any existing or potential defects in and around the property. In short, an inspection will help you make a more informed decision as to whether or not you want to purchase the home and/or give your REALTOR® better bargaining power during negotiations.
12. Work With a REALTOR®
Purchasing a home can be challenging even for the most experienced home buyer, but it can be downright intimidating for first timers. That’s why we recommend partnering with an experienced Edmonton REALTOR®. Not only will they help you find the perfect home, but they’ll also:
- Provide endless guidance, support and advice.
- Help you avoid potential (costly) mistakes.
- Negotiate with home sellers and their agents.
- Connect you with other professionals in the industry, such as mortgage brokers, home inspectors, lawyers, etc.
- Save you time and money.
Are you ready to buy your first home? We can help! Download your free copy of our Step-by-Step Guide For Buying Your First Home. We’ll tell you everything you need to know about:
- Figuring Out How Much You Can Afford
- Coming Up With Your Down Payment
- Getting a Mortgage Pre-Approval
- Determining Your Wants vs. Needs
- House Hunting Tips
- And much more!