How to Buy a Home as a First-Time Buyer
Taking the leap from renting to owning a home is a huge milestone, but it is also a challenging process.
The mere idea of buying a home for the first time can seem so daunting, that it can be tempting to settle for the first house that you find, or stick with renting.
Buying your first home is an exciting time, and your real estate experts at Homes by Jalaj Arora will help you every step of the way to ensure you feel comfortable and secure throughout the process.
To help you better understand the process, here are some handy tips to make life easier during and after your first home-buying process.
Think Before You Buy
Before you begin searching for homes, the first thing you need to do is determine what your long-term goals are and how owning a home fits in with those goals and plans.
- Do you feel like you are “wasting” money on rent payments?
- Do you want to own your own space and have the freedom to do what you please with your home?
- Do you want to take the next step in life by increasing your financial growth?
Narrowing down your big picture home ownership goals will help you better understand what you want or need from a house before you buy.
Step-by-Step Plan For First-Time Home Buyers
Now that you’ve decided to take the plunge into home ownership, it’s time you understand what the home-buying process will look like so you are prepared.
1. Research going rates of homes in your area
Without even going into what type of home you want, it’s best to do a general search of the starting prices of houses in your desired location.
You can search for current home listings with our online search tool here.
2. Understand your mortgage
It is best to go into the home hunt with a pre-approved mortgage, because this marks you as a serious buyer and will allow you to jump on a property you’re interested in without wasting time applying after the fact.
Use our Mortgage Calculator to get a better idea of what your monthly mortgage payments would be if you were to purchase your dream home today.
3. Associated closing costs
When purchasing a home, it’s important not to overlook all of the additional costs and fees associated with closing.
Besides accounting for the selling price of a home, initial deposit with the offer and down payment, also budget for:
- Land Transfer Tax, which is calculated based on purchase price (please refer to our mortgage calculator to get an idea on what amount to budget for land transfer tax)
- Mortgage Insurance Premium (CMHC premium), which is applicable if putting less than 20% down as down payment
- Fee for appraisal of the property
- Home inspection fee
- Lawyer fee, which includes Registration, Disbursements and Title Insurance
- Adjustments that are calculated by the lawyers on closing, e.g. overpaid property taxes by seller, utility bills (heat, hydro), etc
- Monthly condo fee if the property is not a freehold home
- Home insurance
- Movers expense
4. Consider new up-and-coming neighbourhoods
Millennials represent 77% of first-time homebuyers and for many, living in a big city like Toronto seems ideal for work and play.
But it’s actually more beneficial in the long term to choose to live just outside the city, especially if you wish to grow your family as you will get more property for the same amount of money.
Cities like Milton, Oakville, and Burlington are prime examples of living within optimum distance to city life while still maintaining a slow and quiet pace.
Learn all about Milton and what makes it the perfect place to live, work, and play here.
5. Look at the bigger picture
House hunting is a long and hard process, and it can be easy to get overwhelmed and all-consumed in the stress of it all.
But it’s important to look at the bigger picture, remember why you want to be a home owner, and remind yourself of all the positives that will come once the home-buying process is over.
Think of it this way: It may be a few weeks of house hunting, paperwork, stress, and more hunting and more paperwork, but you will be left with the lifetime enjoyment of a home and investment for you and your family to grow with.
What to do after you buy your home
Once you’ve closed on a home and have the keys in your hand, it’s important to take proper steps to remain secure as a new homeowner.
- Keep saving – Owning a home comes with regular maintenance and sometimes unexpected expenses. Starting an emergency fund is essential to being a homeowner.
- Take care of your home – Perform regular routine maintenance on your home to ensure you are properly taking care of your investment.
Need more information?
Becoming a first-time home owner is a big milestone, and we’re honoured you’re considering choosing Homes by Jalaj Arora.
Remember, the more you educate yourself about the process, the less stressful it will be.
If you have more questions regarding the home buying process, get in contact with us. We’re always happy to help!