Buying a first home is the single, most important decision most people will make in their lives, both emotionally and financially. Be prepared, do your research, surround yourself with knowledgeable, trustworthy professionals, and this can also be one of the most rewarding experiences ever!
While it may seem overwhelming, the #1 key to success is, simply, to start. Here is a blueprint that will make the process go smoothly and help you gather the information you need to make a sure and good decision.
Make Your Wish List
As a family, take some time to draw up a list of needs for each member. Keep this to the bare essentials. That is, minimum number of bedrooms, bathrooms, parking spaces, preferred school district, and so on. This will be the main focus of your search.
Next, add your wants. Perhaps you would like an extra bedroom to use as an office, or hardwood floors instead of carpets. These are items that you are willing to compromise on and will not affect the functionality of the property in relation to the needs of your family.
Personal situations sometimes change during the search period necessitating revisions to your Needs and Wants List. However, keep your basic needs in mind and this will keep you focused.
Know Your Purchase Ability
This very important step will be invaluable to you and your Real Estate Professional when you begin your home search. To start, create a balance sheet for the family by itemizing your assets (cash, investments, properties) and your liabilities (loans, credit card debts). Request a copy of your credit bureau report with the credit score. Gather employment letters, pay stubs and income statements to verify the family income. Decide how much of your own money you will use on a purchase, called the 'Downpayment”.
Once you have this information, it's time to visit your Mortgage Professional to see how much mortgage you will qualify for and to set the purchase price limit. If what you owe is greater than what you own, or if your credit score or your income is low, it may affect your ability to qualify for a mortgage but it is not impossible, as there are many different types of mortgage programs.
Finding a good Mortgage Professional is vital at this stage.
Start Your Research
The internet is an invaluable tool for research. Besides looking at houses, you will be able to find information on first-time homebuyer programs, keep track of and compare mortgage rates, find tips on house construction, neighbourhoods, schools and much, much more.
Beware of false information, however, by visiting official websites. I suggest you start here at the Canada Mortgage and Housing Corporation, the official site of the Government of Canada, http://www.cmhc.ca. Click on the Consumer link to gain access to tools, videos and tips.
Stay tuned for the next installments: Find the Right Professionals, Making the Offer, Useful Websites