Is this year going to be the year you purchase your first home?
Being a first-time homebuyer is incredibly exciting, but it can also be extremely stressful. For most people, buying a house is going to be the biggest purchase of their lifetime. Your mortgage is also likely to be the largest debt you’ll ever take on. With so much riding on making good home-buying decisions, preparation and planning are key.
Here we take a look at five proven tips that increase the likelihood you’ll end up with the right property for your circumstances.
Organize Your Finances
Making sure you have sufficient money to service your mortgage, as well as enough to make a significant down payment, are both vital to successful homeownership. To make sure your finances are in good shape when you’re getting ready to buy a house in Ajax, or elsewhere, we recommend the following:
Budget for Ongoing Ownership Costs
As well as getting used to budgeting enough to meet mortgage repayments, it’s also important to realize that homeownership comes with a number of additional costs relating to insurance and upkeep.
Build these costs into your budgeting spreadsheet and make sure you can afford them as well as your planned mortgage repayments.
Save for the Biggest Down Payment You Can
The down payment is the amount of money that you pay upfront for your home. Most homebuyers usually purchase a property using a combination of a down payment and a mortgage (to cover the balance of the purchase price). For most first-time mortgages, a minimum down payment of 5% is required.
A larger down payment not only means you’ll have to borrow less but it can also:
- increase the value of the property you can purchase.
- make it easier to obtain a mortgage.
- enable you to take advantage of low-interest mortgages.
- may mean that a seller is more likely to accept your offer.
Get a Mortgage Pre-Approval
A mortgage pre-approval is a written indication from a mortgage lender that tells you how much you’re likely to be eligible to borrow. It’s not a guarantee that you’ll get a mortgage, but if you’ve gone through the mortgage pre-approval process, any significant barriers to mortgage approval (such as a poor credit rating or pre-existing debt) will usually be picked up during the pre-approval process.
A pre-approval ensures you’re clear about how much you can afford to pay for a property. It can also provide reassurance to sellers that you’re already likely to be able to get the necessary finance to purchase the property. Although not a definite guarantee of a mortgage, a pre-approval often puts you in a more favourable purchasing position than a buyer without pre-approval.
Determine Your Needs & Wants
The Needs & Wants list is an important tool to narrow down your property choices. It reduces the risk of ending up with a property that doesn’t meet all your essential requirements and introduces objectivity into the homebuying process.
Under the “Needs” column of your list, detail the features or traits that you absolutely must-have. These may include being in the right location, being in a good state of repair (unless you want to take on a rebuild project), or having the right number of bedrooms or suitable car parking facilities.
“Wants” are features that you would like, but that you can live without. They frequently include aesthetic features or proximity to leisure attractions.
A Needs & Wants list not only helps you to focus on what you want in a property, but it also enables your real estate agent to understand exactly what you’re looking for. This can speed up the purchasing process, as your agent will then make sure they only bring properties to your attention that are good contenders.
Buying a house can be a frustrating and drawn-out process. Although it can be tempting to plump for a property that’s less-than-ideal, simply because it means you’ll finally be on the property ladder, there is some truth in the old proverb, “Act in haste, repent at leisure.”
Take your time, make sure that the properties you consider tick all the boxes on your “Needs” list and in due course the right property should come up.
Pick an Experienced, Local Real Estate Agent
A local real estate agent will have a good knowledge of the local area. This means they can advise on everything from crime rates to the proximity of local facilities such as schools. They’ll also be able to advise on the areas where property values are rising and those that are less likely to appreciate in value.
Ideally, your estate agent should also have considerable experience in helping first-time buyers end up with a suitable property.
Before picking a real estate agent, it’s worth talking to a few to get an idea of the type of market they serve and what they can offer. Given the key role your agent will play in finding a suitable property for you, it’s important that whoever you pick has local expertise and is someone you can trust to identify properties that meet your needs and are within your budget.
Looking to Buy Your First Home in Ajax?
Once you’ve identified your preferred property, having access to the right expertise can make a big difference to the purchasing process. The job of your team is to optimize the chances of you ending up with a high-grade property for a fair price. Unfortunately, there are numerous problems that purchasers can run into – from surveys throwing up structural problems, to boundary disputes, problems with a proposed contract and more.
With so many potential pitfalls, it’s important to find a team you can trust to have your back!
Team Bansal is an established real estate team that operates from the town of Ajax and proudly services the surrounding areas of Pickering, Whitby and Oshawa. The Bansal team has years of experience in working with first-time homebuyers, providing advice that you need to make the right decisions about that all-important first home purchase.
Get in touch with Team Bansal to find out more about the services they provide to local first-time homebuyers.