There is a lot of things to take into consider when purchasing a home regardless if you are a first time home buyer or not. The below information are some tips to take into consideration:
1. NOT BEING APPROVED FOR A MORTGAGE BEFORE YOU START VIEWING HOMES
It is strongly recommended that you get a commitment from a lender to ensure your financing doesn't fall through. Although the online mortgage tools and bank pre-approvals are helpful, the commitment letter is more useful especially if you are in multiple offers and you want to remove this condition in your offer. They will check your credit, verify your down payment and employment – so have these documents ready.
2. VIEWING HOMES YOU CAN'T AFFORD BECAUSE YOU ARE NOT FLEXIBLE IN YOUR CHOICES
There are many homes in the market and it is wise to be flexible about where you want to live within your budget. If you view homes out of your price range, it will be very disappointing and you may miss your opportunity on a home that was within your price range.
3. LOSING SIGHT OF YOUR WANTS VS. YOUR NEEDS
Lets face it, it's easy to fall in love with a home because of the way it is staged vs. the home itself; basically, it is so easy to get side-tracked with the nice furniture and decor. If a gorgeous bedroom without a master bathroom ensuite wasn’t on your initial needs list, don’t fall for the bedding and pillows and forget that what you really need is that ensuite. Your wants and needs can change during the home search process, just don't lose sight of your needs.
4. NOT GETTING A HOME INSPECTION
Getting a home inspection from a qualified and certified inspector will help you detect something in the home. This inspection can either make or break a deal, for example, if you find out that the home has knob and tube wiring, you may not decide to take it due to the cost of replacing electrical. A home inspection helps locate issues and can be an indicator for what might go wrong in the future. Don’t skip this important step and make sure to read the report when it is completed. If there is something you don't understand ask the inspector to clarify it. If you are unsure on the mechanisms of a home, bring someone who knows and that you trust to the inspection with you. Even if you are going into multiple offers on a specific date, you can always arrange an inspection before the date so you can be more confident to remove this condition in your offer or know what potential problems can be in the home. Also, you might want to think twice about accepting a pre-inspection from the seller as the report may not be as detailed as you think.
5. NOT HAVING EXTRA MONEY FOR CLOSING COSTS
Yes there are closing costs involved when buying a home and it is strongly recommended to have at least 2% (of the sale of the home) for closing costs. As a buyer, you will need to pay the land transfer tax, lawyer fees, adjustments, HST on any services, home inspection, etc. If you are purchasing a home in Toronto, you will need to pay the Provincial and Municipal Land Transfer Tax. As a first time home buyer, you may qualify for a rebate so speak to your lawyer about this. If you’re a non-resident non-Canadian citizen, you will be subject to paying the Non-Resident Speculation Tax, paid on closing.
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