Buying your first home can be a daunting process if you don't have all the information before you begin. It is probably the biggest purchase and most important decision you will make. Knowing how the process works, what costs are involved and what to expect will help make the process of buying your first home easier and stress free. We have outlined some of the most important things to know before you being the process.
· Determine the location and the type of home that suits your needs- Most people have a general idea of where they want to purchase their new home based on largely on familiarity and convenience. For example, living close to work or schools might be a priority, or an area with parks and amenities. This is also a good time to think about how much you want to spend and what you can afford, but do not start looking yet, get your pre-approval.
· Apply for a mortgage pre-approval with a mortgage professional- Contact one of our listed mortgage professionals to start the process of your mortgage pre-approval. They will evaluate your current situation and find the best possible mortgage to suit your needs.
· Get all your finances in order- After you get pre-approved it's a good time to make sure you have the finances to cover your down payment and disbursements on your purchase. After you get the pre-approval and know how much you can borrow, having the down payment is essential. Your down payment will be based off the amount you intend to borrow and must come from personal savings or a gift. You cannot borrow this amount.
· Start your new home search- Most home buyers will hire a realtor to help them through the home buying process. It is important to only look at homes within your budget to avoid disappointment. However, you may be able to persuade some motivated sellers to lower their list price.
· Hire professional services such as a realtor, lawyer and a qualified Canadian home appraiser- You have chosen the perfect property, now you should hire a lawyer and a qualified home inspector. These expenses should have been included in your budget when you prepared all your finances. Not sure where to find these services? Ask your realtor. Or check out our "Find a Professional" Page.
· Arrange for a home inspection- It is highly recommended that you get the property inspected prior to making an offer. You want to make sure that the home is everything the seller made it out to be. It is important to make an informed decision on the investment that will mean so much to your future. If there is pressure from other buyers, you can always make a conditional offer while conducting the home inspection to secure your interest.
· Make an offer- After the home inspection is complete and you are satisfied with property, you can make an offer. This can be done by presenting the seller with an offer to purchase (which your realtor can write up for you). You will also pay the seller a deposit at this time.
Costs Associated with Closing a Home
Appraisal Fee: This is the cost for a professional to come to your property and assess its value. Your mortgage lender or mortgage default insurer may require an appraisal to determine whether the selling price is reasonable for that market.
Home inspection fee: This covers the cost of a professional home inspection. Hiring an inspector is voluntary but highly recommended for resale of homes.
Legal costs: This includes fees charged by your lawyer or notary for services such as conducting a title search, drafting a title deed and preparing the mortgage and registration fees.
Moving Expenses.: Cost will vary depending on whether you do the move yourself or hire a professional moving company.
Prepaid taxes, utilities, and other charges: Any previous owner may have prepaid some bills before the closing date, which you will have to reimburse them for. Some utility companies charge a deposit, or fees for name changes and hook ups. Taxes and other charges are now your responsibility.