Buying your first home is one of the most exciting, and stressful times in your life. This is probably the largest purchase you have ever made! Here are 5 of the most important tips for first time home buyers.
Stay Within Your Budget
A mistake that a lot of homebuyers make is finding out the maximum amount of money that they will be approved for, and spending all of it. Just because a lender would be willing to loan you a certain amount of money, does not mean you should borrow that much.
Sit down and make your own monthly budget, and figure out how much money you would be comfortable spending on a mortgage each month. How much you are willing to put towards a mortgage will depend not only on your income, but also where your money goes each month.
If a considerable amount of your paycheque goes to entertainment and dining out each month, you should consider that while doing your budget. The last thing you would want is to be able to afford your mortgage payments but not the things you enjoy doing!
Save Up a Large Down Payment
Save, save, save! The larger your down payment, the less money you’ll need to borrow. By borrowing less money, you’ll ultimately be spending less on interest payments over the life of your loan. When it takes 20 years to pay off a mortgage, paying a little less interest each month really adds up.
Plus More for Closing Costs
When you’ve got what you deem to be a reasonable down payment saved up, don’t forget about the closing costs! As a Squamish Mortgage Broker, I’ve seen many homebuyers forget that they will need to be able to pay closing costs on the home.
Closing costs could be up to 4% of the home’s purchase price – no small sum! This includes fees for land transfer taxes, lawyer charges, and inspection fees.
Get an Inspection
One of the most beneficial things you can do when purchasing a home is to get a home inspection. Even the most beautiful looking home could have serious issues that cannot be detected by the naked eye. Hiring an inspector to check for things that the average person would not be able to notice (mold, flood damage, etc.) will save you from so much headache and expenses in the future.
Work with a Mortgage Broker
While the most exciting part of becoming is a home owner, you’re also going to need a mortgage to pay for that home. Getting a mortgage can be a daunting and stressful task, which is why it is always recommended that you work with a mortgage broker. A mortgage broker works with many lenders, so they know who has the best rates, and best mortgage products. They will review your unique situation, and match you up to a suitable lender. A mortgage broker does all the work for you, and you don’t even need to pay them! They get paid by the lender once your mortgage is approved.
May 16, 2018