5 Steps To Buying Your First Home
September 22, 2015
Purchasing your first home can feel like a complex process and it is crucial for people who want to make a smart wealth-building decision to buy the right property that suits their long-term needs.
To prepare yourself for this life-altering event, follow these 5 steps to buying your first home.
1) Eliminate your debt and save as much money as you can.
No one wants to be house poor or to have all of their income directed at debt repayment. The best thing you can do before buying your first home is to clear old debt such as student loans, car loans and credit card debt.
Some individuals don’t wait to have a fully funded savings account in place when they buy their first home, which might lead to tough times if they experience unexpected expenses or a job loss.
Once you have eliminated your debt you can focus on saving money. You want to save money for your down payment, closing costs, house repairs and you want to have another savings account for a rainy day.
2) Establish a healthy down payment.
This ties back to number one, but the more money you save in beginning will save you a lot in the long run.
You are required to put down 5% of the cost of the home, but it would be a great if you could provide a down payment of at least 10%.
As mentioned, you can still find mortgages that require much smaller down payments (5%) but be warned if you can’t afford a decent down payment it might be a sign that you cannot afford a home.
3) Get Preapproved for a mortgage
If you are serious about buying a home, it would be wise to get your financing in order – get pre-approved. The preapproval process can be extensive and it needs to occur before the real home shopping process can begin.
It is a solid plan to get pre-approved before you begin shopping for your home so you can keep your expectations in check.
4) Do not become emotionally attached to a home
It’s imperative that you stay savvy throughout the process of buying your first home. It can be easy to blow off a budget and let your emotions get the best of you. You might fall in love with a home or a specific neighbourhood but stick to your budget and before you know it, the right home will present itself.
5) Take Your Time
Purchasing your first home is one of, if not, the biggest purchases you will make in your lifetime! Study the market and take your time with your purchase. The worst thing that can happen after you purchase your home is experiencing buyer’s remorse. We don’t want to state the obvious, but once you’ve bought your house you can not return it within 14 days. All sales are final!
If you have completed the steps above and you are ready to buy your first home we would love to help you find your dream home that fits your budget. We have several homes that fit a wide a variety of needs and families.
If you are not ready to buy a home we would love to stay in touch and continue to provide you with information about how you can, one day, own a home. Feel free to connect with us!