Buying your first home is a huge and happy milestone, and one that you may have been looking forward to for a very long time. But, despite the excitement, the real estate market can be a difficult one to traverse, and first-time buyers may find themselves overwhelmed by the process. Buying your first home is largely dependent on your financial situation and, often, the first house you purchase will not be your ‘forever home’. A first home is often considered a ‘starter home’, one that will allow you to get your foot on the first rung of the housing ladder, so that you are able to start building equity. However, with that being said, you should be able to imagine yourself in your first home for at least five years to give the property time to appreciate in value. If you are looking to buy your first home, and aren’t sure of the procedure, then read on for some top tips compiled by our experts:
Know your finances
There’s a reason the term ‘house poor’ is one often heard today! Make sure this doesn’t apply to you. Knowing your finances means that you’ll be able to look for a home within budget and live within your means, without being stretched too thin. Bear in mind that you’ll need at least a 5% downpayment, though if you can save up more it will reduce your monthly mortgage costs, so you’ll need some savings under your belt. Also, don’t forget to keep some money back for closing costs, as they can be as much as 1.5 to 4% of the total purchase price. There are some that offer assistance to first-time homebuyers; such as the Home Buyers’ Plan (HBP) that allows a person to borrow up to $25,000 tax-free from their RRSP to fund a home purchase.
Get pre-approved for a mortgage
A mortgage pre-approval will let you know how much you can borrow and what your interest rate will be. You can also get an idea of how much your monthly mortgage payments might be. This allows you to assess your finances before you start house-hunting so that you don’t fall in love with something that is out of your budget. Being pre-approved for a mortgage also means you’ll be in a better position when you find a property you want to make an offer on.
Find a Realtor®
An experienced realtor will be able to help you navigate the unpredictable terrain of the housing market by using their wealth of knowledge to help you in your search. A good Realtor® will save you time and effort by sending you property listings that perfectly match your requirements, which will also take a huge weight off of your shoulders. Additionally, Realtors® often have insider information and may know of upcoming listings before they are officially on the market. In terms of pricing, a Realtor® will also be able to identify any overpriced listings and will advise you accordingly.
Look into new upcoming neighbourhoods
With house values continually rising, you may be priced out of certain neighbourhoods. It helps to keep an open mind and consider areas you might not have previously thought about. By choosing to move into a less ‘desirable’ neighbourhood, you may be able to snap up a larger home than you would in a more popular area.
Take your time and do your research
Spend time scoping out neighbourhoods to really get a feel for them to see if you would be comfortable living there. Look at new developments happening in certain areas – are there new grocery stores, cafes, or restaurants popping up that will increase the desirability of the area? Or perhaps there’s a new development in the works that would mean lots of traffic, construction, and disruption? The last thing you want is to move into your new home to be met with a nasty surprise because you weren’t aware of what was happening. Your Realtor® will be able to help you here as they will be familiar with any changes going on in the city.
If you are looking to purchase your first home and don’t know where to start, contact one of experienced RealtorsⓇ today. They will be happy to assist you with any question or concerns you may have about purchasing property in the Ottawa area.